Netizen Journalist

It turns out that hosting the Olympics is no longer profitable, here's the reason

Holiday Ayo - Hosting the Olympics apparently does not bring financial benefits. The country that hosts the Olympics and Paralympics has its own pride. 

But financially, this doesn't make financial sense. This four-yearly sporting event is known to be expensive. In the last few decades alone, the Olympic Games have been marred by budget overruns, long-term debt, wasteful infrastructure, evictions and gentrification, political strife and environmental damage. 

 

For this reason, the International Olympic Committee (IOC) hopes to improve the situation, starting with the Paris Olympics this time. 

 

College of the Holy Cross economics professor Victor Matheson said this Olympics aims to take a more economical and more environmentally friendly approach than in previous years. 

 

“This will be the first Olympics, since Sydney, whose total costs are under 10 billion US dollars. That's because the IOC is running out of cities willing to host this event," he said, quoted by CNN, Monday (29/7). 

 

Previously, hosting an Olympic event was considered a financial disaster. Meanwhile, there is almost no hope of making any money back in the long term. 

 

Meanwhile, an Oxford University study reported that five of the last six Olympic Games experienced cost overruns. 

 

“All Olympic Games, without exception, experienced cost overruns. No other major project experienced this, not even the construction of nuclear power plants or nuclear waste storage," researchers said in the report. 

 

This number is still a conservative estimate. The calculation does not include capital costs such as improvements to roads, railways, airports, hotels, infrastructure, and costs not directly related to match operations. 

 

It has been proven that the Olympics experience cost overruns each time they are held. As an illustration, Beijing spent more than 40 billion US dollars for the 2008 Summer Olympics, Sochi spent more than 50 billion US dollars for the 2014 Winter Olympics, and Rio's costs were close to 20 billion US dollars for the 2016 Summer Olympics. 

 

Meanwhile, the organizers' income from the performances only covers a small part of the costs or an average of only 6-8 billion since 2005. 

 

This is what makes calculating the holding of the Olympics no longer make sense. Last year, the organizing committee for the 2022 Beijing Olympics reported a surplus of 52 million US dollars from expenditures of 2.24 billion US dollars. 

 

However, a Business Insider investigation found the overall costs are likely more than 10 times that amount.

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