There is no denying that the Olympics is a spectacular event that much of the world’s population eagerly watches. It is considered a huge honor for a country to host the Olympics, and usually no expense is spared, since most countries hope to profit on the event.
The 2016 Rio Olympics cost $13.1 billion, close to the cost of the 2012 London Olympics and Paralympics, which was at $14.6 billion. The price is a bargain next to Beijing’s $42 billion 2008 Olympics.
Taxpayers Foot Some of the Bill
Who pays these high prices? Taxpayers of the hosting city will foot a good portion of the bill. For the 2012 London Games, taxpayers were responsible for $4.4 billion of the costs. Boston also pulled out of the 2024 Games bidding when the mayor found out locals could be held accountable for run-off costs.
The International Olympic Committee’s Part
The International Olympic Committee (IOC) and all of the related organizations within the Olympic Movement are privately funded. The committee only retains 10% of its funding and disburses the other 90% to the Olympic games and to support the worldwide Olympian movement. This funding includes monies for national Olympic committees and financial support so every country can compete.
Debt and The Olympic Games
Many cities will end up going into debt because they hosted the games. Economists questioned how badly the 2016 Olympics would hurt Rio, since Brazil was facing the worst recession since the 1930s at that time. Even with the downturn of the economy, the Brazilian government authorized an $850 million loan to Rio to build its Olympic infrastructure.
Politicians have justified the high costs of the games as a chance to boost overall profits and economy. However, that is not always the case. Rio overspent significantly over its original budget of $2.8 billion in its bid, an overrun of 368%. Most of the 2016 Olympics venues were abandoned after the games, and Brazil’s real GDP declined continuously throughout the year of 2016.
While hosting the Olympics is a big deal for a country, it can also come at the cost of the taxpayers. Many times the fame of the Game only lasts until the pro-athletes and cameras are gone.