Articles & Publications
The economic impact of the Olympic Games
“Hosting the Olympic Games has a positive impact on the country’s economy, giving a powerful boost to exports, according to academic research – but the benefits are just as strong for unsuccessful bidders”.
Heather Stewart – The Guardian, London – 14 April 2009
“The Olympic Games are the centerpiece of the Olympic Movement. They are a spectacular celebration of sporting excellence that showcases the world’s best athletes.
But they are also something more. The Games help bring Olympic values to life. The Olympic Games provide the global stage upon which men and women from different countries, cultures, religions and ethnic groups remind us of our common humanity as they share experiences and compete in an atmosphere of goodwill and fair play”.
IOC Report – Shaping the Future – 2010
The Olympic Games is, undoubtedly, the most visible event in the world – be it sporting or otherwise. Being the major international event, huge costs are involved – massive constructions and renovation works. The debate obviously leads to discussions on the economic impact of such huge expenditures.
It is misleading, and often erroneous, to judge the economic impact solely on the basis of outlay of expenditure and income from the Olympic Games.
But the immediate focus is still on the expenditure of construction and related costs.
Therefore the element of legacy is frequently highlighted. Sustainability has now become the It-Word.
For the International Olympic Committee (IOC), legacy and sustainability receive high importance. Billions of dollars are set aside to ensure the success of any Olympic Games. Therefore, the staging of the Games –the use of the facilities and its value for the city, region and the country as a whole– should receive priority in the planning period.
To maintain the relevance and appeal of the Olympic Games, the IOC manages all aspects of the Games from a unified perspective called the 360o Games Management approach. “360” as it is known was launched in 2007 to address the long-term strategic vision relating to each Games edition. Rather than only “doing things right”, the IOC also focuses on “doing the right things” because 360 takes a holistic approach to better understand the big picture and involve more stakeholders in assessing the mid- and long-term risks and opportunities surrounding the staging of the Games.
IOC President, Dr Jacques Rogge has frequently reiterated the position of the organisation:
“The success of the Olympic Games is not determined solely by the 16 days of competition. To be truly successful, the Games should leave a positive legacy that endures long after the closing ceremony.
Legacy planning has become an integral part of the Games preparation process from the very start. In selecting a host city for the Games, the International Olympic Committee closely examines each candidate city’s legacy plan and ensures that all the candidates benefit from knowledge gained by previous hosts”.
Before analysing the overall economic impact of the Olympic Games let us examine the Games costs:
In organising the Olympic Games three crucial areas are relevant:
There were 26 sports in London. In Rio de Janeiro (Rio) there will be 28 sports. Substantial grants from the IOC and national sponsorships adequately cover all expenses. In the recent past there has not been any deficit in any Olympic Organising Committee. Expertise in the operation of the events usually comes from the International Federations (IFs).
Obviously, facilities are necessary for the organisation of each of the sports on the Olympic Programme. Besides, an Olympic Village and in some cases satellite villages are essential. The Olympic Stadium is usually utilised for the Opening and Closing Ceremonies and for the Athletics events. This is normally the largest spectator capacity facility required for the Games. Water Sports, especially sailing, are quite often held outside of the Games city.
This is the major expense for any Organising Committee. These consist, inter alia, of:
To ensure adequate and appropriate utilisation of the facilities, the Games must have a strong and rigid legal, planning and environmental framework. Otherwise failure is inevitable.
Games Structures and White Elephants
In my opinion, white elephants are the result of a series of factors:
Initiated as icons for the city and country
Unsatisfactory advice from authorities and financiers
Succumbing to pressure from special interest groups
Changing intentions after construction has begun
The London Games have been hailed a great success story. After the Games ended, IOC President Dr Jacques Rogge was full of praise:
“London has raised the bar on how to deliver a lasting legacy by incor- porating long-range planning in every aspect of the 2012 Games. We can already see tangible results in the remarkable rejuvenation of East London, but that is just the start.
The new Olympic Park and sustainable Olympic venues will draw visitors from throughout the UK and beyond for years to come, supporting jobs and economic growth”.
UK Department of Culture, Media and Sport – 2012
Schools: Prime Minister, David Cameron announced an annual £150 million cash injection to school sport for pupils in England aimed at ensuring the legacy of London 2012. David Mackay – 16 March 2013 – Inside the Games
Events: Hosting London 2012 has boosted the UK’s ability to compete successfully for major global events; capped by a winning bid to stage the IAAF World Athletics Championships at the Olympic Stadium in 2017.
Venues: For the first time in Olympic history, the venues for London 2012 have been designed as much around what happens after the Games as during it. So, far from becoming white elephants, the iconic facilities will become a new generation of world- class sports facilities, serving communities and elite athletes for decades to come.
Growth: The preparations for London 2012 coincided with the worst global economic crisis since World War II. Despite the testing conditions, the Government maintained its investments in the Games as did the sponsors. In return, London 2012 is now on course to help support the UK’s recovery.
Trade: The growth ambition goes beyond the companies directly involved in delivering the Games. With the global spotlight on the UK, London 2012 showcased the best of British business.
International and Local Tourism: Besides attracting overseas visitors, the UK is also encouraging more people to holiday at home with so many new attractions in London.
City: East London has been transformed. The impetus provided by London 2012 helped to accelerate long-term regeneration plans by the host boroughs and the Mayor of London. Westfield is the new major shopping centre for London.
Extracts From: Department for Culture, Media and Sport
The London Legacy Development Corporation (LLDC) announced that iCITY will be created as the digital hub at the London 2012 Media and Broadcast Centres. It is anticipated than more than $100 million will be spent to attract tenants to the site. London Mayor Boris Johnson stated:
“It’s absolutely fantastic news that the final piece of the Olympic venues juggle has now been firmly put in place. With the future of eight out of eight permanent venues secure, London has well and truly delivered on what is a hugely important part of the Olympic legacy story. iCITY is the final jewel in the crown of Queen Elizabeth Olympic Park”.
Inside the Games – 18 May 2013
Vancouver (2010) – Public discussions with all stakeholders, including all levels of government and the Tax Payer resulted in ensuring that maximum benefits rise from expenditure on facilities. The Vancouver Games encompassed a legacy with social and economic opportunities as well as environmental benefits. It dem- onstrated how a venue programme can be designed for legacy use and built to minimise environmental impact; how socially and economically disadvantaged groups can participate in and benefit from the Games.
Beijing (2008) – Official figures indicate the overall expenditure was $40 billion. Although the expenditure is estimated to represent only 0.3 per cent of GDP the benefits of holding the Games for the city and country is said to be only marginal. The iconic “Bird’s Nest” and the “Water Cube” cannot be defined as sustainable.
Athens (2004) – Greece (population-wise) is the smallest country in recent Olympic history to host the Games. No one knows the exact cost of the Games. The official figure of £9.6 billion (approximately $15) is contested. (BBC 1 February 2011) Building of permanent venues for baseball, softball and hockey was a serious waste of money. The stadium, although supposedly only renovated, is presently a drain on the economy. The tourism benefits are questionable.
Barcelona (1992) – Is presently regarded to have been the most successful of the Olympic Cities. The country has benefitted with an extensive communication network. Urban transformation has materialised. Its perception has changed most positively. Investment has increased and the service sector has consequently expanded. The city has become attractive for tourism and it is now the hub for several cruise liners.
Sydney Olympic Stadium (Games of 2000) – Various formulas were considered and used. But until now not a total success. ANZ, the Melbourne-based bank which has the naming rights until 2031, requires $300 million for upgrade. The government of New South Wales rejected purchasing it – not profitable enough.
Around the Rings – 12 May 2013
RAMSAMY Sam, "The economic impact of the Olympic Games", in: K. Georgiadis(ed.), INTERNATIONAL OLYMPIC ACADEMY, 53th International Session for Young Participants (Ancient Olympia, 11-25/6/2013), International Olympic Academy, Athens, 2014, pp.125-131.