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Rising Cost of Olympics Begs Question: Why Host?

Rising Cost of Olympics Begs Question: Why Host?i
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February 04, 2014
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, VOA’s Brian Allen explores the benefits and pitfalls of hosting an Olympics.
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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, RussiaSochi, Russia
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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.

  • Russian speed skaters train at the Adler Arena Skating Center ahead of the 2014 Winter Olympics in Sochi, Feb. 5, 2014.
  • Russia's Tatiana Volosozhar and Maxim Trankov practice their routine at the figure stating practice rink ahead of the 2014 Winter Olympics, Feb. 5, 2014.
  • A woman poses with the Olympic rings in Olympic Park as preparations continue for the 2014 Winter Olympics, Feb. 5, 2014.
  • Hidenari Kanayama of Japan completes a training run in the men's luge singles ahead of the 2014 Winter Olympics, Feb. 4, 2014.
  • Canadian short track speed skaters and brothers Charles and Francois Hamelin watch a replay of their training on an iPad at the Iceberg Skating Palace, Feb. 4, 2014.
  • A Russian security forces K-9 officer patrols with his dog near the finish area of the Alpine ski course ahead of the 2014 Sochi Winter Olympics, Feb. 4, 2014.
  • Rosa village is seen from a gondola prior to the 2014 Winter Olympics, Feb. 4, 2014.
  • Olympic workers ski through a tunnel on the way to the Alpine ski course ahead of the 2014 Sochi Winter Olympics, Feb. 4, 2014.
  • A competitor takes a jump past a giant matryoshka doll during a Snowboard Slopestyle training session at the Rosa Khutor Extreme Park, prior to the 2014 Winter Olympics, Feb. 4, 2014.
  • U.S. snowboarder Ryan Stassel takes air off a jump during slopestyle snowboard training at the 2014 Sochi Winter Olympics, Feb. 4, 2014.
  • Speed skaters from the Netherlands train at the Adler Arena Skating Center ahead of the 2014 Winter Olympics in Sochi, Feb. 4, 2014.
  • Players from the Swedish women's national ice hockey team take part in a training session at the Shayba Arena in preparation for the 2014 Sochi Winter Olympics, Feb. 4, 2014.
  • An Olympic worker overlooks the Caucasus Mountains from the Alpine ski course ahead of the Sochi 2014 Winter Olympics, Feb. 4, 2014.

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Comment Sorting
Comments
     
by: Gennady from: Russia, Volga Region
February 04, 2014 7:50 PM
The staging of the Sochi Olympics is an example of absurd extravaganza, "the feast at the time of plague", the straw that broke camel's back in impoverished outdated Putin's Russia on the brink of economic and financial collapse with national currency plunging into many years' low.


by: Bill from: Canada
February 04, 2014 7:42 PM
Perhaps it is time to award the Olympics to one site for two successive periods, so that the cost could be spread over two games. The other alternative would be to build a "permanent" site.


by: ashley macisaac from: canada
February 04, 2014 7:38 PM
They r wonderful events..however when people.have this money to spend..why is anyone.ever starving in this world?

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