What will the Olympics cost Vancouver?

Marketplace Staff Feb 15, 2010
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What will the Olympics cost Vancouver?

Marketplace Staff Feb 15, 2010
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TEXT OF INTERVIEW

Bob Moon: We mentioned a moment ago the ongoing money woes in Greece. Some financial analysts over there actually point to the super-expensive Summer Olympics in Athens as a big contributor to all that red ink. It always seems to come as a huge surprise to politicians that being a host city can be a burden of Olympic proportions. This year, protesters in Vancouver have been focusing on billions of dollars that they say should have been spent on more important things. Vaughn Palmer is a columnist for the Vancouver Sun, and he’s been looking back to a time when the public price tag seemed oh-so-puny before it started creeping higher and higher. Vaughn, welcome to the program.

VAUGHN PALMER: Thank you for having me on, Bob.

Moon: Take me back to the beginning, when the Vancouver organizations are launching this bid to host the Winter Olympics, what was supposed to be the cost at the time?

PALMER: At the time they were talking about staging the entire games for less than a billion dollars. Most of the money was going to come from sponsorship, television revenue, private sector investors. And at most they figured they needed about $100 million from two levels of government: our senior government in Canada and the government of British Columbia.

Moon: OK, so that was back in December of 1997, and then we have officials saying, hey, the games are going to pay for themselves, we just have to make sure there is a good business plan, and we’re not subsidizing this. And then we come to this kind of secretive thing about the city of Vancouver having to take over the risk in completing the athlete’s village.

PALMER: Look, this is a standard pattern with Olympics: When they start bidding they low-ball what’s it’s going to cost the taxpayers. You mention the Olympic village in the city of Vancouver. The company that was building it got into financial trouble, the city had to step in and bail it out. They had no choice. Normally when a building project, like a residential project, is in financial trouble in a recession, well, it gets mothballed. They couldn’t mothball the Olympic village, they needed to house the athletes starting this last month.

Moon: But according to the Vancouver organizing committee, even today the official operating budget is $1.65 billion, total venue construction cost of $542 million, that doesn’t sound too bad to me.

PALMER: Another key aspect of the Olympic racket. When you’re talking to people who want to host the games, they only talk about the cost of staging the games, which means the actual events and any venues. They do not include in that price tag, security, all the other things you need to do in order to get the International Olympic Committee to award the games to you.

Moon: OK, by your reckoning what is the cost going to be?

PALMER: I figure around $8 billion. I mean, it’s approaching that. That’s all in, and look, some of that will be recovered from television rights, ticketing, sponsorships, and we will have some things left over. We had to rebuild a major highway here in British Columbia to get the games. Well, the highway will be usable for many years to come.

Moon: What’s your read on the public mood in Vancouver? Do people think it’s been worth it?

PALMER: I would say the most recent opinion polls suggest that Canadians in general feel great about the games. They feel really positive about them. That feeling is more mixed in British Columbia. And I think the reason it is more mixed in the opinion polls in British Columbia is two-fold. One, the games are now a massive disruption to a society because of security and all that. The other reason is I think British Columbians are acutely aware of a lot of the cost issues. They expect to go on paying for these games for some years to come.

Moon: Vaughn Palmer is a columnist with the Vancouver Sun. Thank you very much for joining us.

PALMER: You’re welcome, it was fun.

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