By now, the Olympics have a proven record of ravaging host cities’ finances. The economic legacies of recent Games, including massive bills for taxpayers, burdensome security costs, and abandoned infrastructure, have been haunting enough that some cities now actively resist hosting them: Officials in Boston withdrew their 2024 hosting bid, while the residents of Hamburg banded together to decisively vote down their city’s campaign. Amid the turmoil, though, the International Olympics Committee (IOC) and its national affiliates seem to emerge from the Games richer, buoyed by lucrative TV and sponsorship deals.
As the standard for spectacle rises higher with each successive Games’ costlier and costlier trappings—among them lavish opening ceremonies, iconic stadiums and arenas, and gaudy civic “improvements”—it’s easy to become inured to this modern form of the Olympics and the all-but-certain damage they inflict on host cities. But hosting the Games has not always entailed onerous extravagance: The recent trends of rising costs and diminishing returns date back only to the 1980s, when changes in the IOC’s strategy put the organization, and the Games, on their current trajectory.
At the end of the 1970s, the IOC found itself at its nadir. The 1976 Montreal Games were by all accounts a fiasco, losing Canada and its citizens nearly $1 billion in a disappointing event that dozens of countries boycotted. Decades of mismanagement had left the IOC strapped for cash and reliant on too small of contributions from too many sponsors. These problems, coupled with the excesses and abuses of previous games—1968, for example, saw the deaths of hundreds of protestors at the hands of Mexico City’s police force—left the IOC choosing between only two willing cities, Los Angeles and Tehran, for the 1984 Games. When the Iranian Revolution of 1979 knocked Tehran out of the running, the organizers had no choice but to bank on L.A.