Rio Beats Chicago, Others, to Win Olympics

The Olympics are on their way to Rio in 2016.

It will be the first Olympics ever held in South America. It’s a sign of the rise of Brazil as an economic and political player in the world. Rio de Janeiro beat out some impressive competition—Chicago, Tokyo, and Madrid—to win the games.

Chicago can take some comfort from this: According to NPR, no one who’s hosted an Olympics has ever made money.

Sure, Los Angeles claimed a $233 million surplus back in 1984. But that didn’t take into account indirect costs provided by city, state, and federal governments for the games, Robert Barney, director of the International Centre for Olympic Studies at the University of Western Ontario, told NPR.

"No reasonable person thinks that the direct benefits of hosting the Olympic Games or any other mega event cover the costs," Andrew Rose, an economist at the Haas School of Business at the University of California in Berkeley, told NPR.

So Rio can just eat the costs. Of course, there are intangible benefits. Not tourism (as if Rio needed more tourists anyway), as is often touted, and not new industries. It’s trade that gets a 30 percent boost for host cities. And that’s very good for a city like Rio, and a country like Brazil, which is climbing the ladder as an important world exporter.

Of course, just bidding for the big event has a similar effect on trade.

So looked at from a business standpoint, if the Windy City was looking for profits, it’s in good shape. Pride is another matter. Chicago was eliminated in the first round of voting by the International Olympic Committee, despite last-minute pitches for the second city from President Barack Obama and his wife, Michelle. Tokyo was eliminated in the second round, leaving the IOC to choose between Madrid and Rio de Janeiro.

And at least Obama’s catchphrase, “Yes we can,” was effective for someone. Brazil’s President Luiz Inacio Lula da Silva used it in a pitch for the games in which he also said Rio was ready “body and soul” to host the games.

"For some countries, it is just one more sports event that they are going to organize," Silva said. "But for us, it is a unique and extraordinary thing."