International Competition: The Gift that Keeps Costing Us
DataByte: Should Columbus Host the Olympics?
With the 2018 Winter Olympics underway in PyeongChang, we get to bask in the glorious nature that is the Olympics. Watching elite athletes compete at the highest levels, performing feats we can’t even begin to imagine. Pure talent (minus all the doping). But with the rising cost of hosting the Olympics, we could see the landscape change.
In a study by Oxford University, the average cost of the last six Olympics was $8.9 billion. It should be noted that that figure does not include any of the indirect costs. Meaning, that total doesn’t include improving or building roads, airports, hotels, or railways.
With the cost becoming so high, fewer cities and governments are able to bid for the Games. Not only has the price tag increased but the International Olympic Committee (IOC) mandates that the host city and government cover any overages that occur. They have to agree to a non-negotiable commitment to cover any cost increases, no matter how much. Often, the true cost of the games isn’t known until well after the Olympics are over. During the initial bid, one budget is presented to the IOC. After the games have been awarded, another budget is created. Cities will continue to create new budgets to cover the increase in costs over the years it takes to prepare to host the Olympics.
It should be with much caution that any city bids to host the next Olympics. 47% of the last 19 Olympic Games have gone over their initial budgets by 100 percent. In the years to come, we may see Olympics being hosted in multiple cities to help share the burden of the cost.
In case you were wondering, the most expensive summer Olympics occurred in London in 2012 with a total cost of $15 billion and the most expensive winter Olympics occurred in Sochi in 2014 costing $21.9 billion.*
*Data note: At the time of the study, the final cost of the 2016 Olympic Games in Rio was not yet available.