Or maybe it’s a bit of both. To this day, the concept of hosting the Olympics has been somewhat of a privilege, constantly depicted as a bidding war of sorts between countries. Typically you’ll see a country out there already campaigning for the next Summer Olympics!
Why? There’s prestige behind it. But get this….
It Costs Major Money to Host
I mean to overstate it as much as possible. I’m talking major money. This year’s Summer Olympics in London reportedly cost an astronomical $12 billion to undertake. Seems like a lot? Not nearly as much as the $40 billion China had to pull in for the 2008 Summer Olympics.
So it makes you wonder…. Do countries profit from hosting the Olympics? Or do they take a much-needed direct lending approach to handle all that debt?
Some Statistical Factors to Keep in Mind
The financial outcome differs from country to country, essentially. Total expenses and itemization, not to mention paying for athletes to train and compete, can get quite high in cost to host the Olympics.
What offsets that? There are a number of factors that could be taken into account:
- Crowd Control and Security
- Broadcasting Rights and Ticket Sales
If a country is saddled with the necessity to build extra structure to house the festivities and competitions, that’s a huge charge (and also a reason why a particular country would venture into bidding for the Olympics as early as immediately after the last edition of the Olympics).
However, if a lot of the structures have already been built and ready to go, it cuts down the cost tremendously.
Moreover, there’s the prospect of security and crowd control measures. If a country has to outsource some of the personnel, that can cost some money. If the personnel are already there for many of the establishments available, you’re looking at minimal expenditures.
When a country ends up receiving broadcasting rights and a healthy percentage of ticket sales, too, that can gain back some of the investment on a huge scale, particularly if the Olympics has been marketed and advertised well, raking in many viewers and guests to competitions from all over.
So it all depends on the resources of the country in question….
Canada, of course, ended up in major debt after hosting the 1976 Summer Olympics, finally paying off all that debt in 2006, 30 years later. That’s a lot of time to pony up a ton of dough!
However, when the United States hosted the Summer Olympics in 1984 with the city of Los Angeles, California, helming the festivities and competitions, the event raked in an unbelievable $222 million through residual income related to ticket sales and media rights, offsetting the already unearthly cost of $546 million for the entire thing. Even after the Olympics ended in 1984, Los Angeles, California, was well on its way to covering all those costs, and then some, resulting in eventual profit.
Profit as a Cherry on the Top, Not the Whole Cake
This will then lead anyone to believe that profit’s not the main reason (maybe not even a reason at all) for hosting the Olympics. Some countries may be poised to consider loans and lending on a regular basis when figuring out if they can host the future Olympics.
The main reason is simply for the prestige. If they land a profit, great. But the joy in hosting the world’s games where countries come together is, in itself, a tremendous profit. Especially when the country’s best gets their fair share of gold medal athletes to honor the nation.
Understand this, though: for all of us to come together in such a momentous occasion, it does require a lot of hefty money to finance all things, such as construction of arenas and auditoriums, athlete training, athlete promotion, festivities, etc. etc.
But it’s worth it. When you see pride and joy in a nation representing, it’s all worth it.