I am recently back from two weeks in Paris at the 2024 Olympics. It seems a fitting topic for a Dean’s Corner column. The Olympic games are a big, growing business. They are marketed aggressively; depend on a global operations platform; engage in state-of-the art technology, from logistics to supply chain to fintech applications; demand sophisticated levels of communications, audio, and visual support; serve tens of thousands of customers and event attendees; and require massive security, both physical and cyber. They also exemplify invention and innovation. And like any successful business, they adjust to the market demand, adding and deleting various sports in response to global interest and changing norms.
A History of Olympic Competition
Inspired by the Greek Games held over 1200 years, from the 8th Century BC to the 4th Century AD, the International Olympic Committee (IOC) was founded in 1894. The first modern Games were held in Athens in 1896. According to its website, the IOC selects the host city for each Olympic Games; supervises, supports, and monitors the organization of the Games; ensures that they run smoothly; and serves as the official governing body of the rules of the Games.
Throughout their history, the Olympic Games have been challenged by geopolitical and other disruptions. World Wars caused the cancellation of the 1916, 1940, and 1944 Olympics. Large-scale boycotts occurred during the Cold War, most notably during the 1980 and 1984 Games. The 2020 Olympics were postponed until 2021 due to COVID-19 restrictions.
These were not the only issues: The story line is replete with countries not competing or not being allowed to compete. Only Australia, France, Greece, Switzerland, and the United Kingdom have participated in every Olympics in the modern era. This year, some athletes were not competing for their nation, but competed either as independent members of the Refugee Team for athletes displaced from their country, or as Neutral Athletes whose nationalities were excluded from participation (e.g., Russia).
This year’s competition marked only the second occasion that a city hosted the competition for a third time. In addition to this summer, Paris welcomed international athletes in 1900 and 1924. London also hosted the Games three times, in 1908, 1948, and 2012.
Paris pursued its bid for the 2024 Games in competition with Boston, Budapest, Hamburg, Rome, and Los Angeles. The U.S. Olympic Committee initially chose Boston over Los Angeles, Washington DC, and San Francisco to be the USA bid city. An opposition campaign cost Boston both local and IOC support, and the other candidate cities withdrew, leading the IOC to award the 2024 games to Paris and the 2028 Olympics to Los Angeles.
Hosting has been remarkably contentious, with many scandals involving bribes and lies. It is difficult to determine the actual costs and benefits of hosting. The costs depend on the existing infrastructure: How many new facilities must be built? How efficiently can they be built? Benefits include global visibility and robust local economic influence during the Games, but the net result is very hard to calculate. The reality is that hosting the Games can be a classic example of the “winner’s curse.”
Suppose you are among the leaders of a city that wins the opportunity to host the Games. As you wake up the next day, rational questions begin to flow: Did we overbid? Did we promise too much? Can we execute efficiently? Will the things we promised to build serve future generations efficiently and usefully? It occurs to me that these are questions not unlike those faced by growing businesses, corporations, and entrepreneurial start-ups alike, as they pursue strategies to scale rapidly.
The Council on Foreign Relations posted some work on these topics from which I conclude two things: The numbers are big, and the outcome hard to plan and deliver. The 2016 Summer Olympics in Rio cost around $23 billion, 352% over budget; the 2020 Summer Olympics in Tokyo cost about $14 billion, 128% over budget; and this year’s competition in Paris is expected to come in at $9 billion, about 115% over budget. TV revenues are significant, running about $3 billion, and the IOC keeps half.
The number of bidders who withdrew and the substantial red ink associated with recent offerings suggest that potential host cities are re-examining the costs and benefits. Although consistent, reliable, comparable numbers are hard to find, it is clear that many host cities have not met financial expectations and have been overly optimistic that they could control costs and deliver value with refurbished and new venues. Los Angeles hosted in 1984 and is believed to have realized $223 million in profit. Not surprisingly, the number of cities competing for future hosting opportunities then rose sharply, but subsequent host results were disappointing. Los Angeles had been a lone profitable host, able to negotiate attractive terms and rely upon many existing venues.
2024 Outcomes, Medals and other Bragging Rights
Each athlete has a different perspective. For some, it is enough to be there as an Olympian, while others seek a medal or perhaps to medal multiple times. For the countries, it is a similar quest. Can your nation win its first medal ever? Or surpass your archrival in medal count? Some competitions are based on number of gold medals won and others on the total number of medals awarded. This year, the USA has been remarkably successful, with 126 medals, the most of any country. That count included 40 gold, 44 silver, and 42 bronze.
While it is logical that a country’s success in the Olympics would be driven in large part by population, that is not the whole story. India is the largest country in the world today but is not a major factor in medal counts. The USA and China are large and rank first and second in medal count. Japan is 12th in size but third in medal count. France and Australia are outside the Top 20 countries by population but rank fourth and fifth in medal count.
It may be most important that a country has a substantial middle class that fosters athletic preparation, or a concerted focus on Olympic representation. For example, despite their sizes, Hungary (10 million) and Cuba (11 million) punch far above their weight because of deliberate government spending. Practice varies by country, but the days of amateur athletics are fading. Even in the USA, where there was long amateur history, medalists are now compensated: $37,500 for every gold medal; $22,500 for a silver; and $15,000 for bronze.
In Paris, more than 11,000 athletes participated in the Olympics, representing more than 200 individual Olympic committees. The USA had the largest team with 637 athletes. The host nation, France, was close behind with 596. While the USA and China fought for dominance in numbers of medals, a few countries (Albania, Cabo Verde, Dominica, Saint Lucia, and the Refugee Olympic Team) won their first medals in Paris. Saint Lucia and Dominica both won gold.
The Human Stories Are Often the Best
There are a few great stories coming out of Paris. In the javelin, Pakistan’s Arshad Nadeem, age 27, threw 92.97 meters, breaking the Olympic record. The field included two-time champion Anderson Peters of Grenada, and the defending champion Neeraj Chopra from India. Nadeem brought Pakistan its first medal in 32 years and its first gold since 1984. He came from modest roots, and his earliest javelins were not expensive, sophisticated devices, but junk eucalyptus branches. His weight training utilized iron rods, canisters of oil, and concrete—resourcefulness at its best. His community encouraged him by crowdfunding his earliest training and the cost of travel to competitions.
Regulation and Innovation by the Olympic Committee
The Olympics have long brought diverse perspectives and sports traditions to the global stage, which has, at times, fostered innovation at the Games. For example, new basketball rules prohibiting goaltending, instituting a shot-clock to speed play, and adding the three-point shot, were introduced elsewhere and then embraced by the Olympics. Scoring increased, the speed of the game was enhanced, and most people applauded the changes.
Strong supporting organizations create discipline for participants and are important to garner support from the Olympic committee. In 2024, breakdancing (or breaking) was introduced in Paris, but it appears it may not be supported in Los Angeles in 2028, in part because there is no global organization that sets the framework for judging excellence and establishing ground rules.
The Olympics have fostered experimentation, both introducing and terminating various sports over the years. Necessary elements for these experiments to succeed are a passionate audience for the sport, and a fervent, globally competitive environment that creates exciting competition. The IOC has approved flag football and squash as first-time offerings in 2028. Breakdancing and perhaps boxing will be out, but skateboarding, sport climbing, and surfing will transition to permanent events in 2028. A few sports will return to the Olympic stage after years or decades away, including lacrosse and cricket. Neither sport has been in the Olympics since the early 1900s, but their return in 2028 reflects steady increases in global interest and competition.
You Can’t Put a Price on This Experience
Paris is a wonderful city, and we took advantage of the opportunity to spend a day in the Louvre and another in the Musee d’Orsay. Living in a rental in a neighborhood gave us a taste of Parisian living, complete with buying local bread, cheese, and produce each day. Some 40,000 volunteers helped guide us around the city.
Technological innovations made our experience better. Our smart phone was our friend, indeed our daily partner. Paris created visitor-friendly apps for finding the best path to each venue, combining bus and train options. Transit tickets were available by the ride or by the week. They sat side-by-side on our phones with the tickets for the various venues we attended. The purchase of those tickets began a year earlier and evolved over the subsequent year. We bought the event and the stage of competition we wanted, with prices increasing toward the final stage of the competition. We were privileged to see men’s and women’s basketball finals, women’s football finals, mixed-doubles archery finals, numerous track and field events, gymnastics, swimming, and more.
One of the ways that Paris made its bid affordable, and a reason it may have had a favorable financial outcome, was intelligent use of existing facilities rather than new construction. The Seine River was a challenge though. It was polluted, and the city’s sewage often overflows in bad weather. After a year of focused efforts to clean it up, the weather failed to cooperate, bringing a massive rainstorm on the night of opening ceremonies that necessitated delay of the scheduled swimming in the river. Nonetheless, the Seine played a huge role in the very wet opening ceremonies that were the first in Olympic history to be outside of a colosseum-style venue. And, of course, the Seine was a constant beautiful presence throughout the games.
Food was available at all venues, the typical “fast food” such as one finds at athletic events. Outside the venues there were excellent dining options that make France the world’s culinary envy, and reservations were not hard to get. Better dining options were likely to open at 7 p.m. and stay open late by most U.S. standards. We did not gain weight, not because the food was low calorie but because the venues led us to walk between stadiums, to and from transit and exploring other parts of the city.
I leave you with a final personal reflection about how truly exciting it was to be there, to celebrate athletes, to cheer for our country, and to meet people from around the world. You can’t put a price on that!
