When Bostonians think back to the 1980 Lake Placid Olympics, their minds inevitably focus on one thing: They think of the “Miracle on Ice.” The magical story, where legendary hockey coach Herb Brooks and a group of feisty college players overcame long odds to stun the heavily favored Soviet Union and eventually win gold, remains the single most popular USA Winter Games memory.
After all, it was Mike Eruzione, from Winthrop, who scored the go-ahead goal in the “Miracle” game against the Soviets. One of the country’s best Olympic moments will forever have a proudly local connection.
Forgotten amid the glorious memory of a classic American underdog tale was another, arguably more important legacy of the Lake Placid Games: It was the last time a U.S. Olympics ended in debt. Unlike the highly touted financial surpluses of the Los Angeles Olympics in 1984, Atlanta in 1996 and Salt Lake City in 2002, the 1980 Games were a financial failure.
That was true at least in the immediate aftermath. The longterm legacy of Lake Placid is more complicated, given the eventual existence of the Olympic Regional Development Authority (ORDA), whose job has been to manage the area and facilities left behind by the Games.
As Boston examines its own potential Olympic bid (Boston 2024), the behind-the-scenes financial legacy of the Lake Placid Games represent a worthy study, if only to add balance to the conversation. As much as Boston 2024 CEO Rich Davey likes to mention that “the last three Olympics in the United States turned a profit,” it’s also important to remember the Olympics that he specifically stopped his list at (the fourth Olympics going backwards in history was, in fact, Lake Placid).
The Lake Placid debt
Unlike Boston 2024’s stated plan, the Lake Placid Games were initially intended to be largely federally funded. The Olympic Authorization Act of 1976 gave the Lake Placid organizers $49,040,000 of U.S. taxpayer money to cover costs. Quickly, it became apparent that more would be needed. According to official IOC report on the 1980 Winter Games, an additional sum of money “in excess of $9 million” was given by the U.S Justice Department for the construction of the Athlete Village. Following the Games, it was famously converted into a medium-security youth correctional facility.
After receiving a string of funding add-ons from New York state, it was still clear that cost overruns would need to be addressed. According to the IOC report:
In July of 1978 it became obvious that additional funds would be necessary from federal sources due to cost over-runs generated by inflation, environmental requirements, and the immovable construction schedule that would need to be maintained to meet the February 13, 1980, opening date of the games.
Eventually, this led to a total of more than $100 million in federal funds finding their way into the Lake Placid Games, representing a 53-percent federal expenditure overrun.
In the end, New York state also contributed $32.3 million, nearly triple its initial investment of $11 million.
And even with the expanded scope of federal and state funds, it wasn’t enough.
Given the relevance of the Boston 2024 conversation, it’s clearly evident that the 1980 Winter Olympics should mean more to Bostonians than simply the “Miracle on Ice.”
Following the end of the Lake Placid Olympics, there was an initial deficit of $8.5 million. Of course, it’s necessary to put this into modern perspective (given the massive differences in 1980 dollars vs. those of 2015).
Consider that the 1980 Lake Placid Olympic arena (now named the Herb Brooks Arena in honor of the legendary “Miracle”) cost only $14,281,673 million to build from scratch. Comparatively, the Bolshoy Ice Dome for the 2014 Sochi Games, while obviously swamped by insane cost overruns, was also built from scratch for more than $300 million. Equivalent costs for the 2018 Winter Games will reportedly total $425 million.
Given those comparisons, $8.5 million in 1980 (compared to the what $14.2 measures in 2015 dollars) looms large as leftover debt.
What saved the legacy?
The immediate aftermath of Lake Placid represented a dark period for the USOC and the LPOOC (Lake Placid Olympic Organizing Committee). With the United States boycotting the Moscow Olympics (despite the Soviets having participated in the Lake Placid Games), the USOC wasn’t exactly making friends in the international sports community. And the LPOOC was still sunk in the debt.
And given the strong federal resources that had been invested, it was only mismanagement that could be blamed. Terrible organizational issues in regards to ticket sales and transportation left the Olympic revenues well below where they should have been.
Faced with the distinct possibility of bankruptcy, the LPOOC was saved from an ignominious fate by New York congressional action. They bailed out the debt left from the Games’ organizers, and created the Olympic Regional Development Authority to manage the legacy facilities. The underlying importance of this action cannot be overstated. As Ski Magazine noted in 1982:
Given all the problems, promises and complexities of the financial and legal situations, there is little question in anyone’s mind that had the state not done what it did—create ORDA, unity land-facility ownership, bail out the LPOOC—the whole mess would have collapsed and Lake Placid would have returned to its previous condition of sullen servitude, not-so-genteel poverty and wistful thoughts of what could have been.
Over the ensuing decades, ORDA successfully piloted Lake Placid’s legacy to safety, even outstripping the initial expectations of the aimed aftermath of the 1980 Games.
For example, 33 of the 34 medals won the U.S. at the 2002 Salt Lake City Games were won by athletes who trained in Lake Placid. And according to financial reports, ORDA-managed facilities have consistently drawn in over $300 million to the region, helping to add over 1,000 jobs. It’s a tremendous achievement, considering it all teetered on the brink of never happening in the immediate time following the end of the 1980 Games.
Of course, recent audits of ORDA have called into question some of its accounting. An audit from the New York state comptroller in 2014 found that “The New York State Olympic Regional Development Authority (ORDA) relies on loans and outside contributions to cover cash shortages and in recent years has used a line of credit to cover its basic operating costs, including payroll.”
Regardless of its contemporary financial issues, ORDA remains a successful investment for New York in the scope of 35 years. The amount of economic activity that it’s generated, especially considering the what would’ve befallen the region had it not been created, outweighs current trouble (though it certainly does call into question aspects of the Association’s future).
What it means for Boston 2024
Given the relevance of the Boston 2024 conversation, it’s clearly evident that the 1980 Winter Olympics should mean more to Bostonians than simply the “Miracle on Ice.” Fantastic and inspiring as the story of Eruzione and his teammates remains to this day, the history of the Lake Placid Games as a whole is also an informing one in the discussion of Boston 2024.
First, it’s obvious that U.S. games are not a guarantee to end with a surplus. Any naive notion of “American Exceptionalism” (that somehow “we do things differently here”) is absurd and erroneous. If nothing else, the Lake Placid Games serve as a reminder of that.
On the other hand, the success of ORDA in rescuing the Games’ legacy from debt and bankruptcy is potentially another notable observation in the Boston 2024 discussion. That said, it’s difficult to draw comparisons between the capability of ORDA and any potential equivalent in Boston. While Western Massachusetts could draw comparisons to the remoteness of upstate New York, densely-populated Boston certainly cannot.
Giving a single state entity an ORDA-degree of unfettered authority would be impossible in the Boston area.
The main takeaway from the 1980 Games for the purposes of the Boston 2024 conversation remains the danger of cost overruns and transportation management. Venues for the Lake Placid Games didn’t fill-up to capacity in numerous cases because tourists couldn’t get to where they wanted to go. Boston, filled with questions about its transportation system, should take note.
And the difficulty in staying on-budget can result in a perilous aftermath. While New York state was able to manage and bailout its debtor Games, Boston (and Massachusetts as a whole) would find it more difficult, given the explosion of costs in Olympic venues.
Bonus: Here’s the Eruzione goal from Disney’s Miracle, because why not?
Featured image via Henry Zbyszynski, CC By 2.0
