Olympic introspection… (Part Two)

Today, we’ll explore how financially successful the Olympics (mostly summer) were. We’ll begin with the single Olympic Games that really made money, Los Angeles in 1984, a standout example. These were operated without public funds and still delivered a surplus of over $200 million. Unsurprisingly, they became the model for how to run a lean, privately financed Games. Obviously the example didn’t translate into further success. 

Other Games have occasionally broken even or come close, but 1984 remained the only universally acknowledged major profit-maker. Then there are the many losers. Most Games since the 1960s have run massive deficits. Here are a few notorious examples, starting with Montreal 1976 that was so over budget that it took the city 30 years to pay off the debt. 

That should have been a cautionary tale for future hosts, but Athens also fell in the trap with billions in overruns and many venues abandoned afterward. In the case of Greece these costs overrun were the brick that broke the camel’s back in exacerbating that country’s later financial strain. In Brazil, Rio 2016 also had some severe cost overruns with many venues falling into disuse within months after the Games and long-term economic benefits failed to materialize. 

Even the careful Japanese and Tokyo 2020 (held in 2021) saw the Games’ costs ballooning due to COVID-19 delays, not to mention the fact that the expected tourism benefits evaporated as spectators were banned. As far as Paris 2024 was concerned the outcomes are still being evaluated, but early analysis shows that hosting the Games was “anything but cheap,” with costs around $8.7 billion. This rather negative outcome explains why fewer and fewer cities want to bid for the Olympics. 

The massive cost overruns are the main reason as Olympics routinely exceed their budgets by huge margins. As a result, cities know they’re taking on a huge financial risk with little chance of profit. Then there are the long-term debt and infrastructure maintenance costs. After the Games end, cities must maintain stadiums, arenas, transportation expansions, athlete villages and special infrastructures like bobsleigh runs that often become “white elephants.” 

There’s also growing public resistance as residents increasingly vote against hosting in referendums because they don’t want higher taxes, displacement, construction disruption and long-term debt. The Colorado population stands as an example for vehemently rejecting the 1976 Winter Games in Denver. 

Finally the IOC has gained a really bad reputation with its high demands for expensive new venues, costly adherence to new specifications, strict branding rules, heavy security, thin financial contribution and its nasty habit of grabbing most of the revenue generated. Next, we’ll focus on some of the most successful Winter Olympic venues in recent history and how each one performed in its own ways…