Summer becomes most missed when winter arrives at the doorstep. As Canadian winter steadfastly approaches with increasingly freezing mornings and howling winds, I cannot help but cast my thoughts lovingly back to summer in all its sunny, ripe warm glory. Out of the memories, one event glows exceedingly bright. Whether a sports fan or not, everyone can probably agree that one pinnacle of summer 2024 was when the entire world shifted their gazes to the City of Light, Paris itself – more luminous than ever for its hosting of the 33rd Olympic Games.
The Olympics isn’t unaccustomed to raving publicity. From widespread ads, to media hype, to the national pride tied behind each country's team, even those most uninterested in everyday sports are motivated to turn on their screens for the excitement and conversation. The past two summer Olympic Games, Rio and Tokyo, had attracted over 3 billion viewers worldwide. For NBCUniversal, which owns USA Olympics streaming rights, that translates to USD 1.76 billion of streaming revenue, of which USD 1.25 billion comes from advertisement deals. According to its spokesperson, the record was more than smashed in Paris 2024. Olympic broadcasts achieved a total audience delivery of 30.6 million viewers – an 82% increase from Tokyo. Digital revenue doubled to 5% of all advertisement revenue, and is projected to grow to 40% by the LA 2028 games.
However, outside of the flurries of the internet, the big bucks lay in the masses of physical business activity sparked by the hosting of the Olympics. The 2024 Olympic and Paralympic games saw the sale of a record 12 million tickets, 9.5 million of which are Olympic tickets – occupying up to 95% of all venues’ maximum capacity. This in itself brings organizers more than 1 billion EUR in estimated revenue. On top of ticket sales, tourism, and related spending were expected to flourish as millions rush to attend the games. The French tourist office estimated 15.3 million visitors for the Olympics and Paralympics, for which the Olympics take up 11.3 million. Similar to predictions, while the Paris hotel industry saw rising prices year-by-year, weekly revenue per each available hotel room still saw a 206% year-over-year growth in the first week of the games. According to the International Olympic Committee (IOC), independent studies have estimated Paris 2024 to generate 6.7 to 11.1 billion EUR in economic benefits around the Paris region.
Whilst Paris 2024 appeared to be a glittery tale from many angles, one glance at the Olympics' historical performances immediately cast some shadows on the shiny estimates. Ever since the 1970s, hosts of the Olympic Games have rarely been able to make a profit from the event. The only city managing to walk away with an operational surplus was Los Angeles in 1984, which will be soon be challenged by the games’ anticipated hefty costs in 2028.
So what exactly makes the Olympic Games so expensive?
First comes bidding. Simply hiring consultants to draft a pitch to the IOC consistently costs countries anywhere from 50 to 100 million USD – with no guarantee of the bid landing.
What’s more daunting is the infrastructure costs that arrive after a secured bid. With over ten thousand athletes expected to compete in hundreds of events, most countries must scramble to invest in the creation or upgrade of high-capacity, specialized sports facilities such as the Olympic Village, sports arenas, or stadiums for ceremonies. We must also add in the cost of general infrastructure: roads, train lines, and airports which often need to be updated, and in the case of Rio, a 5 billion BRL investment to build new hotels to accommodate incoming tourists. The costs of these infrastructures can range from 5 billion to 50 billion USD, often throwing cities into debt for years to come.
While a budget was designed beforehand with the intent to keep costs in tack, no Olympics have come under budget since 1984, with five of the past six Olympics reporting cost overruns of over 100%. In the case of the past Paris games, France was estimated to have funneled over 10 billion EUR into the games despite a budget of 8 billion. Yet, this is still a far better outcome than Sochi 2014, when the Winter Olympics spiraled to a price of 55 billion USD versus a 12 billion USD estimate. Perhaps more worrisome is the impractical nature of most newly built facilities post-Olympics. Beijing’s “Birt Nest” stadium cost the city 10 million USD a year in maintenance fees, and sat mostly unused after 2008. One cannot help but question whether Paris’s new Aquatic Centre – with a cost of 190 million USD – will arrive at the same fate.
Whilst the Olympics games expand in extravagance and popularity, their economic sustainability seem to continue down a wobbly route. The IOC continues its effort to strike a balance between expenditures and sustainability, but we can look toward LA 2028 for the beginning preparations for a hopefully cost-efficient event. The world loves sports, so hopefully, the Olympics will utilize this sport-mania to achieve broader development, rather than continuing its fixation on cash-burning festivities.