Who Wins When The Olympics Come Around? Not The Local Economy

The Olympics are a time for celebration: the best athletes in the world competing and representing their nation for the top spot in their sport. But are the games an opportunity for investment?

A report from the Council on Foreign Relations says no.

“A growing number of economists argue that both the short- and long-term benefits of hosting the games are at best exaggerated and at worst nonexistent, leaving many host countries with large debts and maintenance liabilities,” the report said.

Why It Matters: Every Olympics since the 1960s have seen major cost overruns, likely leading Denver to be the first and only city to reject its offer to host the games in 1972.

A 2019 report stated that Tokyo Olympic organizers are paying $12.6 billion to host this year’s games, per Associated Press reporting.

While still participating in advertising around the event, some companies are starting to distance themselves the games. Panasonic PCRFF decided not to send its CEO to the opening ceremony, while Toyota TOYOF has jettisoned its plan to run Olympic-related television commercials in Japan.

What Else: NBCUniversal, a subsidiary of Comcast CMCSA, likely sees revenue generated from the events, as the company has exclusive rights to broadcast the event until 2032 for which it has paid billions.

The vast majority of the revenue form the event — 73% — comes from broadcasting rights, according to an International Olympic Committee report.
Photo: Unsplash Photo by Ryunosuke Kikuno.

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Posted In: NewsSportsEventsEconomicsGeneralOlympicsTokyo Olympics
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