Where Do Countries Get The Money To Host Olympics
Where Does Olympic Funding Come From?
Matt Slocum/AP/Shutterstock / Matt Slocum/AP/Shutterstock
More than one-half of the Olympics since 1992 have cost the host state $five billion or less, co-ordinate to Statista, but none accept cost less than $2.2 billion. On the other end of the spectrum are cautionary tales like London, which spent $15 billion on the 2012 Summer Games; Sochi, Russia, which spent $21.nine billion on the 2014 Wintertime Olympics; or last yr'due south $28 billion, year-late Summer Olympics in Tokyo.
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Information technology's well known that the Olympics never stay on budget and well-nigh never plow a profit, and so who comes upwards with all the billions of dollars that are needed put on these events that don't pay off financially?
You, by and large — or another country'due south version of you.
The Tokyo Fiasco Revealed the Circuitous Web of Olympic Funding
The yearlong COVID-19 postponement that pushed back the 2020 Summer Olympics in Tokyo to 2021 cost billions of dollars in everything from construction delays to expired Television receiver advertising contracts. In Apr 2020, Tokyo Olympic organizers and the International Olympic Committee (IOC) began openly feuding about who would get stuck with the bill, according to ESPN.
The IOC, based in Switzerland, wrote on its website that Japanese Prime Minister Shinzo Abe agreed that his country should pay the tab for the filibuster, which Japan denied while demanding a retraction. The IOC complied and changed the diction — but the wording didn't matter. There was never a question every bit to who would get stuck belongings the hot potato: the Japanese taxpayer.
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The IOC Covers Some Costs, but Not Much
The IOC was founded in 1894, two years before the first modernistic Olympic Games in Athens in 1896. A nonprofit arrangement, it'south funded entirely with private money. According to the IOC's own numbers, 73% of its revenue comes from broadcasting rights, xviii% comes from marketing rights and 9% comes from other rights and revenue streams. The IOC keeps 10% to fund its ain operations and redistributes 90% — about $3.4 million per day — to worldwide athlete development and the Olympic Games.
The IOC provides nearly of the budget for the Organizing Committee for the Olympic Games (OCOG), which contributes to some expenses. For context, the OCOG gave $one.5 billion to the 2016 Rio Games, which cost $xiii.vii billion, and it plans to distribute $880 meg to the 2022 Games to pay for things like the Olympic Circulate Services and host circulate operations.
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Public Money Does the Heavy Lifting
It's non fair to call the IOC/OCOG contribution a drop in the saucepan, but information technology'south inappreciably enough. In the stop, it's public money that pays for the Olympic Games.
Host cities and countries incur ii kinds of expenses. The starting time is majuscule investment, or infrastructure, which includes things similar improving subway lines and building stadiums and other facilities. The second is operational costs, similar immigration and customs, security, medical services and sanitation.
Those costs, along with any unforeseen related expenses that pop up — as Tokyo and so many other cities learned the hard way — land on the city and country where the games play out. According to ESPN, the IOC'southward "Host Urban center Contract" puts the cost of almost everything non expressly stipulated squarely on the shoulders of the host city and the host nation'due south Olympic committee.
When (Not If) Budgets Overrun, Host Cities Have Nowhere To Pass the Buck
The Washington Post interviewed experts who compared Tokyo to Montreal in 1976, an Olympic disaster that ran over budget by 720% and took 30 years for the city's residents to pay off. Nihon was officially spending $12.6 billion to organize the Summertime Games past the fourth dimension the postponement was announced, but a government audit found that the existent cost was already double that by jump 2020. A privately funded organizing committee kicked in $5.vi billion, but every other dollar was public coin.
Although the host cities pay for the cost of infrastructure and operations, it's about impossible for local planners to cut costs because the IOC makes most of the business organization decisions. The Post estimates each resident of Tokyo will end up paying $940 to comprehend the price of its pandemic-twelvemonth Olympic debacle.
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For Better or Worse, It'due south Different in the Us
The pandemic revealed that the finances of America's Olympic governing bodies are as precarious equally those of the many Olympic athletes who alive and work and railroad train in a constant state of financial insecurity.
In 2020, near all of America'southward Olympic sports organizations applied for coronavirus relief coin, which the Tampa Bay Times said runs contrary to "the long-held and distinctly American tradition of not using taxpayer funds to pursue Olympic glory."
America is by far the world's most successful and dominant Olympic organization, simply its finances proved to be dangerously fragile. In well-nigh countries, Olympic programs are propped upwardly by government funding, merely the U.Southward. Squad relies almost solely on sponsorships, charity, revenue from programming and memberships, and broadcast fees.
When mean solar day-to-day revenues dried upward in 2020, the national team of a country that won a world-leading 653 medals between 2000-2020 was reduced to applying for government assistance meant for struggling modest businesses.
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Source: https://www.gobankingrates.com/money/economy/where-does-olympic-funding-come-from/
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