That's not million. It's actually billion, with a " b," as in boy-oh-boy.
It's possible the Olympics boosters didn't bring it up because they didn't want people to fret. But the International Olympic Committee appears to be quite firm about it.
The committee members thought Atlanta, home of the low-budget, scrape-by "Kmart Olympics," pulled the wool over their eyes, and they have made up their minds that the host city for the 2012 Summer Olympics will have to sign on the dotted line.
New IOC policy mandates that the host city must guarantee the entire budget for the event--$1.8 billion for the 1996 Atlanta event and rising. And they mean they want a promise that a government entity with bonding authority will pledge its full faith and credit to make up any shortfall in the amount of money the host city's private Olympics committee promises to raise.
"Atlanta did a fair amount of smoke and mirrors," says Dick Pound, a Toronto lawyer who is a vice president of the IOC and a member of its coordinating committee. "They said, 'Not only is the great city of Atlanta behind it, but so is the great state of Georgia, with the power but not the obligation to issue bonds.' Some of my colleagues who were a tad naive believed them."
Since '96, the IOC has adopted new rules: The host city and its regional government must sign a contract obligating themselves to do something--sell bonds, raise taxes, whatever it takes--to make sure all of the Olympic budget is in hand on time.
And that doesn't mean, "I will gladly pay you Tuesday for a hamburger today." The IOC didn't like the deal in Atlanta, even though Atlanta eventually brought in the money it promised, because too much of the budget was on the come.
Atlanta, like Dallas, had serious venue problems. It had to build and expand several major stadiums. The IOC didn't like the fact that so little cash was left after construction and before the opening ceremonies.
"They put $500 million in the ground," Pound said. "They had to spend their profit before they earned their nut."
The IOC seems serious about its demand for a hard and fast pledge of tax money to make up the budget--serious enough that a refusal to give the guarantee may influence the United States Olympic Committee's choice for who will be the American candidate city.
Mike Moran, spokesman for the USOC in Colorado Springs, says, "The IOC has made it very clear to us that, from now on, the candidate city will have to bring with it a guarantee of cash for any shortfall, through some combination of state and local government indemnity."
However, the likelihood of a permanent shortfall in a host city's Olympics budget is not great, according to Moran. "The books will be closed at the end of this month on Atlanta, and we are expecting $10 to $15 million (as the USOC's share of the profit)," Moran says.
But a guarantee does mean that a city's credit may be seriously tied up until the books are closed several years after the event. This and other considerations prompted the Seattle Times to editorialize against that city's Olympic bid two weeks ago.
The newspaper obviously resented the way local boosters had glossed over the negatives in an attempt to stampede the city in their favor. Its editorial said, "It's typical strategy for these events: Charge full speed ahead, win converts along the way. But why? This community doesn't need the Olympics. In the past the summer games might have been viewed as a pivot point that would put Seattle on the map, or, as the promoters love to say, turn Seattle into an international city.
"These tired old lines don't work anymore. Seattle is on the map; it is an international city. More important, this region doesn't need a gigantic production like the summer Olympics to overwhelm the agenda the next 14 years."
The estimated $3 billion that the Olympics may cost in 2012 is eerily close to the $3.2 billion burden in deferred basic maintenance--potholes, sewers, curbs, boring things--that the city of Dallas now carries.
Mayor Ron Kirk said in his August 5 "State of the City" speech that these basic needs would be his and the city's primary focus in the next two years. His resolve to swear off big-glitz projects apparently lasted less than a month, until the Dallas Citizens Council, a private club of business leaders, told him it wanted Dallas to go for the Olympics.
The Citizens Council has said it will raise all of the $3 million to $5 million it estimates an Olympic bid will cost. But there are some serious questions about whether Dallas can hope to win the bid, several of which turn on factors the city can do little about.
Jere Longman, who covers the Olympics for The New York Times, says it may not be any American city's turn in 2012. "If Toronto gets the 2008 Olympics," Longman says, "it's unlikely another North American city will get it in 2012. China will bid, and they will be in line for one."
There are other things American cities have going for them, no matter what the rotation. "The U.S. is about the only country that can afford the Olympics," Longman says, "except for totalitarian countries."
But if the Olympics were to come to North America in 2012, and if they were to come to Texas, Longman says, people have the impression Houston has the more serious bid.
"They've been in it longer, and they're much more aggressive."
John Williams, who covers the Olympics for the Houston Chronicle, thinks the Houston bid may not be as strong as it appears.
"The mayor and the county judge are pushing it," Williams says, "but the business community is very tepid. These companies are still fighting their way back from the oil bust. They're doing well now, but they feel like they have better things to do with their time in the years ahead than pour everything into the Olympics."
There are lots of other public concerns that the mayor and his handlers at the Dallas Citizens Council are glossing over in their haste for Olympic glory:
Dallas is beginning to have a near glut of new stadiums and arenas, but the one thing it does not have is a stadium big enough for the opening and closing Olympic ceremonies, to say nothing of the 400-meter track that must fit onto its field. Kirk surprised people last week by announcing a sudden freeze on plans to rebuild and dome the Cotton Bowl. Clearly the Olympics boosters have their eyes on the Cotton Bowl as a possible site for the main Olympics venue.
That means the centerpiece of current plans to rebuild the Cotton Bowl--its dome--is in trouble. There is serious doubt the IOC would allow track and field events to be held indoors for the first time in history.
"Would that mean that all of the world records would be affected?" Longman asked. "That would be an interesting issue."
Part of the pitch for the Olympics will be that Dallas will get even more new sports venues out of it. But there is a serious question of just how many more new stadiums supported by luxury corporate suites Dallas could support after the Olympics are over.
Dallas has already been identified as one of nine U.S. markets, including Detroit and Tampa-St. Petersburg, with more sports suites available than there are takers. What that means, according to financial analysts, is that the values of all of the stadiums in town are already decreased. If the stadiums depend on the suites for profit, and if they can't rent what they've got, they're worth less. So why build more?
There is also the question of what would become of the Cotton Bowl after the Olympics if it were to be the main Olympic venue.
Moran, spokesman for the U.S. committee, says the IOC was not at all pleased when Atlanta turned around after the games and gave away its new stadium to the football team. He hints the U.S. committee probably won't choose a city that isn't willing to dedicate its stadium to ongoing Olympic purposes after the games, as a training center or site for other sub-Olympic games.
"One of the principal criteria in choosing the American candidate city," Moran says, "will be legacy. What are you leaving the Olympic movement?"
Another basic question the mayor and the Citizens Council and even the Morning News might want to share at some point with the public is the very troubling issue of who will make money on the next Olympics--the host city or the IOC?
Professor Mark S. Rosentraub of Indiana University, author of Major League Losers: The Real Costs of Sports and Who's Paying for It, says host cities of the future will have a much tougher deal to cut for themselves. If Dallas has to shell out serious money in construction for new venues and the reworking of existing venues, Rosentraub says, Dallas could have a hard time getting out of the Olympics in the black.
"If a city cannot capture the advertising income [corporate sponsorships]," Rosentraub says, "it is very hard to earn enough dollars to repay oneself.
"The issue turns on the division of dollars between the host city and the IOC. If one can do as well as Atlanta--'never again' is the IOC's chant--then the deal works. If the IOC takes the dollars, it could be real hard for Dallas to win, given what you are outlining in new construction costs."
Then again, maybe the mayor and the Morning News and the Olympics boosters are right: Perhaps it is better for the public not to trouble its pretty head with these matters.
