Who doesn't love to watch their favourite country in the Olympics but have you ever thought about the expenditure incurred to host the Olympics? For instance, the Olympics is the most awaited international leading sports event that every sportsman will look forward to.
Whereby different countries compete with each other in various competitions such as- Athletics, Baseball, Archery, Gymnastics, shooting, Rackets and many more.
Usually hosting an international event, especially the Olympics, demands a tremendous amount of money to conduct as, every year, different countries make bids million or billion bigger in order to host the Olympics and take charge of the spending that literally covers around tens of millions. So, Let's understand the economic impact of the Olympics.
Why is there a Concern about Investing Money in Hosting Olympic Games?
Regarding hosting the Olympics, the priority task for the hosting country is to fulfil the demands & requirements of the International Olympic Committee (IOC) such as infrastructure updates, Olympics village, operational cost, transportation, maintenance, accommodation and so on.
Apart from the benefits of the augment in tourism (travel to watch the games) and infrastructure update in the countries or cities, the hosting country has to defray the expenditure of renovation which are accountable to incur beyond the expected budget of the hosting country.
As is the case, it is reported that many countries encountered an economic downfall and bankruptcy after hosting the Olympics. Instead of uplifting the economy in terms of unemployment, poverty, and many other opportunities, those countries misspent millions of million in hosting the Olympics which seems irrelevant according to the national spending.
Since the Olympics 1960, No countries or cities haven’t witnessed profit from hosting, though London and Seoul found profitability as they took advantage of existing structures in updating infrastructure and corporate sponsorship in funding other expenses. While the other hosted countries fall into a massive debt that can take decades to pay off.
Many hosted countries failed to maintain their finances which made them insouciance about investment in the Olympics again and not ready to face tremendous financial instability after hosting the Olympics.
Here, one such country is taken into consideration, the Rio de Janeiro, When the state won the bid back in 2009, for hosting the Olympics 2016, didn’t see the preordained financial catastrophe after the Rio de Janeiro Olympics 2016. Although for the very first, the country received a global audience of more than 6.6 million in the Olympics, it failed to meet crucial financial arrangements for the games.
In order to appeal to the audiences as well the IOC, the country did things beyond imagination, where the act of demolition and displacement of the country’s heritage sites occurred, fomented human rights in the nation.
The former governor Francisco Dornelles at the time proclaimed ‘state of calamity in the country, where the state’s government is bankrupt and failed to meet further requirements in the upcoming game of Olympics 2016.
Another example of financial disaster after hosting the Olympics was Montreal's 1976 Summer Games where they were liable to pay around $1.5 billion, which took three decades to repay.
The Economic Impact of the Olympic Games
Instilling in hosting the Olympic tournaments is beneficial and productive is a counterfeit presumption. The government's agenda on constructing modern arenas is the perception that it will generate fresh careers and the arenas will succeed to be beneficial in the future but it never takes place.
For hosting the 2002 World Cup, South Korea subsidized a hefty number in constructing 10 new arenas with a capacity of holding 40,000 to 60,000 people. But the aftermath was disappointing, to date they operated simply five of the stadiums and the typical crowd stature for soccer games is roughly 3,000.
Likely, Nigeria built a stadium for the 2003 African Games with a capacity of holding 60,000 people, but the arena hadn't been utilized due to the high keeping and conspiracy rate in the area.
Likewise, there were several further countries like Chicago and Rio de Janeiro that hosted the tournament in the notion that it would boost tourism and also enhance the infrastructure. Nonetheless, some of the countries didn't achieve the outcome they foresaw but few managed to succeed.
Sydney developed over 100,000 new job vacancies, Atlanta Olympic Organizing Committee created 77,000 new jobs, South Korea profited an $8.9 billion.
How are the Olympic Games Financed?
Organizing the Olympic Games costs high budgets and the allowance for the Olympic Games can be halved into two sorts:
OCOG (Organising Committee For the Olympic Games) Budget:
The IOC contributes a large amount of money. They subscribe from the dividend they receive from the top Olympic Partner programme and from the capital they obtain from the firm they trade the broadcast ownership for the Olympic Games.
A hefty sum of capital is mandated to coordinate an Olympic Games and IOC subsidies fill in a considerable portion of it. In the Rio 2016 Olympic Games, the capital required to organize the event was 1.5 billion USD.
The country that owns the Olympic rights should also provide the ticketing of the event. The money for host broadcast operations is also contributed by the IOC. The federal partnership programme is also the basis of income for the provincial organisers. Around 880 million USD will be invested for the 2022 Olympic Winter Games.
NON-OCOG (Organising Committee For the Olympic Games) Budget:
The regional councils hold control of this budget and it has several divisions in it.
Systems budget: The operative services for general administrations like transport, customs, immigration, safety and medical assistance for athletics succeed under this budget.
Capital Investment budget: The private or civil administrations undertake the financing of particular ventures. The edifice of tournament outlets succeeds under this allowance.
Hosting the Olympics is not a susceptible task and it arrives with a hefty price of ventures. Many countries imply no attention in hosting the occasion reckoning about the obstacles in undertakings and insurance.
Usually, the nations who have investors and are inclined in boosting the technology of the nation put up with this as a recourse.
With a substantial portion of capital, the nation hosting the Olympics obtains undisputed recognition. Around 880 million USD will be subsidized for the 2022 Olympic Winter Games.
What was the cost of Tokyo Olympics?
The cost of the Tokyo Olympics was $15.4 billion.
Do Olympians get paid?
Yes, In the Tokyo Olympics the athletes were rewarded $20,000 for gold, $15,000 for silver and $10,000 for bronze.
Which was the most expensive Olympic ever held?
Sochi Winter Olympics was the most expensive Olympics which a total cost was $51 billion.