Would the 2016 Olympics Be Good for Chicago?

President Barack Obama is flying to Denmark this week to lobby for Chicago to host the Olympics in 2016. This is the first time an American president has attended an International Olympics Committee vote, and it's expected to close the already razor-thin margin between front-runners Chicago and Rio de Janeiro. But wait. Don't the Olympics often lose money for cities?

They certainly used to, but now the record is more mixed. Before the 1980s the Olympics were generally considered something like a epic house party -- a glorious celebration followed by a painful, messy hangover where the hosts are left to clean up the mess with powerful headaches and empty wallets. Some claim Montreal is still paying off its 1976 Olympics with its high cigarette tax.

But the 1984 Olympics -- perhaps the most financially successful games ever -- left Los Angeles with hundreds of millions of dollars it used to endow the Amateur Athletic Foundation. Barcelona used the 1992 games like a pole vault to lift the city into the pantheon of European international capitols. Atlanta broke even in 1996. (Sydney did not in 2000.) The 2004 games saddled Athens with both a huge debt and a raft of unusable venues. Beijing claims it made about $170 million profit from the games in 2008, but China has a fraught relationship with self-reported statistics.*

Like I said, mixed record. Overall, it's terribly difficult to put a number to the Olympics' impact. Not only are the costs of hosting shared by potentially millions of citizens, but also the future revenues from tourism that stem from the city's heightened reputation are difficult to price.

Will Obama's presence make a difference? World leaders have been pretty successful plugging their countries at the IOC in the last few years. From the NYT:

Prime Minister Tony Blair of Britain set the bar high in 2005, when he and his wife, Cherie, traveled to the I.O.C. meeting in Singapore to lobby for London's bid for the 2012 Games. London won those Games in an upset over Paris. Mr. Blair's last-minute efforts were said to have won the day.

At the next vote to choose a host city, in 2007, Vladimir Putin, who was then president of Russia and is now prime minister, addressed the I.O.C. membership in Guatemala City in English, pushing for the resort city of Sochi, Russia, to host the 2014 Winter Games. Sochi was chosen.

*Big thanks to this Independent article for interesting Olympics background.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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