Forty years after the financially disastrous Montreal Olympics, cities around the world are finally realising that hosting the Olympics does not stack up. Brazilians, now experiencing a deep recession, have certainly lost much enthusiasm for the upcoming Rio Olympics (e.g. see this CNN report). So it should raise eyebrows that South-East Queensland Councils are considering a 2028 Olympics bid, as was reported last week.
Yesterday, the Financial Times published an excellent article (Rio 2016: The high price of Olympic glory, which I suspect is pay-walled, sorry) discussing the poor economic return from hosting the Olympics. It noted:
Researchers at the Saïd Business School, in Oxford, analysed 30 summer and winter games and released their findings last month. Though contested vigorously by the IOC, the study claims none of the games came in within their initial budget and nearly half exceeded targets by more than 100 per cent.
Andrew Zimbalist, an economics professor and author of Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup estimates that the summer Olympics can lead to deficits of up to $15bn.
“It is sometimes argued that the deficit will be made up in the long run through increased tourism, trade and investment,” he says “The data doesn’t suggest that happens.”
An analysis of the 2000 Sydney Olympics by leading Australian economic modellers John Madden and James Giesecke found that the Games did not provide a net economic benefit to Australia. In a Conversation article (Hosting the Olympics: Cash cow or money pit?) they noted:
…rather than producing an economic benefit the Sydney Games actually reduced Australian household consumption by $2.1 billion.
As the author’s noted, this was very close to the estimated taxpayers’ contribution of $2.2 billion, as the Games provided no significant ongoing economic benefit to Australia, such as through higher tourism.
SEQ should be very wary of bidding for the Olympics.