News olympics1

Published on October 19th, 2012


The Olympics – A Burden or a Profit for the Hosts?

Whether or not a city and a country should bid to host the Olympics is often a source of heated debates. For sure, the Olympics are a source of great national pride. But does hosting such an event yield positive economic benefits?

In 1976 Montreal hosted the Winter Olympics. Shortly after the city had been awarded the games, its Mayor Jean Drapeau made his famous statement “The Montreal Olympics can no more have a deficit than a man can have a baby.” He was soon to eat his words, as the games resulted in large cost overruns.

Before a bidding process the skeptics often raise the argument that the Olympics will be too expensive and that the potential for re-use is insufficient to justify construction of costly venues. Also, major sport events are associated with negative environmental and social externalities, which risk making the overall costs from playing host larger than the benefits.

On the other side of the table stand the advocates, arguing that the event will stimulate economic activity, increase export revenues, create positive publicity for the country and in turn lead to economic growth and increased levels of domestic and foreign investment.

In the literature on sport management, the lion’s share of researchers argue that there is no direct economic gain from being a host nation. They contend that the economic multipliers presented when arguing in favor of hosting a large event are usually over-estimated. Also, real revenue associated with hosting the Olympics is insignificant.


However, Professors Wolfgang Manning and Stan du Plessis highlight what they call the multidimensional benefits of hosting tournaments, which include direct, long term and also non-pecuniary benefits like political gains and a so-called “feel-good” factor.

Popular Social Science agrees that the prospect of economic gain is not the only driving force and plus side associated with arranging the Olympics. One need to take into account the positive factor that is hard to measure, namely that of national pride and joy.

Further reading:

Maennig, W. and du Plessis, S., (2007) “World Cup 2010: South African Economic Perspectives and Policy Challenges Informed by the Experience of Germany 2006” Contemporary Economic Policy, 25(4): 578–590.

Matheson, V. A. (2009) “Economic Multipliers and Mega-Event Analysis” International Journal of Sport Finance, 4(1): 63–70.

Tags: , ,

6 Responses to The Olympics – A Burden or a Profit for the Hosts?

  1. Tarjei says:

    I really don`t understand why the British people had so much against the fact that the U.K. spent so much money as hosts of the recent summers London Olympics when the fact is that the U.K. probably earned three times as much money by selling TV-Rights, Tourists attending the Olympic areanas buying food and much much more…………..I simply don`t understand the inhabitants of the U.K. thet criticized the British money spending by hosting the Olympics…………Off course the U.K. were in a financial recess but a country has to spend money to gain and earn money!!!

  2. My wife and i felt very delighted when Albert could deal with his inquiry via the precious recommendations he acquired from your very own web page. It is now and again perplexing to just possibly be giving for free information others might have been making money from. And we fully grasp we’ve got you to give thanks to because of that. The most important explanations you made, the simple blog menu, the relationships you can give support to

  3. I do not that much of a internet reader to be honest but your sites really nice, keep it up! I’ll go ahead and bookmark your website to come back later on. Many thanks

  4. Superman says:

    Excellent weblog right here! Additionally your site loads up very fast! What web host are you using? Can I get your affiliate link for your host? I desire my website loaded up as quickly as yours lol

  5. The way to says:

    I have often debated the points you made in your article with others. You did however, make some points I missed and I appreciate the fresh perspective on this subject.

  6. cheers for the brilliant content on your blog, I am very interested in this post and you have really helped me. I have just told a few of my friends about this on FaceBook and they love your content just as much as I do.

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Back to Top ↑