What will the actual bill be? When it comes to considering the financial results of Paris 2024, the question is not whether the organization of the event will go over budget but by how much it will go over budget… In recent decades, projected cost overruns have become commonplace during the Olympic Games , both for the Summer and Winter Games. The difference between the organizing cities is in their ability to limit this additional cost, but also to generate significant income during the Olympic fortnight. Without forgetting the lasting positive effects both in terms of boosting economic activity and amortization of investments in infrastructures built for the occasion.
• Barcelona 1992
It is true that the Olympic Games in the Catalan city are one of the last editions of the 20th century, but the truth is that they brought the organization of the sporting event into a new era. Proof of this is its estimated final cost of more than nine billion euros compared to a provisional budget of 3,500 million euros.
Despite this extra cost of almost six billion euros, Barcelona is often cited as an example among the host cities that have been able to benefit from the organization of the Olympics. Twenty years later, the mayor Xavier Trias assured that the Olympics had “totally transformed” the city. And not in vain, the event has made it possible to reinforce Barcelona’s transport network while the facilities built or improved for the occasion have lasted over time. They continue to host important sporting events today, such as the new marina, the sports complex created from the old Estacio del Nord station and the Castelldefels Olympic channel.
• Sydney 2000
After Atlanta in 1996, the Olympic Games fully entered the 21st century era with the Sydney edition. If it did not escape the budget overflow, the Australian capital did not cross the line. The projected budget was slightly less than that of Barcelona eight years earlier, 3,000 million euros, while the final cost will have exceeded 5,000 million euros.
Sydney was the first city to include a green component in its offer and wanted to consolidate facilities within a 30km radius near the city centre. Although public spending did not suffer too much from the economic event, it ended up weighing on the accounts in the following years due to an infrastructure that was difficult to assess in the long term. In 2004, The Sydney Morning Herald revealed that the government was spending the equivalent of almost €30 million each year to allow the various sites to remain open.
• Athens 2004
It was a highly symbolic choice that echoed ancient history. With a budget of about 5,000 million euros, the Olympic Games in Greece will have finally cost double. But the damage will have been much more lasting for Greece, according to the IMF, which already mentioned, in 2010, sites “empty or little used, and [qui] they occupy precious land in this overcrowded urban center.” Even more evocative of the economic weight of the Olympic Games on the Greek economy, the IOC president at the time, Jacques Rogge, estimated that “between 2% and 3% of the debt of the country had increased due to the cost of the Games”.
Almost 20 years later, the Olympics are simply considered one of the factors that precipitated the country’s economic crisis. It must be said that the preparation for the event involved 57 large works, almost half of which were Olympic infrastructure, as well as three large projects aimed at improving traffic in the capital. Among them, a tram line, a commuter train and two metro lines. Likewise, many infrastructures have been abandoned and are no longer used today, such as the Elliniko stadium that hosted the fencing, handball and hockey events.
• Beijing 2008
Undoubtedly the Olympics of excess in the budget plan. For China, the 2008 Olympic Games had a great interest in soft power and the country spared no means to make it an unforgettable event. While the estimated budget amounted to “only” 2,600 million euros, the final cost skyrocketed to finally reach more than 30,000 million euros, an extra cost of more than 1000%. Public funds contributed 80% of this total bill.
On closer inspection, these maddening sums are actually not that surprising since Beijing took advantage of the event to build a third airport. In addition, the economic power of the country allows it to financially support a 90,000-seat Olympic stadium built for the occasion in a prestigious logic and which remains empty 15 years later. Today, only the 2014 Winter Olympics, held in Sochi, Russia, show more substantial spending, around 36 billion euros.
• London 2012
Although it is a particularly developed metropolis in terms of sports infrastructures, transport networks and tourist reception capacities, London has also far exceeded its estimated budget. It will increase from just 5,000 million euros to 11,000 million euros. The State, responsible for half of the financing advanced, undertook the construction of an Olympic stadium for the Olympic Games and rehabilitated an entire district of East London for the occasion.
However, the event in the English capital contributed heavily to the International Olympic Committee’s estimated revenue of €6.5 billion during the 2009-2012 period. A year later, a government study mentions significant indirect economic benefits, amounting to more than 11 billion euros thanks, in particular, to new commercial contracts, investments abroad or various sales. More than 30,000 jobs would also have been created. A 2015 study estimated that by 2020, the revenue generated by the event could exceed €50 billion.
The national economy also benefited greatly from the British Olympic Games, since 2,000 companies in the country signed 91% of the contracts offered by the organization in charge of bidding for infrastructure and equipment for a total of 8,700 million euros. Likewise, they were awarded 94% of the contracts related to the organization of the event. Finally, practically all of the 7,000 million euros in contracts linked to the Olympic park were won by companies established in the United Kingdom, mostly VSEs and SMEs.
• Rio 2016
The Olympic Games were especially anticipated in Brazil, a country where significant inequalities and economic difficulties persist. With an estimated cost of around 9 billion euros, making it the largest Olympic budget in history at the time, the event ultimately added 13 billion euros to the final word according to the Associated Press. A third part would come from expenses related to sports facilities and operating expenses, to which the US agency added expenses related to the construction of a metro line, an anti-doping laboratory, the remodeling of port facilities and cleaning from Guanabara Bay.
Over the 2013-2016 period, CIO revenue fell slightly to €4.8 billion. At the purely tourism level, Brazil registered an annual increase of almost 5% between 2015 and 2016 and an increase in revenue generated by visitors of more than 6% in the same period. The construction of hotels and residences has boosted the Brazilian economy while services have improved in health, education and social development. It should also be noted that local inequalities narrowed slightly in the years leading up to the Games, as the incomes of the bottom 5% of Rio’s inhabitants increased more than those of the richest 5%. However, in the long term, the Olympic Games in Brazil did not cure all of the country’s economic and social ills, which are still very present.
• Tokyo 2021
Delayed for a year due to the coronavirus pandemic, the Tokyo Olympics logically generated a budget overrun, the latter going from 5 to 12 billion euros. However, the IOC had come to block the construction of new infrastructures whose post-Olympic utility had not been proven, such as the rowing events. In detail, the Covid-19 prevention measures, in particular the screening of athletes, cost 246 million euros. Also, the cost of the national stadium was almost 200 million euros more than expected.
On the income side, those related to ticket sales have been greatly reduced due to the health situation that would have deprived the organizers of 632 million euros. Between the contribution of the IOC, the different sponsorships, the insurance compensation for the postponement of the Games and other sources of income such as licenses, more than 4,000 million euros have been generated directly in the coffers.
Source: BFM TV
