They've put representatives from the two competing cities on stage for their announcement.

With the unanimous decision we took...

But everyone here already knows who won.

Please raise your hand.

Every four years, more than 5 million people attend the Olympics, and over 3 billion watch it on TV.

It's a once-in-a-generation opportunity for one city to show up.

And the competition has typically been fierce.

12 cities applied to host the 2004 Games before the IOC picked Athens, Greece.

10 applied for 2008, won by Beijing, China.

But since then, interest has been waning.

9 cities applied for 2012, then 7, then 5.

And for 2024, only two were left when it was time for a vote.

So the IOC did something it's never done before.

Paris, 24.

Los Angeles, 28.

The IOC was so concerned that nobody would bid to host the Games in 2028 that it simultaneously awarded the Games 2024 to Paris and 2028 to Los Angeles.

There used to be strong demand to host, now there isn't.

The Olympics are the most prestigious sports event in the world.

Why doesn't anyone want to host it anymore?

So the Olympics have actually had this problem before.

They originally came up with this idea of rotating the Games around to different cities back in 1896 because they had to.

We didn't have international jet travel and we didn't have international telecommunications.

Andrew Zimbalist wrote a book about the economics of hosting sports mega-events like the Olympics.

So it was necessary in order to spread the Games internationally and get the whole world to participate and enjoy them.

As the Games grew, the IOC kept this tradition, eventually developing a competition where cities would submit bids and it would vote on a winner.

But when it opened bidding for the 1984 Games, not a single city wanted to host because the last few hadn't gone very well.

Local political protests had turned violent during the 1968 Games in Mexico City.

And terrorists killed 11 Israeli athletes at the 1972 Munich Games.

Invade the Olympic Village, taking nine Israeli athletes hostage and killing two others in their room.

Both incidents showed cities that hosting could be politically risky, or even deadly.

When construction problems and corruption led Montreal to spend more than 13 times their budget, they began to view it as financially risky too.

So in the late '70s, the IOC was barreling towards disaster until one city offered to save them under one condition.

Los Angeles did not want to spend a lot of money.

To do that, it offered to use venues it already had instead of build new ones.

The LA Coliseum, where the USC football team played.

The Forum, where the Lakers played.

UCLA's gymnasium and tennis center.

And the athletes could just stay in the college dorm rooms.

Since the IOC didn't have a choice, it said yes.

And was soon glad it did.

The '84 LA Games were a success in almost every way.

But especially financially.

It only cost around $1 billion in 2015 dollars.

And LA even made a profit.

This should have become the model for future Olympic host cities, but instead, it sparked the problem that is plaguing the Olympics today.

It's interesting how many of these sports and politics stories really boil down to economics.

If you recall, the Premier League story is a story about a warped economic system.

The NFL is so successful because it created a new economic model for sports leagues.

If you haven't seen those videos yet, give them a watch.

If you haven't subscribed to Search Party, now's your chance.

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Now I'll take you back to the episode.

L.A. did such a good job hosting the 1984 Olympics that it re-inspired cities to want to host again.

For the 1992 games, six cities submitted bids, then six again for '96, eight for 2000, then a whopping 11 for 2004.

As more cities competed, the IOC regained leverage over them again.

But instead of sticking to the L.A. model, it began demanding more.

Between 1992 and 2020, the IOC added dozens of new sports to the games.

This required more venues and housing for more athletes, which host cities were primarily responsible for paying for.

As the competition intensified, cities felt increasing pressure to make their bids more attractive.

The most effective way to do that was to build new venues.

Sydney built 15 new venues, plus housing for 10,000 athletes.

Athens built 22 new venues and Beijing built 12.

All of this construction made hosting the games really, really expensive.

This chart shows how the cost of the games skyrocketed over the last 30 years, reaching between $10 and $25 billion in the last decade.

I want to add one big caveat to this chart, though.

It only includes sports-related costs to the games.

It doesn't include things like new public transportation or development projects that most all these cities spent money on for the Olympics.

If we include some of those costs, these bars are actually way higher.

So, for example, some estimate that Beijing spent more like $45 billion for their 2008 summer games.

Russia spent more like $51 billion in 2014.

And Tokyo's bill is more like $35 billion.

No matter what number you use, though, all of these cities went way over their initial budget, which the bidding process incentivizes them to keep artificially low.

What they have to do is make initial statements about the intentions and the plans that are very reduced.

Once the politicians say, "Yeah, OK, we'll go along with this," then they start adding the bells and whistles.

And those can be very, very substantial.

The revenue cities generate from ticket sales, TV contracts and sponsorships only cover a fraction of these costs,

meaning these governments and really their taxpayers are on the hook for the rest.

So it doesn't look like a good economic deal.

But host cities have known for decades that they'll likely lose money in the short term.

Instead, many have been told that hosting the Olympics is an investment that will pay off in the future.

OK, so this is the IOC's web page where they list the benefits of hosting the games.

And they use this word "legacy" a lot.

And by legacy, they mean things that will continue to benefit your city long after the Olympics are over.

Take sports facilities.

Beijing justified spending around $460 million on this new 90,000 seat stadium by planning for a local pro soccer team to use it after the Olympics.

London did the same when it built this stadium.

At first, seems like a good idea.

Other legacy projects are meant to benefit even more people.

Russia spent $8.7 billion on a new rail and highway link into Sochi for its winter games.

And Rio de Janeiro spent $4 billion on a new subway line connecting a beach community to its Olympic center.

The most commonly touted legacy benefit is that hosting the Olympics is a great way to kickstart your city's growth.

What historically came out of the public relations with regard to the Olympics was that this was the most wonderful thing that could ever happen to a city.

It puts your city on the world map.

So it will increase tourism.

It will increase commerce.

It will increase foreign investment.

And that story turns out not to be true.

Let's start with tourism.

A 2004 study found that after experiencing a bump in tourism leading up to their respective games, Atlanta, Sydney and Seoul all sought fall afterwards.

In his book, Andrew cites a 1996 study on three Olympic winter games that found that the long-term impact on tourism was between non-existent and very modest.

And a 2010 study that found little evidence of any benefit to tourism of hosting an Olympic games and considerable evidence of damage.

In other words, being on TV can backfire.

If the weather is particularly too warm or if it's too cold, if there are security incidents, if there are bad stories about the traffic, some cities are able to maybe help their image, but other cities are hurting their image.

Many legacy infrastructure investments haven't paid off either.

Russia's rail project is now considered an epic failure.

And Andrew argues that while Rio's subway line benefits some residents, what the city really needed was a line serving the lower-income neighborhoods inland.

But that's not where the Olympics were.

The typical case was that the IOC comes along and they say, "We need these 30 venues and we want you to put them in a way so that transportation is facilitated and other conveniences are allowed."

And so what the city would have to do is contort itself in order to accommodate the IOC.

Empty stadiums are a particularly visible sign of this mismatch.

That Beijing stadium had about 80,000 more seats than what the local soccer team could fill.

So it backed out.

Now the stadium sits mostly empty, costing the city some $10 million a year to maintain.

This is what's called a white elephant.

And there are now dozens of them across Olympic host cities.

These are venues left over from the Athens 2004 games.

And ESPN found that 12 out of 27 venues in Rio de Janeiro had not held an event a year after it hosted the Olympics.

For many residents, white elephants are evidence that hosting the games is a waste of money.

The idea that had been out there forever and ever, this is wonderful news for the city, they get to do this.

No, more often than not, it's going to be the opposite.

By 2015, city residents were ready to do something about it.

The IOC had six cities bidding for the 2024 games until protests forced Boston and Hamburg to drop out.

A new mayor in Rome fulfilled a promise to shut down its bid.

Then more than 260,000 people signed a petition that led Budapest to drop out as well.

It left the IOC with just two bidders.

And, once again, little leverage.

The IOC has since passed reforms that it says reduce the cost of hosting largely by requiring hosts to use existing and temporary venues, like LA did back in 1984, and allowing them to partner with other cities.

As of now, Paris doesn't look like it will blow its budget.

And LA's organizing committee is saying that the city can again pull off an on-budget Olympics.

But the question is, if they do, could it spark another bidding war?

I don't know if we'll go into a big cycle like we did after the '84 Games.

I do think it's possible that there'll be a small turn.

It'll appear less undesirable than it has.

The IOC has also stopped taking bids and instead negotiates with cities privately.

It picked Milan and Cortina, Italy over Stockholm for the 2026 Winter Games.

And it gave Brisbane, Australia the 2032 Summer Games.

But some are arguing for a more permanent solution.

I think it's perfectly plausible to think about building the Olympic Shangri-La with its 35 or 40 venues for the Summer Games, a smaller number for the Winter Games, in one place.

Some believe Greece, the historical home of the Olympics, would make a good permanent host.

Others have mentioned LA, since it has so many venues and has done so well in the past.

A permanent spot would eliminate white elephant projects, save cities from going into debt, and reduce the game's environmental footprint.

But it could also reduce much of the excitement around each new Olympics.

It's not going to be easy to go to a model that makes environmental sense and economic sense.

But I do think it makes sense to talk about it and put it out there as some place that we should be heading.

Depending on how the next few Olympics go, it might be the only direction left.

All right, thanks everyone so much for watching episode 15.

That's also our one-year anniversary of Search Party.

We have over 380,000 subscribers, we've published 15 videos, a ton of shorts.

If you haven't subscribed yet, please do.

And I want to thank my whole team for the really hard work they've done over the last year.

It's been a lot of fun.

Keep an eye out for our next few stories.

We've got a really good pipeline coming.

We've got one more Olympics story.

And then we're back to geopolitics on a really exciting story that's got a really cool visual hook that I think you guys will like.

And then we're doing a story on MMA and then sports betting.

So keep an eye out for those.

Again, if you haven't subscribed to Search Party, please do.

And I'll see you in a couple of weeks.

All right, see ya.