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Atlanta offers example of how to make Olympic Games work

Congratulations to Beijing and Almaty (Kazakhstan) for submitting their candidature files and reaching the final round of bidding for the 2022 Olympic Winter Games. You have survived a war of attrition that had more to do with the transparency of your competitors than your superiority. As a result, one of you will be rewarded with the honor of hosting the world’s greatest gathering of mankind.

For the rest of us, the 2022 bid marks a low point in the cycle of demand for the Games, raising important questions about the feasibility and long-term value of the endeavor for any host city. The bid for 2024 looks strong; it will have a field of high-profile global cities, including the newly nominated U.S. candidate, Boston. But unlike the 2022 candidates, all of them will need to transparently answer two fundamental questions: Why should we do this, and How will it be paid for?

Considering that the original field of 2022 candidates was also strong, candidate attrition remains a legitimate threat to the Olympic movement. A successful race will turn on the strength of candidates’ answers to the two big questions, Why and how? The standard procedure to gain local support is to commission a study that forecasts a financial windfall, but like the foliage emerging from the rotting venues of Athens, Sydney, Beijing and Sochi, evidence of folly continues to grow.

This raises an even more elemental question regarding funding the Games: Is it even possible anymore? International Olympic Committee President Thomas Bach is doing his part to close the gap between the fantasy and reality of hosting, but the burden of defining feasibility and value will still fall upon the host city and country. History provides the case studies of failure, but what about success?

The long-term impact for London 2012 is still being written, but two decades on, there is one story of success that is worth a revisit: Atlanta.

Atlanta offers a best-practices business model for future hosts of Olympic Games.
Photo by: GETTY IMAGES
No Olympic Games are flawless, and the 1996 Centennial Olympic Games certainly had challenges, but a fair-minded assessment is both timely and instructive. With the benefit of hindsight, how did Atlanta do?

As with any large endeavor, there are only two primary sources of funding for an Olympic Games: public/government money and private/corporate money. The money that the IOC provides for the Games — both now and in the future — is entirely sourced from commercial (private) partners; the city then makes up the difference through its commercial partnerships and revenue streams (broadcast rights, tickets, licensing and merchandise). Many recent Olympic Games have supplemented IOC support with billions in public funding, resulting in massive deficits and sports infrastructure with questionable value.

In contrast, the 1996 Games were entirely funded by private enterprise. The city and the organizing committee were heavily criticized for this and accused of over-commercializing a once-pristine institution. But what is rarely noted about Atlanta is an achievement that, today, might be considered miraculous: The 1996 Olympic Games broke even and used no public money. Almost 20 years later, Atlanta has delivered the IOC with a valuable legacy gift: a best-practices business model that provides a viable road map for future hosts and, by extension, the bid process.

Admittedly, Atlanta’s location as headquarters to major global corporations gave it something of a hometown advantage, but that did not remove its obligation to deliver tangible value to its commercial partners in exchange for funding the Games. The organizing committee fully leveraged the opportunity, but were the Games “overly” commercialized? Not if one considers the alternative: public funding, something that is generally off the table in today’s United States.

So that’s one way to fund an Olympics, but the other question is equally important. Why even do it? What is the opportunity cost of spending billions on an Olympic Games, money that, even if privately sourced, might otherwise be used for education, infrastructure or essential services?

These are value judgments that must be answered based on the unique priorities of each individual city. It is a question of legacy value: What will endure beyond those two weeks in the spotlight? Atlanta teaches us that the answer can take many years to fully emerge, but today, the positive impact upon the city is undeniable.

The Olympic Games set the stage for numerous improvements, among them the complete transformation of Atlanta’s eroding public housing complexes to high-quality mixed-income units that have reduced poverty and crime. Local academic institutions — Georgia State, Georgia Tech and Clark Atlanta University — gained new student housing and athletic facilities. Almost all Olympic venues enjoyed a sustained post-Olympic life, and the downtown area of Atlanta was transformed with the creation of the Centennial Olympic Park. What was once an urban wasteland is now a thriving tourist mecca that includes the Georgia Aquarium, The World of Coke, the National Center for Civil and Human Rights, and the College Football Hall of Fame — an astonishing legacy considering it all would have been highly unlikely without the Games.

This does not mean Atlanta’s particular legacy would have equivalent value to other prospective host cities. Atlanta’s wisdom was in developing an intelligent plan that laid the groundwork for growth and investment, both public and private. That is the transferable lesson and one that any future Olympic city can embrace.

The IOC is on the right track, and its effort to make bidding and hosting more feasible is a worthy effort to re-energize demand from prospective hosts. For those cities preparing to embark on this journey, the future is promising, but the risks remain, and there is no substitute for experience. The 1996 Olympic Games in Atlanta is an experience worth revisiting — for the Olympic movement and for all who wish to be a part of it.

Kevin Donovan (kdonovan@renaissance-sports.com), president of Renaissance Sports, was a program manager for Delta Air Lines’ 1996 Olympic sponsorship and consulted on the successful Olympic candidacy for the Sochi 2014 and Pyeongchang 2018 Olympic Winter Games.



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