When The Torch Goes Out
Has The Cost Exceeded The Gain?
T. G. George
THE OLYMPIC GAMES ARE A GLOBAL SPORTING SPECTACLE, esteemed in tradition and history. The first games were hosted in 776 BC, Ancient Greece, where the athletic wonders of the world were celebrated every four years for almost 12 centuries. In 1896, the first games of the modern era were hosted in Athens. Since then, this display of athletic excellence has transformed itself into a paragon of peace, culture, and competition.
Today, the Games are more than just the athletes competing, but rather, a bright light shed on the host nations. With the opportunity to celebrate the beauties of their country, enhance their global profile, spark development and be a part of this global phenomenon, the eagerness to host these events over the past century has grown. But has the cost outstripped the fruitful benefits?
Since 1960, every single Olympic Games has run over budget, but this severity was only illuminated in 1976. Here, the host city, Montreal, initially projected the cost of the Games to be $124 million – a gross underestimation that was soon overblown by billions of dollars. The Canadian city left these Games with $1.5 billion in debt, saddling taxpayers until 2006 when it was finally repaid.
The only profitable Olympic Games were in Los Angeles in 1984. However, this came following a decade of unsettling Games, plagued by a massacre, high costs and boycotts. Consequently, LA was the only city to propose a bid, exuding significant negotiating power. This, combined with the reliance on existing stadiums and a sharp increase in television broadcast revenue, saw a $215 million operating surplus.
Apart from this abnormal occurrence, the deficits incurred by host nations have continued to increase.
So, what are the costs?
Well, even the process of submitting a bid is exuberant, with Tokyo spending $150 million on a failed bid in 2016. Once the bid is accepted (which was $4.8 billion for Brisbane 2032) the real expenses start to pile up. Infrastructure expenditure ranges from $5 billion to $50 billion, including new stadiums, transportation upgrades, accommodation availability, and Olympic Village construction. There are also further planning costs associated with the logistical nightmare of hosting hundreds of thousands of tourists and ten thousand athletes spread across a hundred events.
Following this investment, some nations are able to benefit from their developments. For example, the Sydney Olympic Village was transformed into housing. However, this is often not the case. The majority of this sporting infrastructure becomes obsolete, especially facilities that are highly specialised. Another growing issue consists of “White Elephants” which are expensive projects with limited usage afterwards. For example, the Sydney Olympic Stadium costs Sydney $30 million a year to maintain. Fortunately, this stadium has had more usage than others. Beijing’s “Bird’s Nest” stadium, which cost $460 million to build, requires $10 million a year to maintain, and is mostly unused.
The financial burden of the 1976 Montreal Olympics is not the only extreme case. The 2004 Athens Olympics cost $7.5 billion, and was a significant factor in accentuating the Greek debt crisis that left Greece bankrupt. Other extreme taints on the budget include the $52.7 billion spent on the Sochi, Russia Winter Olympic Games in 2014 and the $52.7 billion spent on the Beijing Olympic Games in 2008.
Empty beach volleyball stadium, Athens
Nations are beginning to become hesitant towards bidding. In the bid for the 2024 games, Budapest, Hamburg, Boston, and Rome all withdrew, leaving only Paris and Los Angeles, which were, hence, simultaneously chosen to host 2024 and 2028, respectively. The Boston mayor stated that he “refused to mortgage the future of the city away”.
Hence, the IOC has enacted change. The 2020 Olympic Agenda aims to reduce the cost of bidding, allow hosts more flexibility in using already-existing facilities, and promote development that outlives the Olympic Games.
As Brisbane begins their tedious planning for 2032, Australia is hopeful that these IOC changes prove beneficial. The Queensland government predicts that the Games will boost international tourism and trade by $8.5 billion and provide $9.1 billion in social benefits across the nation. However, the organisational budget already stands at $5.8 billion, with the initial budget ballooning to $4.45 billion. With still eight years left until the Games commence, I hope the guise of the economy doesn’t taint our nation’s excitement towards these prestigious Games.