Brad Huseby | Spring 2025
Every four years, the world comes together to watch the Summer Olympics. While these games are a spectacle with flashy new stadiums, newly designed medals, and a captivating opening ceremony, the profitability of the games is not always discussed. These summer games are anything but cheap to host. Hosting the 2024 Summer Games cost 8.7 billion dollars and every nation that has hosted the games since 1984 has learned this the hard way. Since the 1984 Los Angeles Summer Olympics, the games have time and time again proved to be more costly than profitable. The primary economic burden of hosting the Summer Olympics stems from the unsustainable infrastructure requirements imposed by the International Olympic Committee, which pressure host cities to build extravagant, often temporary venues that offer little value beyond the Games themselves.
Economic Factors
Since the modernization of the Summer Olympics in 1896, the games have been a pricy endeavor. For example, in 2016, Rio de Janeiro was selected to host and spent a staggering 23.6 billion when all was said and done. Rio de Janeiro did not plan on spending this much in the beginning. They overran their initial estimates by over 350%. One of the factors that led to this overspending was regulations forced upon them by the International Olympic Committee, or “IOC”. The IOC mandates a host city to have 40,000 hotel rooms available for guests, and Rio de Janeiro before the games had only 25,000. Rio de Janeiro had to build 15,000 rooms for guests as well as substantially upgrade transportation to meet IOC standards. Fast forward eight years, the summer games found themself in Paris, France. This time, the games were not quite as expensive. Eight years later, the games cost just 8.7 billion dollars, and Paris only overran their initial estimates by 15%. A few contributing factors to this notable drop in price were the presence of preexisting high-quality infrastructure. 95% of the buildings used for the games were already built. The only three venues that needed to be built from scratch were the aquatics center, which cost around 190 million dollars, the 150 million dollar badminton and gymnastics venue, and the 1.6 billion dollar Olympic Village. While these three venues alone equate to just shy of 2 billion dollars, Paris was in a much better financial position than the majority of cities before it. The summer games are thought to have brought over 11 billion dollars into the Paris metro economy, more than the 8.7 billion it cost to host the games. This number is not and cannot be attributed as a profit for the Paris Olympic committee, but it does show the world the merit that hosting the Olympic games can have for a city with the right infrastructure. In an era where hosting the Olympics is seen as a risky venture, the success of the 2024 Paris Games is working against that narrative.
Athlete Funding & Compensation
While the biggest financial impact of the Olympics is on the host city, the games can also have financial implications for the athletes. Each country has its own budget for athletes who have qualified for the games as well as for athletes who place gold, silver, or bronze in their respective events. In America, the majority of Olympic athletes supplement their athletic training and competitions with a part-time or full-time job to support themselves. With the exception of a select few the majority of athletes are not participating in professional sports with high wages. Athletes are sacrificing a lot to be at the pinnacle of their respective sports. While most countries compensate athletes who come home with a medal, the amount of money they receive widely varies. In Hong Kong, gold medalists receive north of 700,000 dollars from the government for their athletic achievement, compared to the United States, where athletes who strike gold claim just 37,500 dollars. In the United States, under current economic conditions, a salary of 37,500 a year is on the edge of minimum wage. Athletes are dependent not upon the check they could receive, but instead on sponsorships. While the sponsorship data for all Olympic athletes is not always public and accessible, a few of the top athletes have public sponsorship deals. For example, Katie Ledecky signed a 7 million dollar deal to represent TYR from 2018-2024, and Simone Biles is estimated to make at least 5 million dollars a year, according to a Forbes estimate, from various sponsorship deals with major companies such as Facebook, Uber Eats, and Oreo cookies. While these are just two athletes in the top 1% of earners, these numbers are promising for all Olympic sports athletes.
Discussion
The Olympic Games, while an expensive endeavor, can give back substantially to the local economy and bring Olympians’ dreams of stardom, fame, and fortune with them. Do you believe the current economic system for compensating athletes makes sense? Should a gold medal at the Olympics for an American athlete warrant an athlete a check for more or less than 37,500 dollars? How can Olympians create a way for their sport to pay for their lifestyle without the addition of one or two other jobs? The Summer Olympics are one of the timeless traditions that unite the world. What changes can we make to continue this tradition of celebration and unification for generations to come?
Conclusion
The Summer Olympics are a spectacle and provide the world with a wealth of entertainment for two weeks every four years. As Paris proved to the world in 2024, the games are not necessarily an economic disaster, as the media has portrayed them to be following the games in Rio and Tokyo. Paris showed that by incorporating preexisting infrastructure, you can host games without the hefty price tag of debt, and instead turn the games into a financial success for both the host city and, hopefully, athletes who sacrifice more than anyone for the success of this timeless worldwide tradition.
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