Inside the herculean and loss-making task that is hosting the Summer Games-Sports News , Justnewsday
Summer Olympics, a quadrennial event, is the grandest sporting spectacle in the world. It draws plenty in stadiums and on TV but still remains a massive loss-making venture for hosts.
The Olympics are the biggest sporting extravaganza in the world: a competition where dreams are fulfilled and shattered, a quadrennial event that catches everyone’s frenzy. Despite the attention, they get with packed stadiums and billions of transfixed audiences across the world, they’ve never made financial sense. Host cities spend billions in preparing for the Games right from the interest bid to the passing of the baton to the next hosts in more a case of ‘now it’s your problem’.
Average sports-related costs of hosting are pegged at $12.0 billion. Non-sports-related costs such as road, rail, airport, hotel, and other infrastructure, are typically several times that. Every Olympics since 1960 has run over budget, at an average of 172 percent in real terms.
It has led to governments running into massive debts; innovative measures to raise funds — Canadian govt. raised $15 million for the 1976 Games by selling lotteries to the public — amid spiralling costs. What’s left by the end of it are massive structures and stadiums that are too big to use for national events and not used frequently enough for internationals.
This year, it becomes an even bigger topic with Tokyo Olympics 2020 moved by a year due to the coronavirus pandemic. The postponement brought with it added upkeep costs for the venues. The strict COVID-19 guidelines have dealt a bigger blow with no foreign spectators allowed and very few domestic fans. Not only are the organisers and IOC losing in ticket sales, but the Japanese and Tokyo governments also lose in boosting the economy. Per estimates, absence of foreign tourists will result in an economic loss of 151 billion yen ($1.4 billion).
The loss of revenue aside, the costs of safety measures have added to the organisers’ woes and public — who foot the biggest bill — anger.
We take a look at the economics of hosting the Summer Olympics.
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