How Boston's Olympic Bid Came Crashing Down

Until yesterday morning, it appeared Boston's bid to host the 2024 Summer Olympics was contingent on waiting out the Sept. 15 deadline for the U.S. Olympic Committee to submit its candidate. Everyone — the bid's high-powered promoters, its loud opponents, the economists hired by the state to examine the proposal's finances, and a certain VICE Sports writer — had their eyes on that date, with the anticipation of a long drawn-out public battle leading up to it.

Instead, at 9:45 a.m. yesterday, Boston Mayor Marty Walsh extended a giant middle finger to the USOC, declaring that he wouldn't sign an agreement promising to cover any Olympic losses. Within hours, the U.S. Committee's board had voted to boot Boston from the running. There will be no Olympic Pahk, no Storrow Drive Giant Slalom, no MIT robot hurdles. If you live in the U.S. and want to plan a road trip to watch synchronized swimming nine years from now, you should probably brush up on your Canadian.

Walsh's announcement may have been unexpected, but a showdown over the bid's finances had been coming for a long time. Boston, for those unfortunate enough never to have experienced its joys, was one of the more unlikely Olympic bid cities from the start: Choked with traffic, too expensive to buy a house in, let alone a velodrome, and coming off a highway project that took three decades and cost $21 billion, it was less a viable candidate than a dare. An Olympics in Boston would be like a World Cup in, er, well then.

Even cities with streets that run in predictable directions have had, shall we say, a checkered history with running the business end of the Summer Games. It's difficult to put a final price tag on something as big and complex as the Olympics. Three years after the giant John Lennon face faded from memory, people are still debating whether the 2012 London games broke even or lost billions. (It doesn't help that Olympic Games organizing committees — OCOGs, in Olympic parlance — like to report only their own budgetary wins and losses, neatly eliding such matters as whether the government had to kick in a billion dollars or so for security.)

And when the Olympics do run into red ink, it's typically of oceanic proportions: Athens spent $14 billion on the 2004 Summer Games, and Beijing an incredible $40 billion in 2008, ending up with lots of never-again-used sports venues and equally impressive mountains of debt. The last U.S.-hosted Olympics, in Atlanta in 1996 — which is generally well regarded except for that little homegrown terrorist incident — lost $1 billion by one estimate.

With the Olympics increasingly becoming synonymous with white elephants and unpaid bills, even the International Olympic Committee had to stand up and take notice, which it did by sternly warning cities that they should really try not to build so many useless stadiums and lose so much money. And Olympic bid committees have happily toed the line, peppering their bid books with talk of reusable facilities while still promising the IOC all the fancy new toys that are key to winning a bid.

Boston 2024 CEO Richard Davey told me last week, before his world went kerflooey, that his city's bid would not fall into the usual red-ink trap. "For one, this is going to be a privately financed games," he explained, pointing to the many, many charts in his bid books — both the original edition and the "version 2.0" that was released in last June when the first one proved insufficiently convincing — showing cost numbers that were neatly balanced by revenues for such things as ticket sales and corporate sponsorships.

Other cities had changed their minds about key parts of their bids in midstream, leaving themselves with swollen budgets, Davey insisted. "Largely it was because people made decisions to make changes," he said. "One perfect example is London's stadium. It was going to be a temporary stadium when their first budget came out, and after that first budget came out, they made a decision to build a permanent stadium. It was a decision that they made — it wasn't an overrun." The trick to an on-budget Olympics, he said, was "upfront proper planning."

Of course, as noted by Chris Dempsey, the 32-year-old Harvard Business School grad who co-founded the opposition group No Boston Olympics, London made the same promises at first, too. "The boosters here are very much falling into the same patterns of rhetoric that you've seen from other cities," he said. "London was the first bid after the Athens Olympics, and they made all sorts of claims that 'We've learned from Greece, we aren't going to have the cost overruns because we've learned that lesson, we're not going to have any white elephants, we're going to make sure that this stuff has a use afterwards.' And then they won the bid, and within two years they had revised their budget upward by 3 times" from $4.5 billion to more than $15 billion.

And with a whole mess of moving parts to the Boston bid — not just several major venues that would have to be built from scratch, but an entire railroad yard that would need to be decked over to create space for the Olympic stadium — Dempsey worried that could end up a recipe for overruns: "If all of a sudden this deck falls a year behind schedule, they still need to build it for early 2024 or mid 2023 — and all of a sudden you're going to have to start throwing money at it to meet the IOC's deadline."

In fact, an Oxford University study of every Olympics since 1960 found that "the Games overrun with 100 per cent consistency," with the mean overrun clocking in at 179 percent. In other words, the average Olympics costs nearly three times what organizers promised during the courtship phase. That makes the Olympics "one of the most financially risky type of mega project that exists," noted authors Bent Flyvbjerg and Allison Stewart. This, they pointed, is exactly what you'd expect from a project that requires the host city to sign a guarantee to cover overruns, something Walsh was unwilling to do. "These data suggest that this guarantee is akin to writing a blank cheque for a purchase," Flyvbjerg and Stewart write, "with the certainty that the cost will be more than what has been quoted."

There were certainly plenty of items in the Boston bid book that seemed certain to cost more than what had been quoted. Start with the Olympic stadium itself, which was set to hold 60,000 people for the opening and closing ceremonies, and cost a thrifty $176 million — or just about exactly one-tenth what St. Louis Rams owner Stan Kroenke is talking about spending on a similarly sized new stadium in Inglewood, California.

Boston was going to get off so cheaply, explained Davey, because the stadium would be temporary. It would be dismantled after the games to make way for new housing or packies or whatever Boston wanted to do with the site. As an example of a similar structure, he pointed to the Emmental Arena, a temporary structure erected in the Alps in 2013 so that 52,000 Swiss could watch whatever the hell is going on here.

Emmental, however, had a couple of special factors that were unlikely to be repeated in Boston: First of all, the particulars of watching Schwingen meant that the building only had to be a single deck, which means we're essentially talking about six sets of giant roofed bleachers that had to be erected and then taken down again. And then, the Swiss venue was partly built by the Swiss Army (no doubt with the Allen wrench tool), which while it undoubtedly saved on labor costs, would probably be against Boston union rules, if not international law.

In any event, all the talk about ballooning costs not only worried Boston residents — who were mostly opposed to hosting the Olympics from the start — but garnered opposition from more than a few local elected officials, the sort who typically fall into line once there's sports to be chased. Boston city councilor Tito Jackson had already announced he planned to subpoena Boston 2024 for more financial details; Massachusetts Gov. Charlie Baker, meanwhile, hired economists Brad Humphreys and Allen Sanderson — both noted skeptics about the benefits of sports construction — to put together that report on whether the Boston bid numbers made a damn bit of sense. (One hopes we'll still get to see it, as it would be fun reading, though the governor may end up deciding that would be rubbing salt in Boston 2024's wounds.) Walsh, in all likelihood, merely put the final nail in the coffin with yesterday's announcement, though he certainly did it with gusto.

So what does this mean now for the 2024 Summer Games, and the Olympics in general? Boston isn't the first city to bow out of the running after it had been its nation's top choice — Oslo, Krakow, Stockholm, and Munich all bailed on the 2022 Winter Games last year.

The USOC still has time to pick one of the rejected runners-up and throw it into the international pool. (Los Angeles is considered the likeliest candidate, if only because of the lingering memory of it hosting on a cheap budget once before, at a time when nobody wanted the Olympics and you could get away with insisting on hosting the whole thing in existing stadiums.) There will be another round of bidding for the 2028 Olympics starting any day now, which surely will see no shortage of cities willing to throw their hats in the ring.

Dempsey, for one, dreams of a day when the Olympics will just settle down in one place and put this orgy of beach-volleyball-stadium-building to an end. "Since 1896, we've invented the radio, TV, the internet, air travel," he says. "You're in a world now where 99.9 percent of people watch it on a screen. And the vast majority of the other people who are going to be there will fly in to see it. So they could really fly anywhere in the world for it — they could fly the same place every four years, and you could build this stuff once and not have to worry about with these massive capital and infrastructure costs."

Okay, we're probably at least a few years off from Olympic Disney. In the meantime, let's all just be happy for Bostonians for dodging a bullet. As one Boston friend emailed me in passing along the news: "Thank gawd."