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The Economy of the Olympics

Is the Money Involved with Hosting & Advertising the Olympics Really Worth It?

Preparing the Host City

Hosting the Olympics is a pricey proposition. 

The British government originally pegged the cost of the London Olympics at about $14.5 billion, but more recent reports estimate costs could hit $20.2 billion. This price tag, funded by a mix of private contributions and taxpayer money, includes the cost of building new competition venues, constructing athlete housing and paying for security. 

And there's no guarantee the investment will yield future returns, as it can often be difficult to keep the large-capacity, specialized facilities in use after the games. The striking Bird's Nest stadium from the 2008 Summer Olympics in Beijing cost $480 million to build and another $11 million per year to maintain, yet has no regular tenant. Eight years after the Athens Olympics, many of the venues built for that even have fallen into disuse and disrepair as well.

"As you watch the London Olympics unfold, be assured that the euphoria that ends with the Closing Ceremonies will quickly be replaced by the harsh reality that comes with paying the bills," said John D. Macomber, a lecturer in business administration at Harvard Business School, in a release last week.

 

  • Sarah Shemkus

    Sarah Shemkus is an award-winning freelance journalist, marketing enthusiast, accomplished baker, occasional globetrotter and total nerd (with a particular fondness for spreadsheets). Most recently, she reported on business and real estate … Read more...