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The Olympics are again broken, cursed by economic fallacies relating to crowding out, shortsightedness, and the winner’s curse. Yet given the global demand for Olympic viewing, a new kind of corporate politics may provide the answer, albeit an unpopular one.

The growing revelation that bringing the Olympic torch to town ignites skyrocketing public costs in exchange for a two-week circus is not new. The 1984 Games of the XXIII Olympiad—the most financially successful Olympics ever—went to Los Angeles because literally no one else wanted them. Tehran, the only other city in the world to even bid for those games, withdrew from consideration.

How could such lackluster interest produce the most successful Olympics ever? Precisely because the city appreciated the economics of public finance, had substantial existing facilities, and did not fudge the numbers in order to win the bid.

Generally, crowding out refers to the propensity for government spending—particularly tax dollars and loans—to replace, rather than supplement, private spending. A government collects $1 and puts on the Olympics, returning $2 in revenue. Terrific! Except that $1 is no longer available to the private sector, where it may have returned $3 or even $4. Study after economic study suggests that the Olympics induce crowding out. In 1984, however, Los Angeles privately funded the games. By now the six words seem as natural as the five rings, but Los Angeles only introduced them 31 years ago: “Official sponsor of the Olympic Games”.

Additionally, Los Angeles refrained from building even one new facility to host. The monstrous, newfangled venues of today are magnificent for two weeks (if they are finished), then rendered useless tracts of concrete. NFL stadiums are used a minimum of 10 times a year, for decades, and those built since 2004 have cost about $900 million each in 2014 US Dollars. Yet recent Olympic Stadiums have cost roughly $500 million, despite being doomed to hit full capacity a scant 16 times, if that. By modestly upgrading existing facilities, Los Angeles organizers did not overreach, nor overvalue the present.

Lastly, consider the winner’s curse, the economic idea that the winner in an auction likely overpays, being by definition willing to pay more than any other bidder. Seoul, Barcelona, Atlanta, Sydney, Athens, Beijing, etc…did these cities truly stand to gain more from hosting the Olympics than those they outbid? Economist Evan Osborne notes: “When multiple cities bid, each has a different view of what the revenues will be, and the one with the brightest economic forecast usually wins.” When the torch leaves and the foolish forecast fails, cities are left footing the bill. Los Angeles’ relatively unenthusiastic acceptance of the 1984 games put the city in position to embrace the economic realities from Day 1—and chase corporate dollars accordingly—rather than delude themselves with fictional returns and false hopes for the best.

Los Angeles was different. And so must the next host city be to succeed. The next games must disrupt the status quo. This may mean pushing to larger, established cities with infrastructure in place. This may mean hunting for more sponsors and offering more advertising. Perhaps that seems against the Olympic spirit, but it seems the only way to keep the games viable. As Boston’s reluctance shows, the current system is broken. A change is gonna’ come.

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Yesterday, Norwegian Ole Einar Bjørndalen became the most decorated winter Olympian in history, winning his eighth gold medal in the mixed relay, a new Olympic event in the biathlon. He now stands alone atop the list of individual success…in the winter. American Michael Phelps still towers over Olympians at large; why, Phelps won eight gold medals in the Beijing games alone. Who has the most impressive individual Olympic performance: Bjørndalen or Phelps?

Ole Einar Bjørndalen

In the north, one learns to never f%&$ with someone who can both out-ski and out-shoot you.

Michael Fred Phelps II

Whereas further south people are like “Skiing…on the water?”

Individual Medal Count

For both athletes, there is their individual medal count, and then their individual-medal count. Bjørndalen won eight golds, four silvers, and one bronze; his golds tie for the most and his total medals are the most of any winter Olympian. Phelps won 18 golds (freak), two silvers, and two bronze; his 18 golds are the most of any Olympian by far (next closest is nine from Soviet gymnast Larisa Latynina), and his 22 total medals are the most by four (also ahead of Latynina).

But then, many of those medals came in relays and team events. Group medals should not be forgotten, but they go beyond the control of one person, even if that one person is Michael Phelps. Remember this?

In purely individual events, Phelps has 11 Olympic golds (second-most is 8 from American Ray Ewry in the early 1900s), one silver, and one bronze; his 13 total rank second-most (yes, behind Latynina). Bjørndalen has five individual golds, tied for 11th-most of all Olympians, and tied for 2nd among winter Olympians. With three silvers and one bronze, his nine individual medals rank tied for 5th among all Olympians, tied for 2nd among winter Olympians (with his countryman Bjørn Dæhlie; it pays to be Bjørn).

Competition

Inspired by Tuesday’s “What If?” XKCD, Fermi estimation will guide this segment. Fifty-one nations have won 1,561 medals in Olympic swimming, beginning with the first summer Olympics in 1900. Twenty-one nations have won 190 medals in Olympic biathlon, beginning with the official introduction of the event in 1960. Curiously, in the most recent Olympics, about 40 men contested both the 100 meter swim and the 20K individual biathlon. Forgetting differences between men and women, changes over time, etc, on average assume a biathlon and a swimming event have 40 competitors at the Olympic level.

How about the competition in getting to the Olympics? Both sports certainly require gear, facilities, and exposure inaccessible to most throughout the world. Likely there are more aspiring swimmers than biathletes in the United States, though perhaps not in Norway.1 Worldwide, perhaps twice as many people try to compete in swimming than biathlon, per country, on average. And say one percent of all competitors make it to the Olympics. (Likely it is much less, but no matter.)

Roughly, that is 51 swimming countries times 11 individual events Phelps won times 40 Olympic competitors per event times 100 for non-Olympic competitors times two for swimming =

51 * 11 * 40 * 100 * 2 = 4 million competitors (with double counting due to crossover between different events) whom Phelps bested in his 11 individual gold medals.

For overall medals (51 * 13 * 40 * 100 * 2), Phelps’ competition pool was maybe 5 million competitors.

For Bjørndalen, his “golden” competitors total some 0.4 million and his total competitors total roughly 0.8 million. Even dropping the “swimming is twice as popular” assumption, Phelps’ competition would seemingly still be double Bjørndalen’s.

Timing

Phelps participated in the Sydney 2000 games, before winning medals in Athens 2004, Beijing 2008, and London 2012, after which he retired from Olympic competition. Bjørndalen participated in the Lillehammer 1994 games, before winning medals in Nagano 1998, Salt Lake City 2002, Turin 2006, Vancouver 2010, and Sochi 2014 (whew!). Bjørndalen won Olympic medals, indeed Olympic golds, for a period eight years longer than Phelps did. Biathletes and swimmers age differently, but Bjørndalen still fended off progressively younger challengers through his 40th birthday.

Is that unusual? Of the 20 Olympians who have eight or more medals in individual events, only 4 (including Bjørndalen) did so over more than eight years. Bjørndalen is the only one of those individuals to win medals (and gold medals) 16 years apart. This cuts both ways; he had more Olympics to win medals in, but he also kept performing at an elite level for sixteen years.

And as they come to the finish, it is…

Michael Phelps, by a nose! Or one one-hundredth of a second, whatever.

Ultimately, Phelps’ dominance–11 individual gold medals–over millions of swimmers around the world for eight whole years is too extreme to ignore. Bjørndalen will always be attached to the modifier: winter Olympian. Being Norwegian, he is probably okay with it.


  1. Norway has one silver and one bronze in 100+ years of Olympic swimming. Norway has 12 golds, 18 silvers, and 9 bronze in 54 years of Olympic biathlon. 

Real quick, let us all remember three things that have happened in hockey, real or fictional.

First, this:

shot hits goalpost

Up 2-1 with less than two minutes left, Team USA’s clear to the empty net hits the post. Canada would score seconds later, and win 3-2 in OT.

Second, this:

The Mighty Ducks, starring Emilio Estevez & Joshua Jackson

It was, Charlie! It was so cool.

And lastly, remember this:

The United States and Canadian houses in Olympic village play an impromptu pickup game in a parking lot. They tied 4-4.

And read Katie Baker’s short, beautiful piece on Grantland about this absolute gem of a game. The game pictured above is why we play hockey, why we play sports, why we have Olympics. Not to have gold medals. (Though yeah, gold medals are nice.) To “have fun out there” does not even do it justice. “Teamwork”, “chemistry”, “bettering yourself”, and “friendship” might not do it justice either. But the moment itself does.

We should not tell the American women who lost today to be happy with their silver medals (though it is fine if they are). They practiced hockey for years, they played the game, their emotions–whatever they are–are legitimate. (Duh.) In fact I fully support Team USA in stabbing with their skates anyone who tells them to “just get over it” because “it’s just a game” or “you still got silver” or whatever. F@#$ those people

As a civilization of human beings, we have progressed from arguing whether it is okay for girls and women to play hockey to arguing whether cheering “Let’s go girls!” at a women’s hockey game is inappropriate and sexist.1 Which is cool, but still kinda missing the point.

NBC analyst and former USA Hockey player (and gold medalist in 1998) Natalie Darwitz remarked after the loss that it was a great game of and for hockey, not just “women’s hockey”. And she is totally right. It was a great game, a great championship. Someone had to lose. Unfortunately, yet again it was the United States. But God it was so cool. Let us all remember, and be proud, of that.


  1. Man [addressing hockey team of male adults]: “Alright, let’s go boys! Defense!” Woman: “Cool.”
    Man [addressing hockey team of female adults]: “Alright, let’s go girls! Defense!” Woman: “HOW CAN YOU BE SO SEXIST AND DEMEANING? THEY ARE INDEPENDENT WOMEN, NOT HELPLESS GIRLS, OKAY?” Man: “I, uhh…neither said nor implied nor thought that. (Thanks for projecting your gender stereotypes of men onto me!)” 
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