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Description
While Olympics can showcase the host city, the economics of
hosting the games is a challenge.
By the turn of the 21st century
sports and games acquired a
unique place not only as the
means for entertainment and leisure commanding a considerable share of
disposable income from the common
audience, but also as a stage where
countries can display their development
and market themselves as tourist
and investment destinations, demanding
a huge budget for showcasing
the host cities and organizing the
event. With these benefits in view, the
number of countries bidding to host
mega sports events like the Olympics
is ever increasing in spite of the exponentially
high cost of organizing them.
The estimated expenditure for the
2004 Athens Summer Olympics is
$7.9 bn which includes a capital expenditure
of $5.5 bn and an operating
expenditure of $2.4 bn. The budgeted
capital expenditure alone of 2008
Beijing Summer Olympics stands at a
staggering $30 bn. But promises of
prestige, tourism development and
urban development are counterbalanced
by worries over the finances.
Construction of stadiums and
other sports facilities, which are often
termed ‘White Elephants’ and are normally
of little use after the event, accounts
for the major share of the capital
expenditure. This factor along
with the economic benefits that the
sports events are supposed to bring in
for the host country has always been
under close scrutiny by economists
and analysts. But the advocates of
these events counter the arguments
by citing the boost that the events give
to the economy and the urban reconstruction
that would not have otherwise
taken place. The Summer Olympics
of the last three decades of the
20th century provide enough data supporting
both the parties and yielding
mixed results.
The organizing committee ‘Southern
California Committee for Olympic
Games’ demonstrated how the Olympics
can yield profits. Instead of constructing
the stadiums and other facilities
from the scratch, the committee
refurbished the existing ones like
the Rose Bowl Stadium and the Los
Angeles Coliseum, the tennis courts of
the University of California being the
major venues and complementing
them were numerous tracks and
fields of the California State University.
In view of the Montreal experience,
the Los Angeles City Council
passed a resolution that public funds
will not be spent on Olympics, thus
forcing organizers to depend on private
funds for the games.
