Economic Analysis Projects Lower Revenues from Olympics; Mayor Daley Disagrees

By Kevin Robinson in News on Sep 25, 2009 2:00PM

Mayor Daley dismissed an independent analysis of the economic potential of the 2016 Olympic Games on Thursday, first with an ad hominem attack on the state of Michigan, and then with a less-than-nuanced economic retort of his own. The report, which was prepared by the East Lansing, MI-based Anderson Economic Group, shows that the 2016 Summer Games would result in "a net economic impact of more than $4.4 billion," far less than the $19 billion Olympic boosters have projected. "We have individuals coming from Michigan, telling us what to do. Telling us how bad our economy is," Daley said at an event in Pilsen. "We know how bad our economy is, they wish they had the Summer Olympics. I feel sorry for the people in Michigan, in Detroit and all over Michigan."

Anderson set up their study to avoid double counting expenditures, look only at spending in Cook County directly for the Games, and avoid spending that would have happened regardless. The report also concludes that Chicago has the potential to pull it off, assuming that everything in the city's bid book happens according to plan. That includes private financing of the proposed Olympic Village. The report also cautions that Chicago has projected "ambitious" revenue from "substantial" private donations and ticket sales for the event. And therein lies the risk to the city. If revenues fall short (a very real possibility given the current precarious state of the economy) taxpayers will be on the hook to cover the shortfalls, reducing the overall economic impact of the Games on the city.

Nevertheless, Mayor Daley is taking a big picture approach to the economics of the event. "It’s not the three weeks" of games, Daley said. "It's the buildup and the after effect."