The Disastrous 1976 Montreal Olympics Should Have Taught Host Cities a Valuable Lesson

This summer marks the 40-year anniversary of the Montreal Olympics, but also the same anniversary of one of the most oft-quoted statements by a political leader to sum up the hubris of Olympic host cities.

"The Olympics can no more run a deficit than a man can have a baby," said then-mayor Jean Drapeau before the Olympics began in 1976. How wrong he was. The Montreal Olympics became the poster-child for cost overrun, white elephant stadiums and logistical nightmares.

With the Rio Olympics here, it's important to look back at Montreal to see what cautionary tale it can offer to future host cities, their taxpayers and the politicos who gleefully welcome this albatross of a sports event to their communities.

"Montreal put us on a path of Etch-a-Sketch economics that has been the norm for the Olympics ever since," said Jules Boykoff, author of Celebration Capitalism and the Olympic Games. Boykoff is referring to the $2.5 billion cost of running the Montreal Games, coming in a staggering 13 times the original estimate. The financial burden was born of incompetence, inflation, fraud, kickbacks, terrible weather, security concerns and militant unions.

As one example of the warp-speed spending, look at Olympic Stadium. Initial projections pegged the cost at $106 million. It ended up costing Montreal (and her taxpayers) $600 million by the time it opened. Olympic Stadium has been more of a pockmark than a jewel in the city: its roof has repeatedly ripped, concrete beams and slaps have randomly fallen, its roof is deemed unsafe after a snowfall of more than eight centimetres, and the stadium has been without a permanent resident since the Expos relocated to Washington in 2004.

"Maintaining an Olympic venue after the Games have left, those are quiet costs shunted on the local host after the IOC jets have flown back to Lausanne," said Boykoff. He said the pattern keeps repeating itself. Just look at the Bird's Nest stadium in Beijing, he notes, which also has no permanent resident and costs $11 million annually to keep standing for the odd concert or press conference.

Montreal's ballooning costs became the norm for host cities decades later. An Oxford University study found that host cities averaged a 170 percent cost overrun over the last 50 years. Montreal was the big winner here (er, loser?) leading the pack with a 796 percent cost overrun.

The study's authors said one reason why Olympic estimates are so warped from reality is the fixed deadline of the Games. "All that managers can do at the Olympics is throw more money at problems, which is what happens," they noted. Basically, the Games depend on a blank cheque.

At a total cost of $12 billion (which may increase as expenses incur during the Games), the Rio Olympics is among the priciest in history. Its overrun is estimated to be around 51 percent. Also, the governor of the bankrupt Rio state declared a "public calamity" last month in order to wrest $890 million in emergency funds from the federal government.

Boykoff found that what's different today compared to 1976 is the militarization of security at the Games, where "local security forces use the Games as their own ATM machine to fund new weapons which they will be used to stop terrorism but ends up being used on protesters."

It's estimated Rio has spent $2 billion on security alone. But for all that funding, it was reported that 2,500 security positions were still not filled just five days before the opening ceremony.

Corruption has long dogged the Games, and 1976 was no different. When the 1980 Malouf Report was released, which outlined the corruption and Drapeau's incompetence in staging the Games, it singled out the mayor's right-hand man Gerard Niding, who accepted a house built for him in the Eastern Townships by a contract in exchange for an untendered contract. Remarkably, Niding only spent one day in jail.

Kickback schemes will likely rear its head in Rio, too, says Juliana Barbassa, a former AP reporter based in Rio and author of a new book about Rio's Olympics dream Dancing with the Devil in the City of God.

She described a cycle of back-scratching where presidents of huge construction firms are given multi-million dollar contracts, after years of shuttling political donations to heads of state. "It's a merry-go-round that existed in Brazil before the Olympics but it's jacked up to another level during the Games," she says in an interview from Rio.

She adds, "There's essentially no incentive for these companies to do a good job [with their contracted work] and they get paid a lot of money to do it."

We've seen the evidence of a shoddily-constructed Games so far in Rio: journalists and athletes are housed in apartments with leaky pipes, no running water, blocked toilets. And Guanabara Bay, the site of several Olympics events, is so polluted with sewage and garbage that athletes have been told to keep their mouths shut during competition.

You would think Rio would steer clear of any company caught in the crosshairs of a recent investigation. Not so fast. Many contracts were awarded to construction firms Odebrecht and Andrade Gutierrez, both at the centre of a multi-billion dollar corruption scandal that has helped plunge Brazil into financial chaos. Investigators believe these companies skimmed bribes from Olympic projects, too.

CityLab's Alex Cuadros succinctly wrote, "Contracts for everything from stadium and train-line construction to port renovations have funneled billions of dollars in taxpayer-subsidized revenues to a handful of Brazil's most powerful, well-connected families and their companies. This disconnect—between populist promise and the uneven benefits that followed—is emblematic of the failed Olympic ambition to remake Rio, and a slew of questionable priorities that have brought Brazil to its knees."

Brought a city to its knees? Montrealers can relate. It took 30 years to pay off the Olympics bill.

But were the 1976 Games all doom and gloom? Paul Howell, a planning consultant and key player in the Montreal Olympic Organizing Committee, said in an interview that the Montreal Olympics were a success, and "nothing went wrong, especially after the Munich Games crisis," where 11 Israeli Olympic athletes were taken hostage and killed.

He said the legacy left behind from the Games includes urban renewal projects and the Olympic Village, which was heavily used after the athletes left.

"Sure, Drapeau had an ego and could've worked better with labour unions on sites like the Olympic Stadium," Howell noted, "and I suggested Montreal work with a more professional team, but no one took me up on it."

His optimism is mirrored by Brazilian economist Armando Castelar Pinheiro, who said, "I think the Games have been better managed than the World Cup, will increase future tourism and will leave a legacy of urban renewal."

When she is read that statement, Barbassa laughed derisively. "Wow, really? Just look at that urban renewal statement. All the Games money is going to the west side of Rio, the wealthier areas, the gated communities. And trust me, the Games are going to do nothing to help Brazil's recession. It will only hurt it."

Looking at the key lesson Montreal can provide to Rio and future host cities, Boykoff said, "Don't believe those politicians who say this or that about the Olympics, and demand evidence and protest early and often to stave off the Olympics coming to your city."