Hosting the Olympic Games

Steve Johnson
PHE 120 Bronzan
9/5/12
Is it Worth the Costs to Host the Summer Olympics? The Summer Olympic Games are some of the most prestigious, and most watched sporting events on the planet that are all mixed into one huge international event. With this prestige come the best athletes in the world, ranging from track and field and swimming, to table tennis and equestrian. All of these athletes come together every 4 years, to a city that is picked by the International Olympic Committee. To host all of the best athletes in the world is an honor, and can put a city on the map. However, to host the Summer Olympic Games, the city has to produce a “wow” factor like no other. In today’s society with countless television and internet sources, all eyes are on the city for 2 ½ weeks while they are hosting the games. To produce such a reaction from fans from all backgrounds can be very expensive. Buildings and stadiums not only need to be built to host events, but some old venues need to be renovated, as the whole world is watching these venues during their given events. Not only do the sporting venues need to be built and refurbished, but surrounding areas are also renovated and reconstructed to show off the beauty and pride of the given country. Hosting the Olympics is the best way to show national pride and beauty to the rest of the world. Though it is expensive economically, the effects monetarily and socially are worth the pains and expenses that are put into hosting the games from building new venues and rehabilitating old ones. Cities bid on hosting the Olympics about 10-12 years before the games are to be hosted. This gives the city picked time to start building new venues that can host the large crowds and also rebuild and renew blighted surrounding areas to look beautiful to the some 15,000 journalists and athletes that come to the city. The city’s reputation is on the line, and the government of the host country doesn’t want the athletes, fans and journalists to talk down about the host city and its venues. Hosting the summer Olympics never used to cost anything like what it does today. With Television networks and internet broadcasting almost, if not every event, all eyes are on the host city. The big jump in costs started at the Olympics hosted in Montreal in the summer of 1976. It is one of the most expensive Olympics to date, costing the city $6 billion in buildings and renovations. One of the most expensive buildings was Olympic Stadium. Though initial budgeting said otherwise, it ended up costing $243 million. Montreal was unique in that it was publicly funded. The citizens of the city voted to pay for the Olympics through whatever means necessary. However, they were told that it could be a financially beneficial investment and that if the games turned a profit, they would not have to pay as much. As it turned out, Montreal had the biggest monetary deficit after the games than ever before. “The gaping deficit of $1.2 billion (€1 billion), is still being paid off through a supplementary tax on tobacco. (Kyle)” Montreal is looked at as the model of what not to do, and after these games, much research was done before bidding on hosting an Olympic games. Due to the financial troubles of the Olympic Games in Montreal, cities thought twice before deciding whether or not to bid. Los Angeles won the right to host the Olympics in 1984, and showed that hosting the Olympics can be a huge success economically. There were new strategies put in place on how to fund the games and the renovations and construction that was to be done in order to host the games adequately. “Since local citizens voted against public financing, these games became the first to be almost entirely privately funded. Los Angeles marked the beginnings of commercialization of the games and the development of Olympic sponsorship deals (Kyle).” This showed the rest of the world that it could be financially beneficial to host the games. Mostly through corporate sponsorships, the LA Olympic Games are said to have profited close to $400 million. This is when the sponsorship deals that you see on commercials in present day Olympics started. Everyone wanted to be the “official” drink or outfitter of the Olympics. The 2012 London Olympics received a very documented and advertised major sponsorship from McDonalds, along with other major corporations. Also, prices of television sponsorships and broadcasting rights have gone through the roof, also helping to offset the costs of the games. NBC spent $1.18 billion on the rights to broadcast the games from London online and on television (Phillips). These new types of funding and revenues produced from hosting the games have dramatically changed the way Cities bid on the games as well. Whoever has the most expensive plan usually wins. Whoever can produce the biggest and best venues will receive the games, and the only way to do that is to outbid other cities economically in your plan. With these sponsors however, cities are more likely to want to host the games and have more of a chance to be successful and turn a profit. The benefits for hosting the Olympic Games can also be argued to be beneficial socially and have other impacts for the host city other than economic success. The games renovate and remove blight from surrounding areas to Olympic venues. This in turn is a positive side effect of hosting the Olympics in the given city. Due to the influx of people from all over the world, the city doesn’t want crime or surroundings that are not aesthetically pleasurable. This means they have to remove this from the surrounding areas and venues, which makes it a much more pleasurable and a safe place to host the Olympics. These affects were shown in Munich, which had a new subway system and much of the city had been renovated and rebuilt (Kyle). Transportation renovations have made some of the biggest impacts on host cities, as the athletes, fans, and journalists rely on public transportation to get from venue to venue. Another positive social effect is the fact that the construction and renovations not only make the city more aesthetically pleasing, but they create many jobs for local residents. One of the main focus’ in the London Olympics was to put people from under-privileged areas to work, which would hopefully in turn reverse the low economic status of the area. As stated by the Olympic Games Impact Study for the London Olympics, some goals were, “empowering disadvantaged groups through employment opportunities related to the Olympics; improving employment prospects through experience gained before and during the Olympics; and, increasing social integration and co-operation through development of local enterprise and other initiatives focused on the Olympics. (Games)” In tough economic times, putting people back to work is a major priority in many countries today. This is another positive effect that hosting the games has on its host city. Of course with positive effects, there are negative effects as well. As stated earlier, the Montreal games in 1976 were what most people deemed an economic disaster. Not only was there a huge amount of debt, many of the facilities had no further use after the Olympic Games. Olympic Stadium, the most expensive project of the games, didn’t serve much of a purpose afterwards. The Montreal Expos used the stadium as their home field when they were founded, but it was short lived in economic terms. The Expos have since left, and the stadium is left without a tenant, which is an expensive asset to the city to maintain. Basically there is a challenge after every Olympics: “to use the infrastructure effectively and learn how to deal with the massive, sudden drop-off. (Kyle)" Olympic sports arenas often remain unused or underused. Olympic villages fall into disrepair and become problems for the city. Most cities simply do not need all the facilities. With these problems and disadvantages of hosting the Olympics, comes the huge debate that every city comes to before it starts bidding, is it worth it to host the Olympics? Cities plan for months and even years on what to do with facilities once the games are over. There are definitely benefits to hosting the Olympic Games. Sure there have been a fair share of failure stories, but if you look at the reasons for the failures you can diminish the problems. The main problem in Montreal was the fact that after the games were over, there was no need for the venues. What needs to be done before even bidding for the games is to make a plan for what to do after the Olympics have left the city. There can’t be unattended stadiums. Stadiums and other big venues will just suck the money out of the city if they play host to nothing because of the constant maintenance that is being done to them in order to keep them clean and up to date. If they are hosts to major sporting events, even something as international soccer games once a month, the revenues generated during that can be used to pay for the maintaining and welfare of the stadium. London can be used as an example. The stadium built will be used for soccer games, in a country where soccer is the most watched sport. The pool and other indoor venues will serve as community recreation and fitness centers, which will be used as state of the art gyms and exercise centers for people in the surrounding communities to use with paid memberships(). There are also other ways to not only break even, but make money while hosting the Olympics. Los Angeles can be seen as a perfect example. Instead of public funding the games which takes money out of the government, lease the construction projects out to private contractors who can take a cut of the earnings and lease out the venues after the games. They then have to pay taxes on the venues which go back to the city, state, and national governments. The city itself will benefit enough from the influx of people and exchange of goods, but the private sector can be used to an advantage when it comes to the costs of building the elaborate venues needed for the games. Another major benefit that outweighs any financial cost is the effect on the surrounding communities and people. Not only do the construction and renovation efforts transform the look of a community and neighborhood, it puts people in financially unstable communities in jobs which in turn increase their cost of living and economic standing. Cities need to plan efforts like this like London did for the 2012 Olympics. The games can not only be used as a sense of national pride, but can really be used to turn a city around. Re-building and re-furbishing blighted areas can turn cities from crime centers, to business and economic hubs. New neighborhoods will hopefully bring an influx of new people, which will rid the area of any past disadvantages. This shows that the importance of the Olympics not only can have positive effects economically, which is indeed important, but can also rejuvenate communities and whole cities.

Works Cited
James, Kyle. "Olympic Games: Cash Cow or Money Pit?" Olympic Games: Cash Cow or Money Pit? DW, n.d. Web. 05 Sept. 2012. <http://www.dw.de/dw/article/0,,1296472,00.html>.

Olympic Games Impact Study: Final Report. Rep. London: Pricewaterhouse Coopers, 2005. Web. 2 Sept. 2012. <http://epress.lib.uts.edu.au/dspace/bitstream/handle/2100/443/OlympicGamesImpactStudy.pdf?sequence=1>.

Phillips, Richard. "World Socialist Web Site." Big Business Demands a Corporate Olympics. N.p., 16 Mar. 1999. Web. 02 Sept. 2012. <http://www.wsws.org/articles/1999/mar1999/olym-m16.shtml>.

Cited: James, Kyle. "Olympic Games: Cash Cow or Money Pit?" Olympic Games: Cash Cow or Money Pit? DW, n.d. Web. 05 Sept. 2012. &lt;http://www.dw.de/dw/article/0,,1296472,00.html&gt;. Olympic Games Impact Study: Final Report. Rep. London: Pricewaterhouse Coopers, 2005. Web. 2 Sept. 2012. &lt;http://epress.lib.uts.edu.au/dspace/bitstream/handle/2100/443/OlympicGamesImpactStudy.pdf?sequence=1&gt;. Phillips, Richard. "World Socialist Web Site." Big Business Demands a Corporate Olympics. N.p., 16 Mar. 1999. Web. 02 Sept. 2012. &lt;http://www.wsws.org/articles/1999/mar1999/olym-m16.shtml&gt;.