News / USA

Big Sports - Big Cost

World sporting events such as the Olympics and World Cup require billions of dollars of investment and years of planning. But do the investments pay off, helping the local or national economy?

Vancouver's Olympic Village at night
Vancouver's Olympic Village at night

The 2010 Winter Olympics call Vancouver, British Columbia, home.  The 2010 World Cup takes place across South Africa in July.  These events attract hoards of spectators, bringing construction projects, jobs, money for businesses and tax revenues for local governments.  Countries compete fiercely to host such events.

But are these premiere sporting events usually a net benefit to the host country?  

"If you look at the economics of the large projects they fall into two categories," says Fariborz Ghadar of Pennsylvania State University.  "For example in the Olympics, you have the costs of actually running the operation, and then you have the costs of building the infrastructure to house it.  Generally, both of them are underestimated."

Ghadar cites this year's winter Olympic games in Vancouver as an example.  Originally, city officials estimated the costs of preparing for the games at around $2 billion.  However costs have already topped $4.6 billion, and may ultimately top $5 billion or $6 billion, according to Ghadar. 

"And on the benefit side, they (host cities) always seem to exaggerate the benefit.  In Vancouver they think they're going to make $9 billion, but in reality they will be very lucky if they even make $1 billion."

World Cup matches will be played in the new stadium in Durban, South Africa, February 2010
World Cup matches will be played in the new stadium in Durban, South Africa, February 2010

George Mason University's Tony Samara says it is not often clear how host cities calculate revenues from major sporting events, because bookkeeping can vary from one city to the next.  

"A lot of money is generated by private companies that have contracts either through the governing body or through the city," says Samara.  "For example, beverage concessions for tourism packages - those companies often are not domestic, so a lot of that money may actuallly leave the country."

Increasingly, the cost of security is a major issue that can offset, in a big way, financial gains an event might bring.  Notes Fariborz Ghadar.  "I mean for example, in Canada, the orginal estimate for security was $200 million.  But it's going to cost about $1 billion."

Huge sporting events are great for the local hotels, restaurants, retailers and construction firms.  And there is little doubt that world sporting events create jobs and a demand for skills, but construction employment related to building sports event infrastructure often ends once the games are over.

Recently South Africa was rocked by a nationwide strike, as some 70-thousand workers stopped constructing stadiums and buildings for the World Cup.  Tony Samara points out that workers there were unhappy with the labor conditions.  "(They were) asked to work in timelines, asked to speed up construction, which some felt made working conditions unsafe." 

Samara and Ghadar agree that in most cases, host nations are not likely to recoup the costs of events such as the Olympics.  Still, the Olympics and World Cup are widely prestigious events, and analysts say cities will continue to compete strongly to win the right to host them.

 

You can watch this, and all of Philip's "Money In Motion" reports here.

You May Like

Video Snowstorm Sweeps Northeastern US

'This is nothing like we feared it would be,' New York City Mayor Bill de Blasio says; he had warned storm could be one of worst in city history More

Millions of Displaced Nigerians Struggle With Daily Existence

Government acknowledges over a million people displaced in 2014 due to fight against Boko Haram insurgency More

Facebook: Internal Error to Blame for Outages

Temporary outage appeared to spill over and temporarily slow or block traffic to other major Internet sites More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid