Hosting the Olympic Games comes with a staggering price tag of at least R218 billion, making it a high-risk, high-reward gamble for any prospective host city.
Also read: In Pictures: Day 7 of the Paris Olympics 2024
Every four years, billions of viewers from around the world flock to witness the pinnacle of sporting excellence – the Olympic Games.
Cape {town} Etc discount: Looking for things to do in the city, at half the price? Get exclusive offers here.
‘The Olympic Games are the largest, highest-profile, and most expensive megaevent hosted by cities and nations,’ explained University of Oxford researchers Bent Flyvbjerg, Alexander Budzier and Daniel Lunn.
Currently, Paris is hosting around 10,500 athletes, including 138 from South Africa, for this year’s Summer Olympic Games.
According to BusinessTech, The International Olympic Committee (IOC) forecasts that around 15 million tourists will flock to Paris for the Summer Games, generating an anticipated revenue between $7.4 billion and $12.4 billion.
While hosting the Olympics is considered a prestigious honour, it comes with significant financial risks.
In their paper ‘Regression to the Tail: Why the Olympics Blow Up,’ Flyvbjerg, Budzier, and Lunn reveal that the average sports-related costs for hosting the Games are about $12 billion (R218.8 billion).
This figure excludes non-sports-related expenses, such as upgrades to airport infrastructure and hotels, which often add several times to the overall cost.
According to ‘The Oxford Olympics Study 2024: Are Cost and Cost Overrun at the Games Coming Down?‘ by Alexander Budzier, the estimated sports-related costs of hosting the Olympics have varied significantly, with some reaching an eye-popping R526 billion.
The Rio 2016 Summer Games were the most expensive, costing $23.6 billion (R429.41 billion), followed by London 2012 at $16.8 billion (R305.68 billion).
Budzier notes that while Tokyo 2020/21 officially cost $13.7 billion (R249.28 billion), additional expenses could push the total to between $19.2 billion (R349.35 billion) and $33.4 billion (R607.72 billion).
Every Olympics from 1960 to 2020 (excluding Paris 2024) has exceeded its budget by an average of 172%, the highest overrun recorded for any megaproject, according to the paper.
These figures often exclude substantial indirect costs for urban and transportation infrastructure, raising questions about the true expense of hosting the Games.
‘The economic burden of hosting the Olympics has become a significant deterrent – the costs associated with preparing for and hosting the Games are staggering,’ said secretary-general of the International Council of Traditional Sports and Games Shammi Rana.
Cities like Athens, Montreal, and Rio have faced severe financial fallout from hosting the Olympics.
The Athens 2004 Games exacerbated Greece’s economic crisis, while just before the Rio 2016 opening, Rio de Janeiro’s governor declared a state of emergency to secure extra funding.
The 1984 Los Angeles Olympics, which used mostly existing infrastructure, turned a $215 million profit.
Researchers Sid Panayi and Borja García suggest Paris could achieve similar success by utilising existing facilities and low-cost temporary venues.
This potential has fueled calls for Cape Town to bid for the 2040 Summer Games.
A study by Cape Town 2040 reveals that 84% of the required sports facilities are either available or can be temporarily constructed.
If Cape Town bids for the 2040 Summer Games, it will be its second attempt, having been eliminated in the final round of voting for the 2004 Games, which were awarded to Athens.
Find your perfect set of wheels with these incredible deals on cars for under 100k. Find car listings here.
Also read:
Here’s the story behind the most viral picture of the Olympics
Picture: Diego Puletto/ Gallo
