The Impact of Hosting the Olympics Isn’t Necessarily the Bang for Their Buck Countries Hope It Will Be

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Originally Posted On: https://credello.com

 

In today's world, if something doesn't provide a positive economic impact, people usually don't want it. But when it comes to the Olympics, countries are not only striving to compete in the Games, but also, they're competing to host the quadrennial Summer and Winter Games by pitting their major cities against one another.

New York City is the greatest city in the world. It's home to Broadway, Central Park, Madison Square Garden (the Mecca!), and many other notable venues. But the narrow Island of Manhattan and outer boroughs just aren't built to host an Olympic Games (see: 2012's failed bid and the two football teams that play across the river in Jersey).

While New York City still is recovering economically from the COVID-19 pandemic, its economy still would be the 10th largest in the world if it were a country.

But if the Big Apple ever hosted the Olympics, it would need to undergo a major infrastructure overhaul (what up, bipartisan infrastructure deal?), meaning it might not end up with a net gain even from a tourism boost.

The upcoming Tokyo Games, which were postponed from last summer because of coronavirus concerns, are getting the short end of the stick in almost every way. Japan dealt with cancellations from spectators in 2020, and while the Games will be happening over the next three weeks, there won't be fans in attendance with Japan currently under a state of emergency.

Japan bid a whopping $12 billion to win--if you can even call it winning--the 2020 Games, which are now happening in 2021. The postponement of the games cost the country another nearly $3 billion, and the total cost the country could incur is expected to surpass $26 billion, according to Business Insider. And it's not like they can just take out a personal loan to consolidate their debt. So, what exactly are the pros and cons of hosting the Games, aside from maybe getting to see Bob Costas sporting double conjunctivitis?

Economic pros of hosting the Olympics

Assuming a country isn't hosting the Olympic Games during a global pandemic, the benefits of being the host country include:

  • Temporary job creation from costly infrastructure improvements that can continue to benefit tourism into the future
  • Additional revenue from the number of athletes, media members, fans, and sponsors flocking to the city for months before and after the Games

Economic cons of hosting the Olympics

But typically, there are more downsides than upsides to being the host city or country:

  • Job creation might not live up to expectations (fewer jobs than bargained for, jobs going to people who already are employed--not affecting unemployment numbers, profits going to international companies rather than benefiting the host city)
  • Income from the Games often doesn't cover the total cost, and most cities go into debt: Los Angeles, which will host the Olympics for a third time in 2028 after hosting in 1932 and 1984, is the only host city to turn a profit, but notably already had the infrastructure to do so
  • Many countries still are paying off debt from infrastructure improvements made for the Games: not even Giannis Antetokounmpo can help Greece out of the debt crisis caused by what the country spent to build necessary facilities to host the Athens Games in 2004.

 

Sources:

-Business Insider

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