Blatter and Rogge and the Culture of Sports and Government Spending

 

You kind of wonder what Seth Blatter and Jacques Rogge are really thinking about the protests in Brazil, which seemingly are a reaction to the government’s out-of-control public spending on sports facilities for both the 2014 FIFA World Cup and 2016 Rio de Janeiro Summer Olympics. People like Blatter (FIFA) and Rogge (IOC) have led organizations that seemingly have far more importance in day-to-day public life. They represent an entertainment form, yet the organizations have an incredible stranglehold on politicians who have made absolutely disastrous financing decisions to support a mild form of entertainment–sports.

Brazil protests continue over rising public transportation costs and government spending on the World Cup and Olympics

For decades, both the Fédération Internationale de Football Association (FIFA) and International Olympic Committee (IOC) have operated unabated and with no regard to the actual economic realities of the countries that want their precious events. Of course, the organizations can ask for the moon, stars and universe, but that doesn’t mean local elected officials or even dictators should acquiesce to these sporting groups.

Brazil got the World Cup nod in 2007 and with it came promises of building or renovating 12 venues for the event. Brazilians will be paying Reais $28 billion or nearly U.S. $13 billion to stage the event.

The spending to please Blatter’s group, FIFA, or Rogge’s group, the IOC, is staggering and inexplicable. But, there are enough reasons to justify the expenditures. The bidding governments always trot out the hackneyed line, “we need it for infrastructure, improving roads, mass transit and airports. It’s good for business and once people see a country on TV, the will vacation there.”

Of course, there is no real way to quantify business increases or tourism, but the perceived perception is what counts and it sounds good.

In England, no one knows just how much money taxpayers put into the London 2012 Summer Olympics, and that tab may not be calculated until 2014. Recently, I had a chance to speak with a number of Londoners, Scots and Welsh about the London Games.

The Londoners were proud of hosting the event. They felt it was an excellent opportunity to show off the city. The Londoners pointed out that a small section of the city that still had remnants of the Nazi bombings during World War II was rebuilt and got new life. Putting up with traffic blockades for IOC officials and athletes and people being told to take a holiday or work out of the house during the three-week Olympic event was a good thing.

But, it is a different story from those who live in Scotland and Wales. They paid for the Games and got nothing for their investment. Wales and Scotland were forgotten during the Olympics. Scotland will vote on September 18, 2014 on whether they should split from England or not. The Olympics didn’t bring a good feeling about England for a certain group of Scotland’s residents.

The IOC is in the process of selecting the 2020 Summer Olympics venue. The three cities competing for the prize, such as it is—the Games, are extremely flawed. There is Madrid, Spain where banks have been bailed out by the government, the unemployment is heavily into double digits and there probably is little money available to build the kind of experience that Rogge and his band of delegates want.

Turkey wants to host the Games with Istanbul, the designed city in the country. But, there are anti-government protests going on in the country, and that has to worry IOC delegates. At least you would think unrest would bother the Swiss-based group. The sight of police breaking up demonstrators on European TV cannot help the process.

Then, there is Japan, which is still recovering from the 1990s economic meltdown and the Fukushima Daiichi nuclear power plant disaster following a magnitude nine earthquake and tsunami on March 11, 2011. Perhaps Japan’s political and business leaders think getting the Olympics will heal the country and provide a financial cure.

The three countries should stay as far away from hosting the Olympics as possible or give the IOC a demand of their own. Don’t tell us what to build on the public’s euro or yen or Turkish lira. In fact, all competing entities should turn it around and say, “These are our demands, you are a private company and you want to do business here, you pay for the venues, you pay for security.”

Brazil, under President Luiz Inácio Lula da Silva, was so desperate to land the 2014 World Cup. It did something that seemingly is contrary to all business practices. FIFA demanded that Brazil not tax any profits FIFA would make from the Games. The Brazilian Congress folded like a cheap suit and passed legislation that exempted FIFA from paying taxes on profits the group figured to make from the World Cup in the country.

Russia won the right to host the 2014 Sochi Winter Olympics. The original thought, the Games would cost U.S. $10 billion. The revised estimate now is $50 billion. The justification is that Sochi will become a major destination spot after the Games, and in time, the money will be recouped. That is quite the notion, but that’s one of the reasons political hacks go after big sporting events.

There is global recognition leading up to and through the event. But, once the circus leaves town, locals have to clean up after the elephants and it is not a pretty sight financially. Just spend a day in Athens, Greece. The 2004 Summer Games helped get the country on the road to insolvency.

The Olympics leave a massive trail of failure. Unused stadiums and venues, incredible debt partially caused by the high cost of securing the Games and making them safe for athletes, consumers and everyone else connected to the event. In 2002, the U.S. had more boots on the ground to protect the Salt Lake City Winter Games than in Afghanistan.

The U.S. and Russia have announced a joint-security plan and cooperation for next February’s Sochi Olympics.

FIFA is still comfortable with Brazil hosting the 2014 World Cup. The IOC knows Brazil has made a financial commitment and that’s good enough for the chalet dwellers from Lausanne, Switzerland, where the IOC is based.

Sports spending is far out of control. The investment is terrible for taxpayers, yet there is an intrinsic value. You cannot explain national pride when your team wins the World Cup and when your nation wins a gold medal in the Olympics. Truth is, none of that really matters to 99 percent of the people watching the event. The event is important to so few, athletes, managers, coaches, organizations, agents, sponsors, politicians yet the package is sold in almost a jingoism fashion.

It seems Brazilians have caught onto the kayfabe.

Evan Weiner, the United States Sports Academy’s 2010 Ronald Reagan Media Award winner, can be reached at evanjweiner@gmail.com. His e-books, “America’s Passion: How a Coal Miner’s Game Became the NFL in the 20th Century,” “From Peach Baskets to Dance Halls and the Not-so-Stern NBA,” and “The Business and Politics of Sports” are available at www.bickley.com, Amazon.com, www.smashwords.com, iTunes, Nook, Versent Books, Kobo, Sony reader and Diesel.

 

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