Be careful what you wish for

The Spanish capital is desperate to host the Olympics, but would it benefit the city?

Work on the Peineta Stadium, which forms part of Madrid's bid, has stalled.
Work on the Peineta Stadium, which forms part of Madrid's bid, has stalled.SAMUEL SÁNCHEZ / EL PAÍS

A successful Olympic Games is measured on the track and field, in the swimming pools, and on the podium - but above all in terms of the number of people watching. For two weeks every four years, the eyes of the world are on the host city, which means meeting the highest levels of professionalism and organization throughout the process, starting with the bid. Just ask Terrence Burns.

He is the man that Madrid City Hall has hired to organize its third attempt in a row to host the Olympic Games. The bid will be presented, along with those of Tokyo and Istanbul, to the International Olympic Committee in Buenos Aires on September 7, with the decision to be made that day.

Burns was the man behind Beijing's successful Olympic bid, along with Vancouver's and Sochi's, and he also likes to take the credit for Russia being chosen as the host of the World Cup in 2018.

He knows that not a single detail can be left to chance: he will have written the scripts for Prince Felipe and Madrid Mayor Ana Botella, of the Popular Party (PP), including details on facial expressions, body language and tone of voice.

For two weeks every four years, the eyes of the world are on the host city

This time around, Madrid is the frontrunner, with an overall score of 8.08 as it goes into the final lap, against Tokyo's 8.02 and Istanbul's 6.98. If Madrid is elected on Saturday, the repercussions will be felt over the next decade - a decade that promises to be tough.

Madrid's organizing committee says that 80 percent of the infrastructure for the Games is already in place. Inevitably, Madrid's benchmark is Barcelona. But Madrid 21 years on is a very different place compared to the Catalan capital back then. Barcelona used the Games to reinvent itself from a post-industrial city to a tourism and services center. Barcelona was a showcase for the Spanish miracle, a country that had emerged from dictatorship barely 15 years earlier to become a fast-growing European economy. Madrid is trying to put a positive spin on its current financial woes by presenting its bid as "the low-cost Games."

Barcelona had begun preparing for its bid a decade earlier, rebuilding entire areas of the city and improving public services. The cost of the Games was anywhere between six billion and 10 billion euros, an unprecedented spending splurge focused on transport infrastructure, with just 10 percent of the budget going toward sports installations.

Madrid has spent much of the last two decades improving its infrastructure as well, building a new airport terminal, extending its Metro system, and sprucing up its riverbanks by putting the adjacent M30 ring road underground. In the process, it has run up debts of some seven billion euros. It has an unemployment rate of 20 percent, and problems paying its suppliers.

The former president of Brazil, Luiz Inácio Lula da Silva (l), consoles his opposite number in Spain, ex-Prime Minister José Luis Rodríguez Zapatero, after the bid for the 2016 Games went to the Latin American country in 2008.
The former president of Brazil, Luiz Inácio Lula da Silva (l), consoles his opposite number in Spain, ex-Prime Minister José Luis Rodríguez Zapatero, after the bid for the 2016 Games went to the Latin American country in 2008.AP

Madrid City Hall knows that if the city is elected it stands to receive around one billion euros in funding, which it could make go a long way.

Prize-winning architect José María Ezquiaga, who has worked for Madrid City Hall for many years, insists that the Olympics are an opportunity for the capital. "The main infrastructure is already in place; all that is required is an Olympic Village close to the city and a Metro line," he says.

Ricard Santomá, the head of business school ESADE's Sant Ignasi tourism school, says that to produce long-term benefits from hosting the Olympics, a city has to appear to have spent wisely on infrastructure. "In the run up to the Games, GDP grows rapidly; afterwards, it falls, and that is where it is important to manage the legacy," he says, citing Athens - which built huge stadia throughout the city that now stand empty - as an example to avoid. Greece spent nine billion euros on its Games, with the cost contributing to its economic collapse in 2008.

Santomá says that too many Olympic candidates mistakenly think that there will be an automatic increase in tourist numbers: "If the city is well known, like London, visitor numbers can fall off, which is what happened there. People waited until after the Games to visit."

This time around, Madrid is the frontrunner, with an overall score of 8.08

Madrid's organizing committee will also be taking note of the many academic studies of the impact of the Games on previous host cities: Oxford University's 2012 survey concluded that the biggest danger to a project, unsurprisingly, is overspending. The Montreal Games, held in 1976, were almost eight times over budget, and it took the Canadian city three decades to recover. Barcelona was four times over budget, and yet the city still lacks a decent local rail infrastructure.

Among the success stories are Tokyo in 1964, which Japan used to tell the world that it was no longer a country of warmongers, and instead a technological paradise. A report published by the Royal Economic Society in 2011 says that countries that host the Games see a 30-percent increase in foreign trade revenue, due to international perceptions that they are open to the world.

Playing the long game...

- 1965. Avoid improvising. In the summer of 1964, Spain returned from the Tokyo Games without a single medal. That winter, Madrid"s mayor, Carlos Arias Navarro, grudgingly signed off on a project to put the city forward as a candidate to hold the 1972 Games. The project, which was illustrated with photos of rowing boats on the lake in the city"s Retiro Park, was presented to the International Olympic Committee. Arias was so unenthusiastic that he couldn"t even be bothered to attend the vote in Rome the following year.

- 2005. Monaco"s question. Some have attributed the blame for Madrid failing to win the 2012 Games to a Greek member of the IOC who mistakenly voted for Paris instead of Madrid (he denied this), while others cite the brilliant double act of Tony Blair and Sebastian Coe in selling London. But the Spanish collective imagination remembers Albert of Monaco"s unfortunate question regarding security in the Spanish capital a few days after a small bomb went off in front of the Peineta stadium. London won, despite having considered pulling out just a few months earlier.

- 2009. Neither Obama nor Gallardón. US President Barack Obama travelled to Copenhagen to back Chicago"s bid, while Rio was rank outsider. "But the Brazilians pulled out a map of the world, pointing to all the places where the Games had been held: everywhere except South America. It seemed only fair that they were given the job," says Manuel Cobo, then deputy mayor of Madrid. The decision almost reduced the mayor of the Spanish capital at the time, Alberto Ruiz-Gallardón, to tears.

Ferran Brunet of Barcelona's Autonomous University is an expert on the impact of the Olympic Games on host cities. He says that overall, they produce more benefits than negatives: "Even when a city fails to win, there are benefits, as it pulls in private investment, and helps create a generation of people who can manage big events."

Surveys show that around 80 percent of Madrid's inhabitants support the bid. What's more, there have been few protests of any size, says Nacho Murgui, the president of the regional federation of Madrid residents' associations. "We were against the 2016 bid, because we thought that it was more important to deal with the crisis, but this time around there was no doubting our support." That said, he points out that the authorities didn't bother to involve residents' associations in their preparations.

Opposition to the Games being held in Madrid is based largely on what happened with recent events such as the Americas Cup and Formula 1 in Valencia, and the 2008 Zaragoza Expo, all of which cost the taxpayer huge amounts of money. Corruption and a lack of transparency are among the main concerns of Spaniards, according to polls.

Some parties, notably the United Left coalition, say that the money would be better spent on maintaining services, while abroad, there has also been surprise that a country that required a 41-billion-euro EU bailout of its banking system, with 27-percent unemployment and no signs of economic recovery in sight, is bidding for the Games.

Madrid's organizing committee says that most of the sports infrastructure is already in place. Critics agree, but say that much of it is underused. They point to the so-called Caja Mágica, built to house tennis events at a cost of 300 million euros in 2009, and which stands empty almost the entire year round. Then there is the question of whether the Games will generate much-needed jobs. Mayor Ana Botella initially talked of some 320,000 new posts; this was later reduced to around 150,000, half of which were generated by the 6.5 billion euros City Hall has already spent on infrastructure over the last decade. The latest estimate is that if Madrid wins the bid, some 56,000 jobs will be created between now and 2015, with a further 120,000 indirectly.

The question Madrid needs to ask itself, say the experts, is just what does it want out of the Games? Madrid 2020 aims to be much less costly than Barcelona '92, but to produce the same catalyzing effect. Is that possible? The Games are a big party, and parties are not generally profitable affairs: they aim to entertain, to make people happy, and at best might make the host popular.

Madrid already has €7bn of debt, and its unemployment rate is at 20 percent

"Being realistic, a lot of host cities have lost money on the Games, but they believed it was worth the bother because in the long term, it produced benefits. The Games will likely cost us a lot of money, but that is what investment is about," says José María Ezquiaga.

Jaime Lissavetzky, the head of the Madrid branch of the Socialist Party (PSOE), insists that the Games "must be economically viable," particularly in the current context. Sports minister between 2004 and 2011, Lissavetzky was involved in the previous two bids. He will be flying to Buenos Aires on September 5 to offer his support.

Lissavetzky says that it is important to put aside political differences for the time being, but cannot resist criticizing the PP for what he calls "putting all its eggs in one basket," accusing it of not having a plan B for Madrid in the event that it doesn't win the bid on Saturday. "I would have made plans for the city to become a scientific center at the same time," he says.

The outcome of the IOC's decision will undoubtedly have political repercussions. Ana Botella has many enemies within the PP who would not be sorry to see her go if she loses the bid. At the same time, the Socialists insist that even if she wins, this does not guarantee her victory at next year's municipal elections. Lissavetzky's experience in organizing major events gives the Socialists a good chance of taking City Hall back for the first time since the Barcelona Olympics. Both parties know that controlling the city in the run up to hosting the Games would be a unique opportunity; similarly, they know that losing the candidacy would mean running a city with little ability to attract investment.

Mayor Gallardón (c) is comforted in front of the Spain bid team after Madrid lost out to London in 2005.
Mayor Gallardón (c) is comforted in front of the Spain bid team after Madrid lost out to London in 2005.EFE

Lissavetzky is aware that justifying Olympian spending in the run up to the 2015 general elections would be no easy task, especially given that spending on health and education are being cut. "I have sometimes found it difficult to justify why we are defending the project. But the reason is simple: the Socialists believe that you have to spend to get the economy going. Money has also been spent on installations, so are we now going to set this aside, when what remains to be done is so easy?"

Madrid's organizing committee says that it will cost 2.4 billion euros to complete the infrastructure needed to host the Games, a figure widely dismissed as overly optimistic.

City Hall says that a good part of the costs would be covered by advertising, ticket sales and television rights, leaving the regional and central governments to stump up around 1.6 billion euros.

There was strong initial support from the private sector to help with infrastructure, but this largely failed to materialize, requiring the organizers to look for ever-cheaper solutions. Basketball games will be held in the Ventas bullring, once it is equipped with a temporary roof, while plans to build new hockey and volleyball stadiums have been abandoned, along with two press centers. The most costly project, and one that cannot be avoided, will be the Olympic Village, which is forecast to cost around a billion euros. City Hall says it can muster private investment for that project, although it hasn't said how. The aim is then to turn the accommodation over to the housing market. Other costs are in what might be described as limbo, such as the renovation of the Peineta stadium in the north-eastern outskirts of the city, at an estimated cost of 160 million euros, which soccer team Atlético Madrid is supposed to cover, dependent on the sale of its current ground in the southwest of the city. If that doesn't go through, City Hall and the regional government will have to pay.

Countries that host the Games see a 30-percent increase in foreign trade

And what about Madrid's competitors? Istanbul, bidding for the fifth consecutive time, still lacks much of the required infrastructure (the cost of its project is estimated at 16.8 billion euros). That said, the IOC would like to give the Games to Turkey as a nod to the Islamic world. Tokyo also bid for the 2016 Games; the main obstacles to its hopes are the ongoing costs of the Fukushima nuclear plant, and the fact that South Korea is organizing the 2018 Winter Games. The cost of its project is 4.4 billion euros.

It is impossible to guess which way the IOC will jump on Saturday. This is a rigid, opaque organization where diplomacy, personal influence and arcane rules all count. For example, "a member that is president of the federation of any minor sport can vote for a candidature because the installations dedicated to this sport seem better to them," explains Manuel Cobo, Madrid's former deputy mayor. Around 100 delegates vote, and it is necessary to seek alliances with them ad hoc. It is obviously essential not to be knocked out in the first round, but the winner emerges based on the way the votes of eliminated candidates are distributed.

The work of the Madrid 2020 lobby between now and Saturday, overseen by the tireless Terrence Burns, will be essential to a successful outcome for the capital. That said, there are many factors beyond the Madrid organizing committee's control. Manuel Llanos has nothing but praise for team Madrid, but is worried that the city has slipped off the IOC's radar over the years. "The current team knows what it's doing, but back in 1992 we had heavyweights like IOC president Juan Samaranch on board," he says.

On Saturday September 7, the IOC will sit down before the world's television cameras, and sports fans in Spain, Turkey and Japan will wait with baited breath. Billions of euros of investment will be at stake, as well as the chance to be part of a unique global event. Madrid is staking much of the next decade on a successful outcome, even if nobody is quite sure what that will mean for the city. Be careful what you wish for.

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