Hosting The Olympic Games: An Economic Analysis

Hosting the Olympic games is not advantageous for the host city is because of how incredibly expensive the games are. The cost of hosting the games has been rising and now it costs a country billions of dollars. The games cost cities and countries billions of dollars to fund and produce. The 2008 Beijing Games, and the 2014 Sochi Winter Games cost each country around 50 billion dollars. This translates to an average of $120 million per event in Beijing, and $520 million per event in Sochi (Why). Athens in 2004, and London in 2012 were significantly cheaper at around $15 Billion (IOC considers). 50 billion dollars for a single two-week event is an outrageous cost. Even the Athens Games in 2004 which only cost 15 billion dollars is still very …show more content…
In most cases, a large majority of the funding for these games comes from the taxpayers. Public support is a big part of getting selected as the host city. The public has to be willingly to pay for the high cost that comes with being the host. Of the $15 billion that it cost to host the London Games, $13.8 billion came from the British taxpayers (2012). In Russia in 2014, 96.5% of the funding came from the public (Why Nobody). The rest of this money comes from various corporate sponsorships. The IOC, however contributes no money to the cost of the games. In its charter it states “The IOC shall have no financial responsibility whatsoever in respect of the organization and staging of the Olympic Games.”(Forbes). By giving no money toward the cause, despite being the group that overlooks it, the IOC stands to benefit …show more content…
However, the harsh reality is that this is not the case. In most Olympics, a lot more money is spent on the games than is gained by them. Many economists consider a successful games as one that simply breaks even. So how much is made during these games? The organizers of the 2012 London Games are estimating that the games will bring in $3.07 billion. This is substantially lower than the $15 billion spent on the games. There is also considered to be an extra 3 billion dollars increase in revenue in the years following the event (Frewin). This combined revenue of approximately $6 billion is right along the average money gained from the event. However, while in London, the games cost approximately $15 billion, while in Beijing and Sochi, the price of the game was up around $50 billion. This means the latter two cities lost approximately $44 billion on this investment. This directly affected the country’s people. Hosting these games is especially controversial for poor nations. Brazil is being criticized for hosting these games despite being an incredibly poor country that is not really in a position to be making risky investments. China is in a similar situation. It is has a large portion of its people who are very poor. Ironically, however, these poor people are the same people who are funding the games through

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