FAQ's
AREN'T THERE SOME CONCERNS THAT HAVE BEEN RAISED ABOUT RENO/TAHOE HOSTING AN OLYMPIC GAMES?
For years and into the future, many may argue that hosting an Olympic Games is a less than desirable proposition. The arguments, while consistent and in most cases sincere and well meaning, are generally based on any or all of the following concerns:
- The Games are too expensive and will leave the area/region/state/country in debt for many years.
- The Games will divert revenues from more worthwhile community needs.
- The Games will create significant disruption to our normal community life for a long time before the Games and particularly during the Games.
- The hosting of the Games will jeopardize our environment
- The hosting of an Olympic Games will displace our normal visitors and we will never make up any of these losses
- The hosting of an Olympics will leave a lot of “white elephant” facilities
All are legitimate issues that will need to be addressed continually throughout the bid process in the each of the planning, preparation and hosting periods. A close examination of each of these concerns reveals that they may, in fact, be unfounded or exaggerated.
The Games are too expensive and will leave the area/region/state/country in debt for many years.
It is true that the Games are expensive – the estimated cost in today's dollars to host an Olympic Winter Games ranges between $1.0 billion and $1.5 billion, depending on the level of permanent and temporary construction required. This is a large sum of money but the current revenue streams available to Olympic Winter Games' organizing committees is enough to cover this range of costs and, if expenses are properly managed, to achieve a small surplus. For 2002, Salt Lake City has reported a surplus of approximately $100 million on a budget of around $1.5 billion.
It is important to note that, while the vast majority of Games economic benefits accrue to the host city, 80% or more of Games-related revenues come from sources outside of the host community. These “outside” revenues include the local organizing committees' share of U.S. television revenue (estimated at $400-500 million in 2014), worldwide television revenue (an additional $300 million plus), international sponsorship revenue, non-local ticket revenue and merchandising and licensing revenue.
All of those revenue line items are virtually guaranteed. The opportunity to generate this much outside revenue is a relatively recent phenomenon in the Olympic Movement and has resulted in a totally new Games economic model. This model is expected to continue.
The Games will divert revenues from more worthwhile community needs.
The above argument is often extended to suggest: ‘while Games-related revenues may cover certain Games-related expenses, there are extended public and societal expense areas which are not covered by the revenue streams noted'. These include infrastructure improvements associated with or “blamed” on the games, transportation improvements, higher security necessities and other costs.
It is true that there are costs in all of these areas but it is also true that: (1) they primarily represent an acceleration of infrastructure and transportation-related spending that would have been spent anyway – and such spending traditionally generates many new and well paying jobs. It is also true that: (2) in recent years, most if not all of any increased security costs, have been borne by national and regional governments rather than local governments.
It has been difficult to locate significant areas where any spending has been diverted from existing essential areas to Olympic-related projects. It is possible, however, to identify increased spending in some societal areas that has been re-allocated to the host city of the Games due to the presence of the Games.
The Games will create significant disruption to our normal community life for a long time before the Games and particularly during the Games.
It is true that there may need to be short-term traffic control periods for the Games' competition windows, but the high level of related transportation planning experience that has evolved, allows these interim re-directions to be minimized. It is also true that area residents will retain their rights to travel on key roads while traffic may be restricted for non-residents.
In the period immediately prior to an Olympics, there may be road, waste management and other infrastructure improvements, including airport and rail expansions that will require normal construction-related inconveniences. As these are not unlike other non-Games upgrade projects and the net result will be improved infrastructure for many years into the future, these appear to be on balance, beneficial to the community.
The hosting of the Games will jeopardize our environment
To the extent that any carefully overseen and well planned construction project may impact an existing environment, there is the potential for environmental impact – at least in some small part, this may be true for any long term infrastructure project – most if not all of which would occur anyway. It should be noted that areas under the control of the Olympic Games organizing committee such as tree removal for venues and venue improvement, impacts on water quality, run off, recycling and the use of recycled supplies etc., the IOC has mandated that “the environment” be the “4 th Pillar” of the Olympics in terms of Games-related constituencies. No community will be awarded the Games unless they present an excellent plan for preserving and protecting the environment. The IOC has also shown that it will maintain this concern and priority after the award of the Games bid.
The Reno/Tahoe area is blessed with a beautiful environment and many residents value this aspect of the local lifestyle above all else. They and their representatives will be included in the overall development of the Games plan. The 1994 Games in Lillehammer, Norway demonstrated that “green” concerns and an excellent Olympic Games can be compatible.
The hosting of an Olympic Games will displace our normal visitors and we will never make up any of these losses.
It is true that there is some diversion and displacement of normal tourist and business visitation, usually due to convention center and other venues retrofitting to prepare for Games use. For several months prior to an Olympic Games, and during the Games themselves, there are some elements of any tourist economy that may not reap the maximum benefits that other industries may reap during the Games. This is unavoidable, but the high revenue levels for some hospitality categories help to balance the affects in the aggregate.
It has been demonstrated, particularly in the Salt Lake City/Park City area for 2003, that advance bookings and revenues are up by 25-30% over comparable 2001 levels. This strongly indicates that the legacy of being an Olympic host – remember the 1960 Squaw Valley Olympics? - will generate more area revenue when looked at over a period of more than just the Games year.
The hosting of an Olympic Games will leave a lot of “white elephant” facilities
While this may be the case in other cities, one of the strengths of the Reno/Tahoe bid is the venue component of the bid is based on using facilities that currently exist or which will be placed into regular community use prior to the Games. To the greatest extent possible, all major facilities which will be used for a Reno Tahoe Games have or will have a pre-determined post-Games use. Consequently, the anticipated planning for the games would include a particularly low level of required capital spending. It is this low level of projected capital spending that helps make the overall financial model for the Games achievable.
