Are The Olympics Worth The Price Tag?

Olympic Rings (Stefano Costanzo)

During the Parade of Nations, Greece always leads the athletes in honor of the Ancient Olympics. Unfortunately, Greece’s economy is also forefront in the minds of many despairing Europeans throughout this financial crisis. Although last in the parade, Great Britain may soon be close behind the Greeks in terms of financial uncertainty.

Many questioned the country’s ability to host the Olympics in London this year. Britain’s GDP continues to shrink. Thousands of Home Office border control workers threatened to strike the day before the Opening Ceremony until finally caving in the night before. Security preparations fell through. Yet, in spite of these danger signs, Mitt Romney was heavily criticized for questioning London’s readiness.

Promises of benefits to the host country’s economy usually turn out as fantasies, something many Britons already realized back in 2008 when the country spent $25 million to bid for hosting. The Economist says it best,

“First, host governments say that the economic benefits of the games will greatly outweigh their costs. Second, they claim that the games will inspire people to exercise more. Third, they predict intangible benefits from being in the global spotlight for a couple of weeks. The first two claims are rubbish; the third does not apply to London.”

When the estimated cost of the London Olympics almost quadrupled from 2.4 billion pounds in 2005 to 9.3 billion (approx. $14.6 billion USD), many Britons were appropriately frustrated. When improvements to public transportation were included, the cost was newly estimated as being $38.5 billion. Almost all of this burden falls on taxpayers, as private and commercial investment turn out to be considerably smaller than expected. Advertisements are prohibited in the stadium and on athlete’s uniforms, and nearly all of the advertising revenue goes to NBC, not the host country.

The Olympics are intended as a symbol of international unity, universally friendly competition, and united glory for the athletes’ successes. However, the Olympics cannot simply erase tensions between countries. North Korea’s soccer team walked off the field, refusing to play for almost an hour, because of an accidental display of the South Korean flag. The two countries are still officially at war.

The promise of unity is largely a facade. Beijing’s “One World, One Dream” campaign back in 2008 may sound promising. However, at the time, there were many calls for protests and boycotts due to China’s human-rights abuses. It is overly optimistic to think that countries will suddenly forget their military or diplomatic conflicts because of a common interest in swimming or gymnastics medals.

That being said, the Olympics do offer something special. Although there is no noticeable effect of an “increase in national happiness” due to hosting the Olympics, something about an opportunity for the entire world to take part in sports competitions resonates with me. I would not consider myself a dedicated Olympic fan, but I do admire the intense amount of hard work that the athletes must give to compete internationally. I enjoy watching many of the events, and I would argue that there is definitely an increased sense in national pride – even if it is immeasurable.

The problem comes when we must justify the enormous cost. Indeed, Beijing will be paying off their “bird’s nest” for 30 years, long after it has been forgotten. Greece’s Olympic venues have fallen into disrepair. Here is a glimpse from the Guardian:

“The complex’s stadium, also built in 2004 – and used by Greece’s national athletics federation – is cracked and crumbling, its seats broken, its stairs smashed, its track ripped..

[About Olympic Village] What had been billed as the biggest urban regeneration project in the history of Athens, with a housing capacity for 10,000, is a depressing site, litter-strewn and derelict.”

One can only imagine it will be even more difficult for Britain in years down the road. With these things in mind, I ask you, “Is it worth it?” Leave your thoughts below.

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10 responses to “Are The Olympics Worth The Price Tag?

  1. I think that the Olympics have grown almost out of control. However, I still believe that it is an honor to host this extraordinary tradition and while it does place a financial strain on the country on whom this honor is bestowed, the pride and excitement that are generated by the event are intangibles that help to justify the cost. But I think the Olympics in general need a make over and some streamlining can be done which would make the games more exciting for the fans and ultimately less expensive.

    • Good points. I still view it as an honor as well – and like I said, while there may be no official measure of an “increase in national happiness”, I think there is definitely some generated. And I do truly enjoy them.

      But when they start trying to spend billions extra of taxpayer money just to “1-up” the country who hosted before them, it is just pride. Which seems to go completely against the spirit of the Olympics.

  2. I’m glad you made mention of crumbling buildings from past games. That’s the thing that really gets me: invest all this money into beautiful facilities, use them for a few weeks, and then watch them crumble.

    That’s not usually how they plan it, of course. They seem to often think that building the buildings where they do will help “revitalize” an area, and it seems like that is more wishful thinking than reality.

    But the games sure are fun to watch!

    • Agreed. That was actually the most powerful part to me. If you click on that link from The Guardian, you can see the whole story. It’s amazing how bad it is. Makes me wonder if all the expense and wasted infrastructure helped Greece along a little bit…

      The state of the buildings may also be a result of Greece’s economy rather than a cause. With many of their historical locations in disrepair, they have to make priorities. But it is just unbelievable to see how “revitalized” it turned out to be.

      But yes, they are fun to watch. 🙂

  3. I agree that the amount of money spent on the Olympics is likely too much, and that the host countries end up in debt rather than getting a lot of benefits. Obviously some spend is necessary given the need for a lot of security around any event like that, and you would want an event like that to be a celebration — but prudence would suggest being very careful to spend on what’s really required for the crowd management and not too much on showing off the host country to be better than the last host country’s celebration.

    However I do believe that there is something really important about getting all countries together for something good like athletic competition and trying to put aside some of the political upheavals and even violence between those same countries outside of the Olympics. Yes, it’s not perfect – countries will still boycott, and teams will walk off the field, and criticisms of certain athletes will still be heard. But those are downplayed in most of the coverage I’ve seen. And having a successful Olympic event speaks to everyone watching that our world really could be a less violent and more peaceful place if we made that one of our key goals. Perhaps I’m dreaming a bit — or just stuck in my natural optimistic nature — but the Olympics makes me feel better about the countries that I share this world with. I expect that’s true for people in other countries as well. Maybe that’s actually the first baby step toward making this world a better place.

  4. You have put it nicely, but I’ll be a bit more frank. The Olympics fit into a type of magical thinking with two I’s: Infrastructure and Investment. Mentioning these words tends to shut off people’s brains as regards budgets and economic feasibility. Nickel and diming always happens with these massive projects. It works a lot better when the project is private, because shareholders are a lot less likely to bleed their own wallets than politicians the public treasury.

    Just as the Olympics capitalize off of a sense of romance, so does the California High Speed Rail project. Initially floated with a voter-approved $8 billion bond in 2008, the final projected cost ballooned to an estimated $98 before being scaled back to around $60 billion. All they had to do was sacrifice the high speed part for a major portion of the route.

    Major building projects that turn out to be a dud seem an intractable part of large, metropolitan societies.

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