The Olympic Games are not only an inspiring display of athleticism and discipline, but also a chance to obtain international prestige. They set the stage for countries to come together in fierce competition, facing each other in rivalries that have lasted generations. Since 2000, the Olympics have become increasingly extravagant, with the 2008 Beijing opening ceremony exemplifying this statement. With this extravagance comes a raised level of expectation, and therefore, a raised price. The 2014 Sochi Games marked the most expensive Olympics to date, with a price tag of just over $51 billion (Gibson). However, the city managed to conclude the games with a profit and international renown for their efforts. Many don’t realize that through correct budgeting, sponsorship, and leaders, the Olympic games can prove to be a costly risk with even greater reward. On the other hand, some cities run into trouble with planning and fall behind schedule or go over budget, resulting in negative consequences come competition time. These are the events that scare other cities into bidding for the games, in fear that they may face a similar fate. In the last decade, the Olympic Games have proven to be an expensive risk for failure, but many cities continue to bid for hosting in the attempt to improve their infrastructure and showcase their national pride. 

The Olympic Games are getting increasingly expensive due to the price demands of the initial bids, the actual arenas and stadium construction, and improvements on the surrounding area. When a city decides that it wants to host an Olympic games, two or so years are spent organizing a plan. The plan is then submitted to the Olympic Committee with an initial entry fee of $150,000. If the city is chosen to be one of the three to five finalists, the plan is then elaborated and presented to the Committee again as a  proposal at the cost of $500,000 for submission (Wallenfeldt). When a city is chosen, the projects for cleanup, buildings, and expansion are started immediately. The Olympic Committee has a strict rubric of facilities and prerequisites for a city to be eligible to host, such as a checklist for each sport facility and the demand of at least 40,000 hotel rooms readily available (Wallenfeldt). Unlike casual improvements or construction, the Olympics have a very strict, unalterable deadline for completion. Olympic athletes can not compete on unfinished facilities, so it is absolutely necessary for the cities to do whatever it takes to finish before their arrival. This causes much of the construction work to need extra crews to work over time, day and night, until building is on schedule. For this reason, the estimated cost typically does not cover the overall expenses of production, as working overtime and hiring extra workers is an added expense (Wills). On top of that, some cities spend more than necessary to put on extravagant productions for their opening and closing ceremonies. This increases the cost for hosting in an obvious way, but the lure of a captivating display also draws in more attendees, who pay for things like hotel, tickets, and food in the area. 

Although the cost of hosting the Olympics is monetarily taxing, there are positive results of hosting the Olympics such as improved economy, infrastructure, and environmental cleanup. When a city is selected for hosting, construction begins immediately, usually around eight to ten years before the actual Games are held. The budget for each Games varies, but the money typically comes from a combination of the city, the Olympic Committee, tax money, and sponsors. Even though the games may be a net loss on paper, a large portion of money lost was donated by sponsors (Yamawaki, Yumi). Each Olympics has potential to earn back some of the money spent internally through broadcast rights, ticket sales, tourist spending, and licensing. On top of this, the city improvements made for the Olympic Games often benefit the locals for a long time. Hosting the Olympics demands more than just tracks and arenas; the huge influx of visitors to the city means that the area must be able to accommodate additional travel and hotels. On top of this, each city is representing their greater country and seeks to improve the area in such a way that the national pride is upheld. There are multiple examples of city enhancements from the last decade to reflect this. The London 2012 Games gave life to a run-down suburb called East End and the Vancouver 2010 Games established a transit system around the city and to the airport that is still used by locals and visitors alike (Wallenfedt). The 2016 Rio de Janiero Games, although widely considered a farce, expedited a clean up project for the cove surrounding the Olympic village. 

For some host cities, too many plans go awry and the city may experience lasting negative consequences, such as debt and unused buildings. In the infamous case of Rio de Janiero in 2016, the city experienced many unexpected roadblocks in construction, such as water pollution, scheduling delays, and going over budget. A CBS video interview with locals revealed that even though the Olympic building committee used more money than initially intended, the Rio area did not receive the infrastructure they were promised, even though the majority of Rio’s budget came from taxpayer dollars (CBS This Morning). This, along with the outpour of negative media throughout the duration of the games, caused Rio de Janiero Olympics to earn an overall negative legacy. At the time of its bid, Rio’s economy was flourishing, so it was selected to host with high expectations from the rest of the world. However, its economy was fragile, and the city could not handle the demand for more money when its Olympic projects went over budget. Similarly, the Athens 2004 were expected to be a beautiful display of the Greek roots of the Olympics. However, when the city took on debt after they too went over budget, the Games harshly weakened the city’s economy, which to this day is still in financial crisis. A journal by the American Economics Association conducted research as to why some cities can handle the high costs, even when every Games in the last decade has gone over budget. “The high average cost overrun for the Games…should be cause for caution for anyone considering hosting the Games, and especially small or fragile economies with little capacity to absorb escalating costs and related debts,” the authors of the paper write. This shows that the risky title of Olympic host doesn’t typically does more harm than good to cities with fragile economies. 

When a city utilizes preexisting facilities or tactfully budgets, their games typically finish with little to no debt and a lingering positive legacy, such as the Beijing, Vancouver, or Sochi games. These are examples of cities who used the money that they were given to carefully develop a plan. While they may have gone into the red zone of spending during the production of the Games, the debt was relatively nothing compared to the overall budget, and the profit of the Games themselves made up for this loss in six of the nine Games within the last decade (Gibson). While the profit from the Games may not cover the total amount of money needed to host the games, it does cover the total amount of money that the city itself, as well as its taxpayers, spent. The rest of the money was given to the city by sponsors or placed into infrastructure improvements, and therefore spent as a lasting investment. Many of the facilities used throughout the Olympics are later converted to sports stadiums or convention centers for the area. In the case of Beijing, many of the facilities will be reused for another Olympic Games. This just goes to show how the drastic building and rapid changes made to the city may seem frivolous, but when reused or converted for use in some way, can actually be a positive contribution to the city.  

Even with billions of dollars being spent at each Olympics, research shows that the impact on local economy is mainly short term. One journal entry by two economists claims the only significant impacts are solely short-term changes in gross domestic product and unemployment as shown through fifteen countries that have hosted a total of twenty-four Olympic Games (Chengli, Huai-Chun, Hsiou-Wei). Cities that host the Olympics have been deemed capable of doing so by the Olympic Committee, and are typically financially prepared for the investment. For this reason, only three of the nine host cities in the last decade were placed in long-term debt directly due to the games (Gibson). An investigation was held that compared changes Chicago and Beijing, both of which placed a bid to host the Olympics. The purpose of this was to have a clear indicator of how the Games affect a city in comparison to how a city might change just due to natural causes. It found that both Beijing and Chicago improved their internal infrastructure, but Beijing did so on a larger, more costly, scale (Billings, Holladay). However, Beijing received international media attention and as a result, experienced increased tourism for a few months following the Olympic Games. The city did not experience any lasting economic effects, but are still rallying to host the 2022 Winter Games. For a city like Sochi, who had the stable economy but wasn’t exactly renowned internationally, the Games served not as a economic boost during the actual host period, but in the years that followed as tourism increased. It is rare, however possible, for a city without much worldwide recognition to possess the ability for a successful Olympic Games, but Sochi proves that doing so can help the surrounding community. 

 Typically, one Olympic games may have better chances of going well than another based on each specific city and how the Olympics will impact it. The Washington Post said that hosting the Olympics can be worth it depending on the city and what that city needs. When Boston tried to place a host bid, it received large amounts of protest from its locals (Essex). The Washington Post argued that a place like Boston, who already has international distinction, would only lose taxpayer money from hosting. However, a city like Sochi benefitted from hosting because it experienced an increase in tourism even in the months following the games (Yamawaki, Yumi). This, combined with the preexisting state of the economy before the Games, directly impacts whether or not a city will profit, even if not monetarily. Breaking even, or even slightly losing money on the Olympics, can be worth it to be recognized internationally as a superpower, plus the city may continue to benefit from the expansions and improvements made on the city in lieu of the Games. The city would have had to spend money to make those changes regardless of whether or not it was in preparation for the Games, but with the incoming tourism money, as well as the city’s Olympic budget, the Olympic Games are really a way to speed up and instigate outstanding projects. This correlates to how much money a city may end up spending to build and fulfill all Committee requirements. If a city already has a preexisting transit system, high functioning airport, and athletic facilities, it will cost much less money to update those and fill in the missing gaps as opposed to making everything new. Contrastingly, if a city is still developing and does not have these things, it will cost more money because they must build everything new. 

Overall, the Olympic Games are an expensive excuse to showcase pride and possibly improve upon a city, even if neither of those outcomes are guaranteed. A city has potential to succeed if its economy is strong and the city could benefit from infrastructure improvements that needed an update or weren’t there before. While some cities are prepared for this and some are not, both head into the Olympic bidding process in the hope of helping their city and showing the world how great it is. The Olympic Games are a chance for the world to come together and share in the pride of each culture, something that is worth more than any price tag. 

