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While not all Olympics have a great lasting legacy, one Spanish city wouldn't be the same without them.
This is the final of a four part series called "The Finance Of The 2012 London Olympics." This series goes in-depth on the financials associated with this year's Summer Olympics. This series is sponsored by OppenheimerFunds.
Will the London Olympics have a great lasting legacy?
It's not entirely clear at present, and there's plenty of reasons to believe it might not. The Olympic Curse has struck many cities, most recently with 2008's host Beijing, where the incredible new stadiums built are gathering dust.
But some cities have had a positive outcome. Perhaps the clearest example of a recent Olympic host city having a positive effect on a city is Barcelona.
Nowadays we think of the Spanish city as a land of sun, sand and sangria, but it's easy to forget that before the games in 1992, it was a somewhat different place. For one thing, it didn't really have a beach before — the city created two miles of beachfront and a modern marina by demolishing industrial buildings on the waterfront before the games.
The city had become an industrial backwater under the long rule of General Franco, who was perhaps angry at the city's Catalan population for its resistance during the Spanish Civil War.
The Olympics represented a significant effort to restructure the city. A report on the economic impact of the Olympics by Ferran Brunet of the Universitat Autònoma de Barcelona reveals the extent of the investment in infrastructure:
"[New] roads represented an increase of 15 percent over those existing in 1986; new sewage systems, 17 percent, and new green areas and beaches, 78 percent."
Such investment came at a cost — $11.4 billion in 2009, according to one recent study (that's more than 400 percent over budget).
Brunet argues that the investment was worth it. For example, unemployment dropped dramatically, from an all-time high of 127,774 in November 1986 to a low of 60,885 in July 1992. Olympic infrastructure created for the games is thought to have provided more than 20,000 permanent jobs for Barcelona.
Crucially the games seemed to change the way people thought of Barcelona. Between 1990 and 2001 the country went from being the 11th "best city" in Europe to the sixth, according to one ranking. The IOC says that 20 years after the games Barcelona is now the 12th most popular city destination for tourists in the world, and the fifth in Europe.
Finally, there seems to be one somewhat curious outcome from the Olympic Games, and one that we suspect Londoners might be very happy with if it happened to them: It turned Spain into a sports juggernaut.
Think about it: Spain has world class athletes now in soccer, basketball, cycling, and tennis. This, some argue, is a direct result of investment in sporting facilities and training before and after the Barcelona Olympics. Juan Jose Paradinas, a Spanish sportswriter, told the Atlantic's Allen Barra last year:
"The Barcelona Olympics unleashed a torrent of money from both the government and private sources to build sports facilities all over the country and support sports which had not previously had support in Spain. By the end of the decade, we saw the results. Now Spanish sports make money. Real Madrid may be the most profitable football [soccer] club in the world."
The London Olympics may be expensive (107 percent over budget at $13 billion, one study says), but we're willing to bet that if it helps produce a World Cup winning England team, or a Wimbledon winning British tennis player, many Brits will be very happy with the investment.
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