The reality behind Olympic Games!

The biggest sporting event of the year just concluded and it was nothing sort of a disappointment for India. With 117 Indian athletes making up the contingent for Paris 2024 Olympics, only 6 medals - a silver & 5 bronze came in. Where an athlete took 2 medals, others were disqualified because of 100 g. Overall, Olympics this time was full of drama and interesting stories.

I am sure you must have had your fill of these news lines in the past few days. So let’s take an interesting angle to the Olympic games, The Financial Angle and try to see how much it makes sense to us. I am sure this is a topic that not many of us will find interesting. After all, who cares about how much is spent on Olympic Games? Right?

It definitely is a topic you need to care about because there are millions of dollars involved in it. Lemme give you a few interesting facts about Olympics that might help you with it:

• China spent a staggering $42 billion in the 2008 Summer Olympics in Beijing. You know how much it converts into India Rupees? INR 35,26,81,77,00,000.00

• The 2024 Paris Olympics is estimated to have created 1,81,000 jobs.

You see, Olympic games is not just a matter of players from different countries coming together to complete against each other in myriad of games, it’s also about how much money goes behind hosting a successful event, how much does a country earn out if it, how many jobs it has created, how many jobs are lost, how much tourism it has attracted towards the country, what is the affect on country’s economy and a thousand other things.

And that is exactly what caught my attention while watching these games. So I did a little research, read some reports, watched some videos etc. And in this post, we are going to explore as to why the Olympics games are not good for any country’s economy. So let’s start. First things first,

A little history

The first modern Olympic games were first in 1896 in Athens, Greece, featuring 241 athletes. Since then it has been held every four years, except during the World wars, for obvious reasons. Over the 20th Century, the Olympics grew in scale and significance becoming a major international event. But it is only after the 1984 Los Angeles Games that it started to get commercialized.

Boring Fact: The 1984 LA Games resulted in a profit of $232 Million (worth over $700 Million today).

So, if a country can make so much money from hosting this mega event, how can it be bad move. Well, here is a brief picture of the…

Economic realities of Hosting the Olympics

Historical data shows that Olympics often leads to significant financial losses for the host country. To give you a gist:

• The Beijing 2008 Summer Olympics that I talked about earlier cost over $43 Billion but generated only $3.6 Billion in revenue.

• Vancouver’s winter Games in 2010 cost $7.6 Billion but generated only $2.8 Billion in revenue. There are other ample examples too.

The discrepancy between costs and revenues highlights that the Olympics can be an economic disaster. Well, this answers the big question. But the next question that comes over here is that despite the obvious shortfalls of these games,

Why do countries still pursue hosting the Olympics?

Here are my answers to this question:

• Historical Success: Roughly translating to “Sharmaji ke ladke ko dekh ke seekho kuch“. Success in the previous Olympic games gave a boost to aspirations to other to do something similar.

• Economic benefits: There may not be direct profits, but there are often cited economic benefits, such as boosting local businesses & creating jobs.

• Branding: What can be better than putting your logo on a show watched by millions around the world. It sometimes is also a show of how economically sound a country is. But is it?

By now, you might not be surprised to hear that apart form affecting the economy of a county hosting the Olympics, there are other…

Challenges & Risks associated with hosting the Olympics:

The challenges range from financial & logistical to social, environmental & political issues. There is…

• Underutilization of facilities after the games. No big surprise.

• The construction & Operations have significant environmental challenges.

• Social displacement & Inequality (big words, I know😉)

• Long term benefits vs. short term gains. Brownie points to guess who is the winner😂

• Negative impact on local businesses & daily life.

Conclusion

I will keep it very simple. As good the idea of hosting such a big event in our country sounds, it comes with it’s own baggage. While it really gives a boost to some areas of the economy, majority of it lags behind. This is a decision that should be taken after careful considerations, especially for a country like India.

Well, that’s it for this post. I will come and trouble you with another interesting topic real soon😁

Until then

Keep Pondering!