The Financial Side of the Olympics

Most likely, by the time you will have read this post, the Olympics will have ended. The Olympic flame will have burned out and we will have to wait another four years for the next Winter Olympics.  However, next Summer Olympics are being held in Rio De Janeiro, Brazil in 2016.

Cost of Olympics

Let’s be honest. Despite all the excitement, patriotism and awesome physical feats, the price tag associated with the Olympics is pretty darn high. Wait, that seems like an understatement.  The price tag for the Olympics is astronomically high, especially with the latest one in Sochi.  These Olympics cost a cool $51 billion.

$51 billion. WOW.

The 2014 Winter Olympics are the most expensive Olympics in history. Not too far behind though are the 2008 Summer Olympics held in Beijing, China.  It cost the country $44 billion to host these games. It almost seems that while there is a budget proposed for the Olympics, the reality of the costs doesn’t seem to sink in until after the games. It’s all glitz, glam, no guts, no glory. Let’s make this a memorable event that people will be talking about for years.  It’s like the country is having an over the top wedding and elite athletes are invited to take part in the festivities while the rest of the world is watching.

Don’t get me wrong. I’m not a party pooper. I enjoyed watching the opening ceremonies (although I always find them quite long, like the Oscars or the Grammys). I get excited when someone from Team Canada wins a medal.   I enjoyed watching the speed skaters race around the track, the snowboarders hit the half-pipe and the downhill skiers hit the slopes. I especially enjoyed watching Canada beat the US in men’s AND women’s hockey. No offense to our great neighbours to the south, but hockey is OUR GAME. J

I just think that the financial side of the Olympics isn’t as carefully monitored as it should be.

While it is a hefty price tag to pay, so many countries join the line in the bid to host the games. Some have done it more than once and will make a bid to do it again. Possible reasons could be to bring more tourism to their country and provide a reason to improve its existing infrastructure.  It is a long drawn out process to design and build the facilities that will host the events. Let’s not forget the accommodations needed for the athletes, coaches, media and spectators.

While many games have produced a profit from the Olympics, there are some cities that have wound up with a deficit that has taken many years to pay off. And some host cities only break even. When you think about how much time, money, resources and effort goes into the Olympics, that same time, money, resources and effort spent could have been used to help improve things such as health care, education and poverty

Speaking of costs, what about the Olympic athletes themselves? Unless you’re in a popular professional sport such as hockey or basketball, you won’t be making millions. According to Moneyramblings.com: “Olympic athletes do earn a small stipend ($200-$2,000), and many of your expenses are reimbursed such as travel, hotels, and training camps. Your clothes will also be provided by the official sponsor: Hudson Bay Company in Canada.”

While many countries give a cash incentive if the athlete brings home a medal, it’s still not enough to make a living. It’s the sponsorships that help bring in the big bucks. Have you noticed when watching commercials that almost all the athletes featured are high performing, famous ones that have won medals in the Olympics or world championships? They are the ones that people remember and will recognize. I am well aware that ALL athletes train extremely hard, (The amount of hours they train in a day is more than I do in a week!!) make many sacrifices and are very dedicated to their sport, but unfortunately nobody remembers who came in 10th, 15th or 20th place.

It’s amazing how sometimes hundredths of a point, second or a metre can determine the difference between first and second place or the difference between taking the last spot on the podium and not making it to the podium at all.

 

Is it fair for professional athletes to compete alongside with amateur athletes in the Olympics? Do you believe too much money is spent on hosting the Olympics?


24 thoughts on “The Financial Side of the Olympics

  1. They were trying to get the 2016 summer games in Chicago. No one wanted them here because of the price tags and the estimated raise in taxes that we would have to pay. Plus, it displaces many people (especially low income) to make way for the Olympic villages and adds infrastructures that do not get utilized. I wish there was a more sustainable way of doing it.

    • I’ve been to Chicago before a few years ago. It was the first road trip my partner and I took together.
      Sometimes I wonder if the city council wants to host the Olympics more than the actual residents themselves.

      I’m surprised the IOC hasn’t been working on trying to find a more sustainable to do so.

  2. Hosting the olympics is generally a terrible financial move for the host city/country. The debt racked up from the 2004 Athens games was a big contributing factor for the financial crisis that country has landed itself in over the past few years. Even with these Sochi games, Russia was apparently very short sighted in what would happen AFTER the olympics with most of the new buildings and hotels they spent billions on. Chances are most will sit empty for years to come.

    I don’t have a problem with pro athletes competing along side amateurs. At least here in the states, most “amateurs” in the olympics get several endorsement deals and things like that leading up to and after the olympics. There are some countries that have even started paying athletes for winning medals. I think the financial aspect of the games is just something we have to live with in that regard.

    • You’re probably right about the new buildings and hotels. Considering with what is going on with Russia and the Ukraine, I highly doubt that Russia will see a boost in tourism anytime soon. Although Sochi does look like a nice place to visit. I always pictured Russia with nothing but snow almost year round.

      Regarding amateur athletes, I’m not sure I can say the same about Canada. I felt the only ones who got endorsement deals were the medallists. I’ve always felt that the US were more supportive of their athletes and put more effort toward professional athletics, which explains why a lot of Canadians athletes go to the US to play their sport, due to the abundance of US athletic scholarships.

    • Have you seen pictures of the Sarajevo 1984 games sites? It’s crazy how incredibly abandoned it all has become. You’d have to really plan to make sure your facilities saw use after the games, especially for the winter olympics.

  3. I agree, the Olympics can sometimes lead to financial disaster. For the 2010 Olympics in Vancouver there was a lot of projects created due to the Olympics but also a ton of debt. The games were great for those who could attend but I still think the money would’ve been better spent elsewhere

    • I’ve often wondered about the facilities built for the not so popular events such as luge and bobsled. When I say not so popular, I mean not that many people take up the sport. I suppose they can be used as training facilities for existing and future Olympians, but it may be costing them a lot more money just to keep it running.

  4. I think it’s crazy how much money is spent on the Olympics to host. These cities/countries build up all of these state of the art buildings and then rarely, if ever, use them again. I read a story once where many of the times, the country that hosts the Olympics ends up losing money on the deal because of the costs associated with everything after the Olympics are over. I love watching them too, I would just never want my city to spend that kind of money to host them. We have much bigger issues that the money is needed for.

    • Exactly. It’s seems like it’s never in the million dollar range, but in the BILLION dollar range. Perhaps they should look into getting famous billionaires such as Warren Buffett, Bill Gates and Mark Zuckerberg to help contribute. Or if we want to stick with athletes, maybe some of the NHL players should pitch in. Several hundreds of thousands of dollars wouldn’t hurt them.

  5. I think the Athens 2004 Olympics were the worst in terms of the impact and the waste. They showed multiple venues, a couple of years later, that were abandoned. Many Olympics since have taken that lesson to heart and have built facilities with a purpose in mind for what it will do after the Olympics, or work hard to utilize existing facilities where possible. I wonder if this lesson might have gotten lost a bit with Sochi, as, at $51 billion, it seems hard to imagine coming close to recouping that investment for a resort town. At least Beijing and London had their facilities in the middle of major cities, where the expected re-use was more favorable.

    • I agree, it does make more sense to host the Olympics in major cities, rather than smaller cities/towns. I’m actually going there in May for a vacation. I’m curious to see what their facilities look like as well as the site where the first modern Olympics were held (if it still exists.

  6. I don’t mind some money being spent to spruce things up like building some accommodations for athletes and maybe some hotels, but why all these new stadiums. Shouldn’t that be a factor for bidding cities…like how much they already have? And I think after China’s unbelievable opening ceremonies, people now feel they have to top it (which personally I think would be hard to do). Maybe it brings in more money in the long run?

    • It seems as if hosting the Olympics in general have to be bigger, better and costlier than the last. Funny, the actual Olympic motto is citius, altius and fortius in Latin. Translated it means: faster, higher and stronger. I’m wondering if the new motto should be the former. “Biggerus, betterus and costlierus”.

      I do appreciate the effort of the opening ceremonies though, especially from older, influential countries such as China, Japan and Russia. They have so much history and such an interesting culture.

  7. That seems like an exorbitant amount of money for the Olympic games – cities could spend that money improving their existing infrastructure. And you’re right, unless you come in first through third place, no one knows who you are. Hopefully the athletes that come in 10th, 20th, etc. still are offered sponsorship deals to supplement their expenses. I have to admit that I really don’t watch the Olympics any more.

  8. Being an Olympic athlete is a bit like being a actor, musician, etc. It can take lots of sacrifices, long hours, hard work, etc. In the end, only a small fraction of a % ever make it big. The payoff for the Olympians who do well (and get those sponsorships) can be astronomical. For everyone else, well, you’re doing it for the love of the sport!

    • I think to really become successful with anything, it takes lot of sacrifices, long hours and hard work. But as you said, some people simply compete for the love of the sport. As long as you have the passion for it, the sacrifices, long hours and hard work seem worth it.

  9. I was excited to watch the opening ceremonies and the first few events, but as the days went by, I actually started to get sick of watching it. Until the final rounds leading up to the gold medal hockey games for the Canadian men and women. 🙂

  10. I was thinking about this myself, because it is such an enormous amount of money that’s spent. It is often such a financial strain on the countries hosting and they create a whole new infrastructure for the games, but I don’t think they get it back in tourism like they are hoping. My concern is that the bar just keeps getting set higher and each country has to spend more to out-do their predecessors.

  11. I’ve thought about this topic as well. Over $50 billion is quite a bit for such a short-term event.

    One thing that I find interesting is the pictures one can easily find online about past olympic venues. Many of them are simply not used, and have fallen into what appears to be a state of disrepair. Makes a person wonder how we can spend so much money on facilities that are only used for such a short period of time, when there are so many people less fortunate with next to nothing.

  12. It’s insane so much is spent, because if you look at the olympic venues of years past, they are in shambles and disrepair now. Every country just wants to be able to show the world how great they are for 2 weeks. It’s not like that money could be better spent elsewhere, right?

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