AFTER the closing ceremony on Sunday night, the organisers of the Athens Olympics will breathe a sigh of relief at having pulled off a visually rich Games that will have left the capital with a host of world-class sporting venues. But with empty seats continuing to blight some of the blue-riband events such as gymnastics, serious questions are being asked about whether the Athens Organising Committee (Athoc) will even cover its operational costs.
With unoccupied stands, reduced tourist numbers, packed merchandise shelves and nearly half the population away on holiday, there is now the real prospect that Athens will stage the first loss-making Games since Moscow in 1980. The Greek people are already resigned to the fact that they will be paying for the Games for generations to come. Petros Doukas, the Deputy Finance Minister, recently raised his estimate of government spending on infrastructure such as stadiums, roads and a new airport to €7 billion (about £4.7 billion).
Spiralling security costs that reached €1 billion and construction overruns helped to inflate the budget to more than six times the original estimate at the time of the bid in 1997. The cost of the Games will increase Greece’s budget deficit to more than 4 per cent of gross domestic product this year, according to Doukas, breaching the 3 per cent limit set by the European Union for membership of the euro.
It is a case that bears more than a passing resemblance to that of Montreal, the city that this summer will pay the final instalment of a $1.2 billion (about £510 million) debt accrued from hosting the Summer Games in 1976.
Yet a legacy of white elephants was expected when a country of 10.5 million people and an economy struggling to adapt to the rounding-up of prices from a drachma to the nearest euro took on the world’s biggest sporting project. What would come as a shock is if Athoc was not able to break even on the operational side, as every Games have done since Los Angeles turned a $355 million profit in 1984.
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Athens has a budget for the 17-day event of about $2 billion, half of which is given by the IOC from its pot of money generated from the sale of television rights and sponsorship for each four-year cycle. On present ticket sales, it would seem that Athoc will struggle to meet the expectations of Jacques Rogge, the IOC President, who last week said that the Games would break even or make a profit. It is understood that the IOC has received assurances from Athoc that its operational budget is in balance.
Athoc revealed yesterday that it had surpassed its target of 3.4 million ticket sales out of a possible 5.3 million after selling 58,000 on Monday alone. Sales now stand at 3,436,000. “The closer we get to the end of the Games, the more finals are being carried out and most of them are sold out,” Michalis Zacharatos, an Athoc spokesman, said. “We have broken the target we set two years ago and are very happy that the momentum has been kept.”
It looks likely that the Games will be about 75 per cent sold out across the board, dragged down by poorly attended events such as wrestling, the women’s marathon finish, hockey and softball. Sydney, widely considered to be the most successful Olympics staged, achieved a sell-out rate of more than 90 per cent in 2000 on total ticket sales of 9.5 million. Yet it only managed a small operational surplus and the Australian taxpayer is now propping up under-used venues to the tune of £18 million a year. By comparison, with fewer spectators and a dearth of casual souvenir-buyers, Olympic experts are finding it hard to explain how Athens will add up to a profit. The audited accounts will not be available for several months.
“There is a serious risk of this being the first loss-making Olympics since Moscow. It is a logical and reasonable conclusion,” Chris Carroll, a consultant at GEM Group, said. “I don’t think the local economy could ever viably sustain it. Where is the money coming from? It is a step backwards for the IOC, but the good news is that Beijing is ahead. The Chinese will not have any trouble filling stadia.”