The Olympics: The Bad Investment Of The Sporting World 
Posted 25,July

By Chaveendra Dunuwille

In International News

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The pandemic has caused many events around the world to be postponed or even cancelled. Such was the case for the 2020 games, the pandemic spread and the organizing committee made the tough decision to postpone the games amidst mounting financial burdens. Now with the games officially kicking off one must wonder what’s next 

From a Sri Lankan point of view organizing the Olympics is a fantasy that one can safely say would never become a reality. From its humble beginnings in 1896 the Olympic Games have transformed into a worldwide sensation with it being considered the ultimate sporting event. And this summer for the next 3 weeks Japan will become the envy of the world as billions tune in as their nations 

athletes compete for a place in the podium. 

However for all its glitz and glamour one must not forget the effort and cost a nation must endure to truly organize a successful Olympic games. The event divided primarily as the summer and winter Olympics take place every 4 years, over the last 50 years the summer games have gone significantly over budget compared to its winter counterparts with the exception of Sochi 2014. 

To successfully organize an Olympic Games the cities must take part in a bidding procedure where officials from the International Olympic Committee (IOC) decide on the feasibility of organizing the games in the city. The advertising process in itself is a costly and lengthy process with planning taking almost 10 years. For the 2016 games Chicago spent over $100 million on its ad campaigns only to lose to Rio. 

The games were organized in the 20th century with the goal of improving the local economy and earning profits. The best example of this was the 1984 Los Angeles Olympics, the games gave LA a surplus of $215 million. Furthermore in the 90’s the IOC only claimed 4% of the total revenue from the games, the claim by the IOC has steadily increased over the years and by Rio 2016 the IOC was privy to 70% of the games revenue. This may be one of the reasons nations continue to drop from the bid to organize the games as while there were 12 cities that bid in 2004 this number was reduced to 5 in 2020 and only 2 cities have bid for the 2022 winter Olympics.

Organizing the games is no easy task as the winners must build the Olympic Village which would cost between $1.5 billion – 3 billion, 35+ sporting venues for the various games, television production facilities for broadcasting the games, ceremonial spaces, green spaces and transportation facilities for the athletes. 

Most of the buildings are temporary constructs intended to me disassembled after they have served their purpose during the games. 

There is a separate set of constructions which are referred to as ‘Legacy Builds’, these include roads and other infrastructure that are to be used by the general public long after the games have concluded. The idea of these legacy builds is to show that organizing the games increased the general living standard and economy of the city. The best example of an effective ‘Legacy Build’ is the Montreal Metro System built for the 1976 Montreal Olympics. But not all ‘legacy builds’ achieve this level of success as clearly seen by the Rio Olympics. 

The estimated cost for the Rio Olympics was around $20 billion and the facilities such as the gymnasium and swimming complexes were maintained for some time, however with its costing over $30 million for maintenance these complexes were abandoned and now are shells of their former selves. The decay of these complexes can result in significant environmental damage and a drop in revenue as the locations these complexes have been built on are considered as prime real estate. 

Tokyo 2020 is considered as the most expensive Olympic ever organized. Initially when Japan won the bid in 2013 the estimated cost of the games was $7 billion. However by 2021 the cost has inflated to over $30 billion. The Tokyo Olympics will consist of 43 venues in total and the road to the games were plagued similar to its predecessors. 

According to the expenditure report released by the Olympic committee for the 2020 games state it will cost $3.2 billion for the construction of permanent fixtures and a total of $3 billion for the construction of temporary/overlay facilities. The energy cost has been estimated at $400 million while transport expenditures were reported at $500 million. Security, Technology, Games operations, General affairs & communications, marketing and other expenses have been reported as $900 million, $1 billion, $1 billion, $600 million, $1.2 billion and $800 million respectively. 

However these with factors such as the shortage of labour and raw materials in Japan as well as the spread of Co-vid 19 the costs surged. Note that when construction began the cost for the gymnastics sector was $81 million by 2019 the cost was over $200 million. While Japan is not exactly the new kid on the block when it comes to organizing Olympics but with the unexpected situation created by the pandemic one can only wonder how the nation intends to generate more revenue. 

The Olympic committee seems to have taken note in the change in attitude towards organizing the games. Seeking to tackle financial issues resulting from the games they introduced the Olympic Agenda 2020 which highlights cost concerns and attempts to address these as well as making recommendations for more economic and sustainable games. The threshold of success for the modern day Olympics would be the Los Angeles games. However what we must take into account is that since Los Angeles was the only city that stayed in the race they were able to negotiate more than the others thus allowing for a more lucrative games. 

Furthermore what sets LA apart from the rest of the Olympics is the fact that they had the necessary infrastructure in place while other countries only began to construct for once the bid winners were announced thus resulting in the later abandoning of facilities once the games have concluded. Experts have also suggested that the committee consider one fixed location for the rest of the future games but the Olympic committee is not too keen on implementing the idea. 

For the time being the bidding process has been taken off as France and Los Angeles have been selected for the 2024 and 2028 summer games respectively. Despite the large amounts of capital that is required for organizing the games it is still beloved by billions all around the world. The allure of national pride hold strong, take into to account not even Nazi Germany wanted to pass the opportunity to organize the games. However with the new perspectives only time will tell as to the future of the Olympics and how nations hope to handle this monumental undertaking in the future.