As Oslo warms up for this week’s opening of the FIS Nordic World Ski Championships (Ski-VM 2011), criticism and conflicts over the event are giving way to unabashed boosterism. Debate continues, however, over the massive investment in the 12-day skiing competition, most of it arguably at taxpayer expense.
The actual burden on Oslo taxpayers has itself been fueling the debate once again. Steinar Juel, chief economist for Nordea Markets, wrote a column earlier this month in business newspaper Dagens Næringsliv (DN) in which he pointed out that most large sports events like Ski-VM leave their hosts with heavy losses. Costs are almost always underestimated, Juel noted, while hoped-for economic gains are over-estimated.
Juel pointed out how civic boosters of lavish sporting events often resort to highlighting alleged gains from international attention (for tourism, for example) when they can’t get their accounts to balance. Oslo’s city officials and sports bureaucrats have been doing exactly that, claiming that the city will benefit greatly from its less than two weeks in the Nordic skiing and ski-jumping spotlight.
Juel begs to differ. “History is full of examples that the arrangers of a World Championship or Olympics end up sitting with over-dimensioned arenas and costly facilities built for narrow branches of sport,” he wrote. Not many people actually hurl themselves off ski jumps, for example.
It was the massive cost overruns tied to Oslo’s new Holmenkollen Ski Jump that really set off debate when they emerged two years ago. The jump, initially thought to cost less than NOK 500 million, ended up costing NOK 1.8 billion (USD 300 million) and the scandal cost the city politician in charge her job. Juel pointed out that the final, official cost overrun of NOK 600 million alone “could have provided the full rehabilitation of three to four Oslo schools,” many of which are badly in need of repair.
Construction of the new Holmenkollen Ski Jump and the smaller, “normal” ski jump at Midtstuen were required in order for Oslo to apply for the games. Juel thus argues their capital costs must be included in the organizers’ accounts for Ski-VM 2011, if they’re to be honest about the event’s financial impact on Oslo.
Another analyst, Tore Aarønæs of Norsk Telecom, goes even further. He claims the capital costs of improving the public transit line from Oslo’s downtown up to Holmenkollen should also be included, along with improvements to roads and other infrastructure. “Dizzying amounts” of taxpayer money have been used to host Ski-VM 2011, he said, with the city of Oslo carrying most of the burden.
Reaction to Juel’s column was swift. Organizers defended themselves, claiming the championships will be “self-financed” and “won’t cost the taxpayers a single krone.” Åsmund Berge, a board member of Ski-VM 2011, wrote in a rebuttal to Juel’s column that the World Championships hasn’t amounted to sløseri (a huge waste of taxpayer money). The actual event’s budget of NOK 150 million will be balanced, he insisted.
Berge argued that Ski-VM 2011 will break even on operations, if not log a “handsome profit.” Ticket sales — which, at NOK 300-800 each (USD 50-133 each), have been called expensive even by some ski jumpers — will provide adequate revenues to cover costs, and even hot dog sales will be profitable. “We got to borrow hot-dog stands for free,” Berge wrote in DN.
But Aarønæs and Juel both note that Berge conveniently leaves out the capital costs involved in mounting the World Championships, costs which must be included to give a true picture of the investment involved. “I can gladly see Norway host major sports events, but let’s be honest about the costs and income from Day One,” responded Juel.
Meanwhile, thousands of tickets remained unsold just days before the opening ceremonies on Wednesday. Sales picked up earlier this month, but only 200,000 of 300,000 available tickets were sold two weeks before the opening. Organizers resorted to giving away some blocks of seats to ensure an audience at some events, but claimed they were “very satisfied” with sales and could break even with 200,000 tickets sold.
Others worried that the days of the much-hyped folkefest (public festival — a term Norwegians frequently use to describe major events) are over. Only 4 percent of 800 persons questioned in a public opinion poll conducted for newspaper Aften said they’d actually be attending any Ski-VM 2011 events, and 38 percent said they weren’t interested.
And while Oslo Mayor Fabian Stang still believes the event will lure more tourists and business to the city, economics professor Harry Arne Solberg at the College of Sør-Trøndelag said a Nordic World Championship “isn’t big enough.” Solberg thinks the politicians who agreed to invest more than NOK 2 billion in projects that enabled the city to host Ski-VM should realize they’re funding a 12-day special event and not expect much more. They must live with the priorities they made, that providing funding for Ski-VM had a higher priority than schools, nursing homes or other public projects.
The thousands who have bought tickets and will make the trek up to the hills above Oslo will likely enjoy themselves, and the city will be offering several other events during the Ski-VM period, from concerts to exhibits and public art displays. Local newspapers are now full of mostly non-critical articles about the upcoming event, and Norwegian Broadcasting (NRK) has been running promotions for weeks. Thousands are, after all, expected to simply stay home and watch some of it on TV.
For program and other practical information about Ski-VM 2011, click here. (external link)