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Toughest Olympic Event: Turning a Profit

During this Summer Games, a gifted few will run short bursts at over 25 miles per hour, lift triple their body weight overhead or jump nearly eight feet into the air. But no one will ever be talented enough to calculate a precise financial return on London’s Olympic investment.

pcruciatti /

If someone could do the math, evidence suggests the return would almost surely be negative. That’s OK. Weddings have negative financial returns, too. People still like them.

Mayors should stop pitching the Olympics to voters as a money-maker, and call hosting for what it is: A chance to blow $10 billion to $20 billion on brief joy and a generation of fond memories. That’s less than the cost of a midsize bank bailout or three months of war. I’ll take the high-jumping, thanks.

The main reason for applying to host the games, according to the International Olympics Committee, “lies in the possibilities for economic development and tourism inherent in such an event.”

But think of it: Football would be a lot less profitable if teams had to build new stadiums each season. Olympic hosts do the equivalent, while spending lavishly on security, public transportation and much else. Just putting together a bid for the games cost London $14 million.

The cost/benefit projections of Olympic hosts tend toward the creative. Many label the cost of construction as a beneficial “economic impact” that will multiply into future revenues. The current tenants of Beijing’s $480 million “bird’s nest” arena – if there were any — might point out the flaws in that approach.

True, Olympic host countries tend to enjoy a burst of economic growth after the games are done, but be careful telling cause from effect. Prospering countries are more likely than others to bid, after all.

A 2009 study by researchers at U.C. Berkeley and the Federal Reserve found that countries that lose a bid to host grow just as nicely as those that win. A 2010 study compared bid winners with losers and found “no long-term impacts of hosting” on economic growth or trade.

One of the authors of that study, Scott Holladay, an economist at the University of Tennessee, says that London will lose money on its investment, but not nearly as much as Beijing. Hosts that lose the least are generally those that already have much of the infrastructure in place, he says.

Los Angeles is widely believed to have turned a small profit in the 1984 games, but crucially, it was the only bidder for that year’s games. That helped it avoid what Mr. Holladay calls the downfall of most hosts: the “winner’s curse,” or the tendency of auctions to be won by those who pay too much.

The math doesn’t look good for Rio de Janeiro in 2016. Its winning bid came with a $14 billion plan that nearly totalled the sum of spending for the three competing bids. That’s $700 per taxpayer, or close to a month’s salary for an average worker. Rio’s best hope for containing costs may be in learning from some new building tactics used in London, including the use of temporary structures that can be downscaled or relocated after the games.

Mr. Holladay says the bidding process has become an arms race, and developing nations are increasingly using the games to showcase their arrival as economic powers, even though these countries are likely to see the largest financial losses as hosts. “We’ll see more Beijings and fewer L.A.s in terms of returns,” he says.

That would be a shame. In mixing in more developing nations as hosts, the International Olympic Committee should emphasize thrift, not extravagance, when reviewing bids. Hosting isn’t profitable, but it needn’t be squanderous, either.


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      New Watch for Those Who Want to Get Their Geek On. ThinkGeek Offering “4-Bit Binary” Timepiece from Cadence Watch – PR11329262
      New Watch for Those Who Want to Get Their Geek On | PRLog
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      New Watch for Those Who Want to Get Their Geek On
      ThinkGeek Offering “4-Bit Binary” Timepiece from Cadence Watch
      GA_googleAddAdSenseSlotAttr(“NewsArticles_ATF_Center_250x250″, “google_ad_channel”, “1297855608+9180177527+7072525493+5604959996+1066703870+6863560615″);GA_googleFillSlot(“NewsArticles_ATF_Center_250x250″); 4-Bit Binary Watch from The Cadence Watch CompanyPRLog (Press Release) – Feb 24, 2011 – PHILADELPHIA – ThinkGeek, the online repository for all things geek, is now selling the new 4-Bit Binary Watch from The Cadence Watch Company. The ultimate insider’s watch for computer nerds and others with a fashionably high tech IQ, the 4-Bit Binary Watch features numerals displayed as binary notations. Confusing? Not really, if you’ve ever told time with an analog wristwatch, but the 4-Bit Binary Watch makes a clear statement about who you are.ThinkGeek is known for its eclectic assortment of novelty items, pop culture- and science fiction-inspired gadgets, apparel and other must-have gear for those passionate about technology. It is offering the 4-Bit Binary Watch for $79.99.“ThinkGeek goes right to the target customer for the 4-Bit Binary Watch, but you don’t necessarily have to be a geek to wear it since it’s a classy looking timepiece in its own right,” says Vanya Buvac, president of Cadence Watch. “It just happens to have binary icons in place of digits, and that’s something that ThinkGeek’s customers will surely appreciate.”Functional, clean and sophisticated, the 4-Bit Binary Watch goes as well with a sport coat and tie as a t-shirt and pair of ripped jeans. Its 35mm face, wrapped in a stainless steel housing, is complemented by a saddle-stitched black leather wristband. Its battery movement never requires winding.About ThinkGeekThinkGeek is the premier retailer for the global geek community. A wholly owned subsidiary of Geeknet, Inc., ThinkGeek was founded in 1999 to serve the distinct needs and interests of technology professionals and enthusiasts. Today, ThinkGeek has grown to become the first choice for innovative and imaginative gifts that appeal to the geek in everyone. For more information, visit or call 1-888-GEEKSTUFF.About The Cadence Watch CompanyThe Cadence Watch Company designs, produces and distributes branded performance and lifestyle watches. The company started in 2001 by making a patented stroke rate monitor for rowing. Cadence’s Oarsman precision chronographs represent a performance lifestyle inspired by the rowing heritage. In 2009 Cadence started it’s Cadence Collective program that empowers designers to create unique watches. Cadence watches have been featured in prominent design and gadget outlets including CrunchGear, Thrillist, Mocoloco, YankoDesign, TreeHugger, CoolMaterial, Fashionably Geek, and many others. For more information and to order the 4-Bit Binary Watch, visit TO EDITORS: For a high-resolution image of the 4-Bit Binary Watch, go to # #Swordfish Communications is a full-service public relations agency. We specialize in getting our clients messages out to their target audiences through the strategic use of media relations, social networking and corporate social— End —
      Contact Email: *** Source:The Cadence Watch CompanyPhone:856-767-7772Fax:866-801-7772Address:3623 Avalon DriveZip:08043City/Town:VoorheesState/Province:New JerseyCountry:United StatesIndustry:Electronics, Fashion, JewelryTags:wristwatch, geek, computer, thinkgeek, binary, watch, cadence, accessories, Fashion, timepiece, 4-bit, nerd, Issuers of the press releases are solely responsible for the content of their press releases. PRLog can’t be held liable for the content posted by others. Report AbuseLatest Press Releases By “Swordfish Communications”San Francisco’s McRoskey Mattress Company Promotes Two Employees
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    • I’ll get right on that It’s not raining right now so they both went out for a potty visit. They didn’t like it much, but they went. Watching Max come thrguoh the door is quite something. He sticks his front paws though and then sort of heaves himself over and thrguoh. It’s a big step for a still little guy!

    • this is a good article, when were in a time when high bankrollers have bankrupted municipalities with derivatives- how do they see spending 20 billion for a two week thrill?

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