Thursday 8 April 2010

More Sport and Economics

Getting back to Economics while still on blogging on sport, I heard Keith Quinn on Radio Sport yesterday, castigating the government for its refusal to commit $600m to underwrite a bid from Auckland to host the 2018 Commonwealth Games. At the same time that I think that $600m to host the Games would be a scandalous waste of taxpayers’ money, I have a tinge of sadness mixed with nostalgia that the Games are unlikely to return to New Zealand any time soon.

The nostalgia comes from the 1974 Games in Christchurch. As an 11-year old, I got to be one of the kids running on to the athletics field in the opening ceremony dressed in coloured plastic to form a human version of the games symbol. And the following day on the first day of competition, I was selling programmes at QEII park, and got the opportunity later in the day to sit in one of the numerous unsold prime, near-the-finish-line seats and watch Dick Taylor’s incredible gold-medal race in the 10,000 metres.

So I am wondering, if we could host the Games in 1974 even with prime seats left over for programme-selling squatters, and less competition for broadcasting rights, why can we not today. Did the government spend the equivalent of $600m back then (in which case, I promptly lose my nostalgia), or has the cost of hosting the Games spiralled out of control? If the latter, what costs so much now that did not back then?


  1. According to the CHCH Press in an article on 31 July 2007 (when the CHCH City Council were thinking of bidding for the games) Commonwealth games costs were:
    1974 Christchurch $ 8.5m
    1990 Auckland $100m
    2002 Manchester $830m
    2006 Melbourne $2.3bn
    So the average annual percentage increase in costs looks like
    1974-1990 67%
    1990-2002 61%
    2002-2006 44%
    However, these are of course nominal values and removing the effect of inflation changes the annual average cost increases to
    1974-1990 5%
    1990-2002 46%
    2002-2006 37%
    So up until 1990 (at least) Commonwealth games were probably quite cheap.
    In fact, the cost of hosting as a percentage of NZ's GDP are
    1974 Christchurch 0.09%
    1990 Auckland 0.14%
    2002 Manchester 0.66%
    2006 Melbourne 1.44%
    On this measure, Commonwealth Games are around 16 times more expensive now than when CHCH hosted in 1974.
    What costs so much now? Security has to be one thing. I remember standing outside the games village in Ilam and getting autographs as athletes were dropped off at the gate! I'm picking more elaborate venues is another.

  2. I'd be willing to pay $100 for the Commonwealth Games not to be in Christchurch, plus whatever the taxes would be. So if hosting the games cost me as taxpayer $200, I'd pay $300 to keep them elsewhere. They're a public bad. The roads get congested, I lose the option value of using the pool, other facilities are crowded, and the bloody lunchroom turns from talk of economics to sports.

    If it were the Olympics, I'd up my bid a fair bit. Did you see what they did to Vancouver? Mini police state while the games were on.

  3. Personally, I couldn't care less if we never hosted another Commonwealth games. I find myself agreeing once again with many of Eric's points (we must stop this!) although living out in the wops as I do I don't think I'd be prepared to shell out $100 to prevent it from happening, the relative inconvenience is just that much less for me. I would, however, encourage hosting of a cricket world cup at some stage, it is about the only sport I am a bit nuts about :)
    Unfortunately any major international event these days is likely to result in the host nation/region becoming a mini police state. Perhaps it wouldn't be too inaccurate to suggest that the "terrorists" have already won...