Accessibility links

Rising Cost of Olympics Begs Question: Why Host?

  • Brian Allen

With the Winter Olympics beginning this week, the world’s attention is turning to Sochi. But when the athletes and tourists leave, Russia will have spent more than $50 billion to stage the games. As the costs soar, it is worth noting the benefits and pitfalls of hosting an Olympics.

When the Olympic flame arrives in the seaside town, all eyes will be on seven brand new facilities along the coast, and a new, world-class ski resort in the nearby mountains.

For 17 days, the world’s best winter athletes will dazzle and inspire.

But when the last medal has been handed out and the closing ceremony is over, Russia will be left with a monumental problem: paying off the most expensive Olympic Games in history.

The issue of exorbitant Olympic expenses is nothing new. The 2004 Summer Games in Athens cost an estimated $11 billion, partially contributing to the country’s on-going debt crisis.

Sochi, Russia

Sochi, Russia

Spending soars

The 2008 Summer Olympics in Beijing, believed to have cost about $40 billion, included construction of the mammoth Beijing National Stadium - nicknamed the Bird’s Nest - which now sits mostly unused.

Six years later, the cost to stage the Sochi Games is estimated to top $50 billion.
Given the skyrocketing costs of the Olympics, the question is: why host?

Bob Sweeney, who leads DC2024, a group aiming to bring the 2024 Summer games to Washington, D.C., said, “Great cities gotta do great things, and this is the greatest of great things in the sports world.”

Lisa Delpy Neirotti, a professor of sport management at George Washington University, explained that hosting is about more than money.

“For each host city and each host country, they have their own objectives - what are they looking to get out of it? So for Sochi, they wanted to build a first-class ski resort, and to let people know Sochi is part of Russia, and that it is a summer and winter destination," she said. "For London, they wanted to redevelop the East End. When New York was bidding, it was primarily to get a new stadium for the [NFL's New York] Jets and Giants [American football teams]. They knew this would be the catalyst to get it built, and there would be some funding coming in. Every country and host city has a reason for doing it, and they aren’t all the same.”

Delpy Neirotti added that determining the actual cost of hosting an Olympics is difficult to quantify. She estimated the actual cost to put on the games is "only" about $3 billion, and includes expenses such as transportation and security.

“That, unto itself, is paid mostly by Olympic sponsorship and broadcast dollars. The other additional amounts that are being thrown around, that’s all civic development," she said. "Think about the four-lane highway that went up to the mountains, or the high-speed train, and the seven new venues that are in an area of Adler that never existed before. If you didn’t have to build all of that infrastructure, your Olympic budget would be very reasonable.”

Strategic planning

Furthermore, Delpy Neirotti said the Olympics do not necessarily have to be a huge financial burden - as long as host countries plan ahead appropriately.

“Often time you receive money that may have been slated for 10 years in advance, and you move that government money up," she said. "I think if you do it right, you don’t have to outlay that cash. You can secure it from sponsors, the broadcast rights, and money that is earmarked for the community at a future date.”

She added that the onus is on the IOC to select the candidate city with the most responsible plan.

“The International Olympic Committee needs to take a closer look on analyzing the corruption factors, the quality of life factors, and really understand that even though a country may say, 'It’s great. We can do it. We want it,' is it really good for the International Olympic Committee to burden this country with this responsibility," asked Delpy Neirotti.

Sochi, she said, is not an example of “hosting the right way.”

“Sochi is an outlier. It’s very rare that the International Olympic Committee gives a Winter Olympics to an area that doesn’t [already] have a ski resort,” she said.
The 2016 Summer Olympics in Rio de Janeiro are projected to come in at $14 billion, far less than the summer games in Beijing and what Russia has spent for Sochi. Traditionally, however, these early projections increase right up until the opening ceremony.

Show comments