🥇 Costly déjà vu?

Hello! Welcome back to the Brazil Sports newsletter, brought to you by The Brazilian Report. This week, as Rio sets its sights on another major international sporting event, we look back at the legacies of the 2016 Olympics and the less-discussed 2007 Pan American Games.

If you have any questions about this newsletter, or topics you’d like to see covered in future issues, send me an email at [email protected]

Rio-Niterói’s Panam bid: A winning legacy or costly déjà vu?

By a fairly overwhelming 48 votes to one, with one abstention, the Brazilian Olympic Committee (COB) this week endorsed the joint bid from Rio de Janeiro and Niterói to host the 2031 Pan American Games. The city of São Paulo had also been in the running but pulled out last month to support the Rio-Niterói candidacy. 

The only other bid in the Americas so far comes from the Paraguayan capital of Asuncíon, with the final decision and announcement set to take place this August.

However, while 48-1 is a very convincing margin indeed, the COB’s support for the Rio-Niterói bid was contingent on a number of demands, laid out in a letter addressed to the mayors of each candidate city.

Signed by COB’s new president Marco Antônio La Porta, the document notes that committee directors are concerned about the actual legacy the event would leave for Brazilian sport, considering “the precedent of the 2007 Pan American Games in Rio.”

Before Brazil’s Wonderful City played host to the World Cup, the Olympic and Paralympic Games, the G20 Summit, Web Summit and other major events, there was the Pan American Games of 2007.

Past Pan problems

While welcomed with some excitement at the time, the 2007 Pan American Games are largely looked back on as an expensive failure, particularly with the examples of some of its main construction projects.

The Estádio Olímpico Nílton Santos¹ — built specifically for the tournament at more than five times over budget — faced successive problems in the aftermath of the 2007 games, and it was closed in 2013 due to severe structural risks to the stadium’s roof.

Furthermore, despite being named an “Olympic” stadium, it was built with a capacity below 60,000, meaning it would not be big enough to host the track and field events at the 2016 Olympics. It had to be renovated and expanded accordingly — an endeavor that cost almost half the stadium’s original price, already well over budget.

A similar issue occurred with the Barra Velodrome, built for the 2007 games with an eye on a future appearance at the Olympics. Once Rio had been selected as the host for 2016, a visit from the International Cycling Union concluded that the velodrome was unsuitable for Olympic competition — and that alterations to the structure would be extremely expensive.

As a result, the velodrome had to be completely torn down, with a new one built alongside it. 

Indeed, the check for the 2007 Pan American Games has yet to be fully paid. The COB’s letter to the mayors of Rio and Niterói specifically called for the resolution of “legal proceedings related to the Organizing Committee of the Rio 2007 Pan American Games.”

These proceedings consist of cases at the Federal Accounts Court and federal justice system related to alleged procurement irregularities by the 2007 games’ organizers. Almost 20 years on from the event, the COB is still on the hook for BRL 176.5 million (around USD 30 million). 

Rio’s Olympic legacy

A study by Oxford economists Alexander Budzier and Bent Flyvberg showed that the Rio 2016 Olympics cost USD 23.6 billion, trailing only the 2014 Sochi Winter Games as the most expensive in history. While the Olympics never come in under budget (ever), the costs for the Rio Games went over estimations like no other edition in history — by a whopping 352%.

Despite their hefty price tag, the 2016 Olympics and Paralympics present a starkly different narrative from the troubled 2007 Pan American Games.

“Rio de Janeiro managed to generate social and economic benefits from the Olympics. The games had positive direct and indirect impacts on tourism, on economic activity, and on the improvement of public facilities,” said economist Joelson Oliveira Sampaio, from the Getulio Vargas Foundation.

Indeed, Sampaio and his colleagues published a study last year seeking to quantify the economic legacy of the Rio Olympics and concluded that the 2016 Games were one of the most efficient in recent memory when it comes to the use of public money.

Over eight years, the study’s authors found, the Olympics bolstered Rio’s GDP by BRL 51.2 billion (around USD 9 billion), increased tax revenue by BRL 5.3 billion, and led to family income gains of BRL 36.2 billion, creating almost half a million jobs in the process.

“When you build a sports arena, you’re going to hire laborers. These people are going to earn salaries, which they will use for consumption, for hiring services of their own, which keeps the economy ticking over. So, that was our calculation: for each real spent [on organizing the Olympics], how much came back in terms of job creation, wealth and services for the population,” Sampaio told The Brazilian Report. 

“For Rio, when we look at GDP growth, job creation, the increase in tourism and the improvement of public services, the balance was a positive one.”

Why the Pan American Games? And why Niterói?

“I don’t want to brag, but it’s a Rio thing. Every big sporting competition that’s going, we want to host it.” When he was brought in as municipal sports secretary in 2021, Guilherme Schleder had one main request of his boss, Rio de Janeiro Mayor Eduardo Paes: major events.

“We looked at all the big sporting competitions that would be happening over the next few years and started planning things out,” Schleder told The Brazilian Report. “I was one of the first people to work towards bringing the Women’s World Cup here in 2027, I was pestering [Ednaldo Rodrigues, head of the Brazilian Football Confederation] on the phone, saying ‘Ednaldo, we have to bring this World Cup to Rio!’”

Beyond that Women’s World Cup in 2027 and the rhythmic gymnastics world championships this August, the 2031 Pan American Games was also on the radar of Schleder and his team — but, as he admits himself, it was not the department’s main focus.

That reportedly changed last year, when Rodrigo Neves was elected mayor of the adjacent city of Niterói and pushed the idea of launching a joint bid with Rio de Janeiro, its imposing neighbor across the Guanabara Bay.

Niterói also has a strong sporting tradition of its own — particularly when it comes to sailing, the source of dozens of Brazil’s Olympic medals. Isabel Swan, a bronze medalist in Beijing 2008, is Niterói’s vice mayor and will help lead the joint bid.

The proposal is to host the games in seven clusters: four in Rio using much of the city’s existing Olympics facilities, and three in Niterói. In terms of non-sporting projects, the grandstand infrastructure project would consist of building a new metro line, linking Rio to Niterói and São Gonçalo. The idea has been around for decades, but has never been fully taken up due to its perceived high cost.

Other stories we’re following

🔙 As we anticipated in last week’s Brazil Sports newsletter, Neymar sealed his return to Santos. The 32-year-old was unveiled in a grand event on Friday night and will be paraded around the Vila Belmiro stadium before today’s match against São Paulo. He is set to make his debut on Wednesday, his 33rd birthday.

🇧🇷 On the same day as endorsing the Rio-Niterói bid to host the 2031 Pan American Games, the COB also inaugurated its new chairman and his deputy, Marco La Porta and Yane Marques. La Porta is a former Army colonel and triathlon coach, while Marques is an Olympic medalist in modern pentathlon.

⚽ Brazil’s men’s under-20 side scraped through to the knockout stage of the South American championships, the qualifying tournament for this year’s U-20 World Cup in Chile. Brazil’s opener saw them humbled 6-0 by rivals Argentina.

1  Renamed as such in 2017, it was originally the Estádio Olímpico João Havelange, more popularly known as the Engenhão due to being located in the Rio de Janeiro neighborhood of Engenho de Dentro.