By Steve Lewis.

This is an abridged version of a feature that was first published in the February 2015 issue of Acuity magazine.

It might be the most expensive white elephant in history.

Ten years after the “modern” Olympics returned to Athens, many of the venues that bore witness to feats of sporting prowess now lie abandoned and decaying.

As Greece stumbles through its sixth year of negative economic growth, stadiums that hosted cheering crowds for beach volleyball, canoeing, swimming and diving are overgrown with weeds and dilapidated.

As Australia and New Zealand prepare to host the 2015 Cricket World Cup, the high-cost legacy of the Athens Olympics is a salient lesson for those who believe such mega events will generate endless riches and transform nations for the better.

The euphoria that greeted the decision to return the Olympics to its spiritual birthplace has been replaced by the sullen reality that Greece has little to show for its US$13b investment.

Greece's catastrophic fall from grace

Like so many mega sporting events, the Athens Games were designed to kick-start the nation’s economy, showcasing Greece’s rich history to eager foreign tourists. But many in Greece claim the massive public investment instead contributed to the European nation’s subsequent fall from economic grace.

Athens is hardly alone in the pantheon of great cities that have fallen foul of hucksters who claim that hosting the Olympics and other tournaments (such as the FIFA World Cup) will deliver a lasting and positive legacy.

Thirty years after the winter Olympics were held in Sarajevo, the capital of Bosnia-Herzegovina has little to show for its investment but the empty, crumbling ruins of long-abandoned ski runs.

Of course the former Yugoslavian capital went through a terrible war ten years after the event and, in a horrible twist, the podium where medals were presented was later a site used to execute captured prisoners.

Another city that paid an exorbitant price for chasing Olympic glory is Montreal, where costs for the 1976 event blew out by a staggering 1,250%.  So badly were the city’s finances depleted that a “temporary” tobacco tax was only scrapped in 2006, 30 years after the Olympic flame was extinguished at Montreal’s famous “Big O” stadium.

While sports-mad Australians and New Zealanders rejoice when their sporting teams and elite athletes conquer on the world stage, there are growing concerns that the costs of staging such mega events are beyond most nations’ capacity.

Oxford University academics Bent Flyvbjerg and Allison Stewart claim that the Olympic Games stand out in two distinct ways compared to other mega projects.

“The Games overrun with 100% consistency. No other type of mega project is this consistent regarding cost overrun,” Flyvbjerg and Stewart wrote, in their 2012 study, Olympic Proportions: Cost and Cost Over-run at the Olympics 1960-2012.

Athens experienced a budget blowout of 97% while the 2012 London Olympics experienced a doubling of its projected budget. Sports-related investment clocked in at a cool US$15b, making London one of the most expensive Games ever.

Games dividend

Some claim, you cannot measure the Games “dividend” in economic terms alone. What about the upswing in sports participation, for instance?

Well, if the most recent Olympics are any guide, the “inspire a generation” rhetoric failed to resonate with England’s youth. Indeed, official figures released by Sport England showed regular participation in sport among 16-25 year olds actually declined by 53,000, to 3.74 million, in the year after the London Games.

Most of the venues built or refurbished for London are heavily booked and much of the infrastructure has been put to good use, in part because London’s team of planners learnt from the lessons of the 2000 Sydney Olympics.

In stark contrast to Athens, the Sydney Olympics showed that good planning and shrewd investment can pay handsome dividends. Indeed, the former Olympic precinct – located some 20kms to the west of Sydney’s harbourside CBD – is positively booming 14 years after the Games flame was extinguished.

In 1993, KPMG forecast that the Olympics would add A$7.3b to the Australian economy and create 156,000 new jobs.

But it is worth noting that the Sydney Olympics – declared the “best ever” by then IOC supremo Juan Antonio Samaranch – initially failed to deliver on many of the promised flow-on benefits.

In 1993, KPMG forecast that the Olympics would add A$7.3b to the Australian economy and create 156,000 new jobs. But, instead of acting as economic viagra, the Games actually had a negative impact.

The most comprehensive study of the Sydney Olympics, conducted by the Centre of Policy Studies at Monash University, estimated the 2000 event actually reduced Australian household consumption by A$2.1b.

As the authors – John Madden and James Giesecke – explain, it was assumed that the A$6.6b in Games expenditure would “stimulate the labour market” and lead to lower unemployment.  But the Games occurred during a period of low unemployment “meaning that Olympics activities – the venue construction, event organisation and sports tourism – merely acted to displace unemployment in other economic activities, instead of boosting employment”.

The equally bullish forecasts of stronger growth in tourist numbers, lured by alluring snaps of Australia’s pristine coastline, also never eventuated. In fact, the number of foreign tourists actually declined after the Games’ torch was extinguished. Of course Australia was impacted by a series of extraordinary events in the year after including the 9/11 terrorist attacks in the US and the collapse of Ansett.

Despite these dismal figures the planners of Sydney 2000 can take great pride in how the Olympics has transformed the precinct that includes the main stadium, the aquatic centre, the athletes village and other key stadiums.

Olympic precinct plumps up local economy

Fourteen years on, the Olympic precinct is booming and more than A$1.5b has been invested since the Games ended on 1 October 2000.

Former Sydney Olympic Park Authority (SOPA) chief executive Alan Marsh uses a peculiar caffeine metric to help back up his assertion that the Olympics’ precinct is going from strength to strength.

“In 2001 you were battling to find one or two places to buy coffee. Now there are about 30,” Marsh says.

SOPA, formed in 2001 after the Sydney Olympic Construction Authority was wound up, now manages around 600 hectares of land including the various sporting venues and one of Australia’s largest urban parklands.

Marsh claims the Olympics were the “catalyst for a lot of growth” and the SOPA 2030 Masterplan shows there is much more to come. There are plans for 1.4 million square metres of new construction catering for a daily population of 50,000, more than 30,000 jobs and around 6,000 new dwellings to house approximately 14,000 residents.

“There’s a massive amount of development happening within the park and around the park,” says Marsh.

In stark contrast to the ruinous stadiums of Athens, Sydney’s venues continue to attract strong crowds, whether for rock and pop concerts, sporting contests or the annual Royal Easter Show – which attracts some 30,000 tourists from Asia and pumps around A$500 million into the local economy.

Steve Lewis is an author, journalist and senior adviser with Newgate Communications.

This is an abridged version of a feature that was first published in the February 2015 issue of Acuity magazine.