In recent years, the Olympics have failed to meet their expectations in terms of economics. With major cost overruns, host cities have not been able to allocate for unexpected liabilities. Olympic host cities spend a lot of money on three specific categories. Host cities spend money on infrastructure, which is construction of housing and roadways, Olympic venues, such as aquatic facilities or stadiums, and operational costs which can be associated with ticketing and security for the events. Additionally, the IOC has requirements that the host city must meet. For example, the IOC requires host cities have at least 40,000 hotel rooms available for tourists, athletes...etc. In the case of Rio de janeiro, 15,000 rooms needed to be constructed. …show more content…
Moreover, cost overrun is found in all Games, without exception; for no other type of mega-project is this the case. 47 percent of Games have cost overruns above 100 percent. The largest cost overrun for Summer Games was found for Montreal 1976 at 720 percent, followed by Barcelona 1992 at 266 percent. For Winter Games the largest cost overrun was 324 percent for Lake Placid 1980, followed by Sochi 2014 at 289 percent.” (Flyvbjerg).
The mega-overrun of the Montreal Olympics left the city paying off its debt for nearly thirty years (Covert). Due to the fact the Olympics are hosted every two years, this debt is impacting a large number of cities. But Olympic cost overruns are nothing new. In the modern Olympic era, cost overruns can be dated back to the 2004 Athens Olympic Games. The games, originally had an estimated cost of $1.6 billion, concluded with a cost of $16 billion, leaving along many ‘white elephants’ (Grabar). Sadly, these problems are not
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Many citizens of host cities find themselves displaced or homeless as a result of the games. In addition to that, their privacy and peace are abolished. During the construction of the venues for the 2008 Beijing games, an estimated 1.5 million people were forcibly removed from their homes and required to relocate to make way for Olympic venues. “Building new infrastructure in a city means destroying established urban areas. When that happens, local populations and communities are often dispersed and displaced.” said Bryan Clift, a journalist for CityMetric (Clift). In addition to displacement comes a lack of privacy. Following the 2013 bombing of the Boston Marathon and the attacks in Paris in 2015, security is extremely important in Olympic bid consideration. In a time where safety at mega-events is at the highest concern, cities attempt to take any security measures possible. “Planning committees have been burdened with the impossible task of preventing such attacks, by building security into the infrastructure, planning, organisation and practices associated with mega-events.” said Clift (Clift). This leaves many citizens feeling like their cities are being taken over as opposed to celebrating what the games have to offer. In a survey done following the 2008 Beijing games, only 11% of citizens supported the games (Zhang). The lack of support from the citizens creates
Siegfried, J., & Zimbalist, A. (2000). The economics of sports facilities and their communities. The Journal of Economic Perspectives, , 95-114.
Abstract: The Stadium construction boom continues, and taxpayers are being forced to pay for new high tech stadiums they don’t want. These new stadiums create only part-time jobs. Stadiums bring money in exclusively for professional leagues and not the communities. The teams are turning public money into private profit. Professional leagues are becoming extremely wealthy at the taxpayers expense. The publicly-funded stadium obsession must be put to a stop before athletes and coaches become even greedier. New stadiums being built hurt public schools, and send a message to children that leisure activities are more important than basic education. Public money needs to be used to for more important services that would benefit the local economy. Stadiums do not help the economy or save struggling towns. There are no net benefits from single purpose stadiums, and therefore the stadium obsessions must be put to a stop.
The Reasons Behind the Increasing Commercialism of the Olympic Games The Olympic Games is a world wide event, held once every 4 years. It is the most important event amongst the elite athletes of today. It is viewed on television by billions of people across the world, by satellite transmission (started in Tokyo in 1964). This worldwide viewing attracted sponsors as they realised that by supporting the Olympics their product would be advertised on every product sold, as they would be the 'official sponsor'. The advances in technology has played a fundamental role in the increase in commercialism, as large sums of money are put forwards for television rights over the Games from companies such as Sky, the BBC and ABC.
Billions of dollars are spent by millions of people watching these events and expecting greatness from their school’s athletes. People give little thought to why they paid group A for group B’s talent. Athletes do not have time to give the people greatness and earn money in another fashion while maintaining a high academic profile. Athletes are seen more than any other person on any given campus. Athletes are being exploited. Running out of time is one thing, but running out of money to feed yourself and purchase necessities is much different. Major college athletes are running out of everything and there is a simple solution, pay
Close, Paul, David Askew, and Xin Xu. The Beijing Olympics the Political Economy of a Sporting Mega-event.. Hoboken: Taylor & Francis, 2006.. 34-35
In order to host the event Atlanta had to make sure it had all the facilities to be able to provide athletes places both to practice and perform. Although the city had fairly adequate facilities already, there were improvements that needed to be made. By making sure facilities were up to scratch for the athletes, they were also improving facilities for citizens, because ultimately once the Olympics were over, these new and improved facilities would still be there.
With over two hundred countries participating, the Olympic Games is easily considered as one of the largest multisport event known to history. The Olympics are held at a different country, and even more rarely at the same city. For a country to be chosen to host the Olympics, the country’s National Olympic Committee (the country’s representatives for the Olympics) nominates a city (from the country they represent) that they think has potential in hosting the Olympics nine years prior to when they wish to host the Olympics. It is a two year process that consists of: Application Phase, Candidate Phase and the Election of the Host City. The country that wins the election is given seven years to prepare for the Olympics. (International Olympic Committee, n.d., p. xx-xx) The hosting country expends billions of dollars, usually money they don’t have, preparing for the Olympics. Then the question is raised 'why would a country go through so much trouble and spend an outrageous amount of money to host this event?' Throughout this discussion paper it will address all the pros and cons for a country to host the Olympics. It will also see if a smaller sports event can produce the same benefits the Olympic offers with less cost and risk.
One may disagree that hosting Olympics is not worthwhile as it requires a city or a country to bring out an enormous sum of money for the preparation and planning of hosting the Olympics. Zimbalist (2012, pp. 116) says that the summer Games roughly generates a total of $5-$6 billion and almost half of it belongs to the International Olympic Committee. On the other hand, the cost of the games has increased roughly
Many people would question if the cost of the Olympics is worth it. Billions of dollars are used to make the Olympics what it is, and a lot of money is spent on manufacturing medals, and building arenas for the sports events. The arenas also require lots of money to maintain during the Olympics, as well as afterwards if they are to be recycled as sporting event centres. Housing for the athletes also takes quite a few million to create, even though they are only used for athlete housing for a couple of weeks. So much money was put into things like accommodation, but there were many complaints from everyone residing there that most parts of the building were incomplete or malfunctioning. The 2014 Winter Olympic Games in Sochi’s original budget was twelv...
The salaries of athletes are extremely high for the effort that they put through. For example, basketball, baseball, and hockey athletes only compete for about 6-8 months a year. Then they have...
Bissinger states in his essay that local high schools these days are spending millions of dollars on things such as elaborate stadiums, gymnasiums and even chartered planes to transport their team to big play-off championship games. In the past, schools would sponsor fundraisers to RAISE the money for these t...
While sports for the spectators are merely entertainment, the economics of the industry are what drives businesses to become involved. Sports have become more of a business entity rather than an entertainment industry due to the strong economic perception of the over all industry. There are several instances in which economics may contribute to the effect on the sports industry, such as: the success of a team, the price of a ticket, the amount of money an athlete will make, and the amount of profit a team will make. The success of an...
In every major sports event, like the FIFA World Cup or the Olympics, there’s always a huge celebration and a positive vibes surrounding such events. Hosting these events are usually a great honor to the selected countries and bring a lot of favorable consequences with it. However, no one realized that whenever these big sporting events occur and are hosted, brings as much negative consequences which counterbalances all the good things that comes with it. So, the question remains, is the Olympics a Cash Cow or a Money Pit to the hosting countries? In my opinion, the Olympics could actually bring more benefit that loss to the selected countries to host it, which are to bring positive economic and cultural benefits, either a Legacy or a Money pit for the hosting countries, hosting this event could promote development for the educational legacy and finally eradicating poverty throughout the citizens.
It is a delicate and confusing situation. If the fans will pay for everything from the hats to the T-shirts, to the tickets to the hot dogs, the teams will generate more money. However, if that happens, come contract time athletes will demand for more money. If the athlete demands more money, the cost of tickets and memorabilia will go up.
Global events benefit regional, tourism and community development. Take for instance the Commonwealth Games and the Olympics. They both are events held globally that increase visitor’s expenditure and length of stay while improving destination awareness and increasing civic pride. Janecko, Mules and Ritchie (2002) explain events in small regional destinations are obviously beneficial and often play an important role in tourism development and thereby in regional development however, differ due to size and scale of the event. Global events create employment and increase labour supply, expenditures and even the standard of living. ‘As local economics have adapted to changing to global dynamics, the hosting of international events has become more commonplace and can play a significant role in local development, acting as a catalysts for jo...