Greece Should Be Swimming In Cash…

Unless you have been living in a cave somewhere in the Himalayas, you have to know that the Greek government has a “debt problem” on its hands. Do not worry, I am not going to pretend to be an economist here nor am I going to tell you what necessary measures the Greeks and the other players in the European Union ought to take in order to minimize the global repercussions of that “debt problem”. No, I just want to observe today that this “debt problem” is a real shocker when you consider:

    It was only 7 years ago that the Greeks were the hosts of the 2004 Olympic Games and everyone knows that hosting the Olympic Games provides an economic windfall to the host nation. In fact, the biggest problem the host nation will have after the games have concluded is deciding what to do with the tsunami of cash that will reside in their coffers…

That is only a slight exaggeration when compared to the justifications provided before the fact as to why a country should spend a ton of money for the honor of being the Olympic host. Here are some realities:

    1. The Greek government was heavily in debt prior to 2004 and needed to find ways to cut spending and borrowing at that time instead of pouring many billions of dollars into facilities for the Olympic Games. Some estimates had the costs in the $10B range…

    2. The only way the Olympic Games can truly be “profitable” to the host country is for the games to draw more money from outside the country into the host country than the host country spent on getting itself ready to be the host country. That did not even come close to happening… [By the way, that did not happen in China in 2008 either.] Therefore the debt incurred in order to host the Olympics was not retired and the debt service on those obligations remain on the books to add to the rest of Greece’s problems.

    3. If you allow me to make three unchallenged assumptions about the economic benefits of any public spending project going forward, I will make any project appear to be such a gold-plated bargain that only a dolt would refuse to do it. The problem is that my “unchallenged assumptions” will require you to deny reality as the price for not challenging them. Such is the stuff of the economic studies that justify spending to host the Olympic Games.

    4. Any country that does not have most – if not all – of the facilities needed to host the Olympic Games already in a sufficient state of repair such that the events could be held there at a moment’s notice will not turn a profit on any Olympic Games.

Let me be clear here. The fact that Greece hosted the Olympics is not the cause of the current problems. The fact that Greece hosted the Olympics in 2004 is a contributor to the current problem and should be a significant cautionary tale to any and all other cities or countries that plan to bid for future Olympic Games. There are intangible benefits to be had for hosting the Olympics such as international recognition and a few lasting infrastructure improvements; there are also long-term debts that will accrue from the games because the Olympic Games are a money-losing proposition.

Yesterday, I mentioned that the LA Dodgers had viable candidates for MVP and for the NL Cy Young Award and still were only a .500 team. Part of the problem has to be the ownership situation there wherein Frank and Jamie McCourt have taken money out of the team to such an extent that the team is economically disadvantaged when it comes to paying for talent. If anyone doubts that is a problem, consider that the LA Dodgers have filed for bankruptcy and that process is ongoing as I write these words.

The latest turn of events in that bankruptcy saga is that MLB has petitioned the bankruptcy court to order the sale of the Dodgers’ franchise to generate the cash that would be necessary to have the team “settle up” with its creditors. According to an AP report, MLB supposedly told the court that any plan the Frank McCourt presents to retain control of the team is “dead on arrival” because any such plan would have to involve him selling future TV rights to the Dodgers and that MLB will not approve such a deal. Supposedly, MLB also said in its petition to the court that once the Dodgers emerge from bankruptcy – - as they have to do at some point in the future – - that MLB “could enforce its ability to strip McCourt of the team”.

I am not sure exactly what that means in terms of the rules that govern ownership of MLB teams, but it does make one point rather clear:

    MLB wants someone other than Frank and Jamie McCourt to own the LA Dodgers.

Stay tuned. This soap opera is nowhere near ready to end…

The ownership of sports franchises attracts an interesting mix of folks. Should MLB be successful in forcing the sale of the Dodgers, here is an example of the kind of owner the team might wind up with.

    The Italian soccer team in Palermo is run by Maurizio Zamparini. Palermo is a city in Sicily and the team plays in the Serie A – - the top Italian soccer league. Just before this season commenced, Zamparini fired the coach, Stefano Pioli. Before anyone asks why that is even interesting, let me say that Sr. Zamparini is someone who makes Danny Boy Snyder’s level of impulsiveness look like Mother Teresa’s level of patience.

    Zamparini has run the Palermo team for the last 24 years; and in that time, he has hired and fired 36 coaches – - up to and including Stefano Pioli. On average, a coach has lasted two-thirds of a season with Palermo. Say what? Even a lot of celebrity marriages last longer than that…

      Memo to future Palermo coaches: Rent, don’t buy!

Finally, here is an observation from Mike Bianchi of the Orlando Sentinel:

“[SMU athletic director, Steve Orsini] has informed the Big 12 that SMU is ready to join. In related news, Bob, who plays ukulele in the local Holiday Inn house band, has informed U2 that he, too, is ready to join.”

But don’t get me wrong, I love sports………

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  • Rich  On September 29, 2011 at 9:41 am

    Final day of regular MLB season: September Madness.

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