The summer and winter Olympic Games are undeniably two of the world’s most prestigious sporting events, and hosting either of these mammoth occasions is generally seen as a privilege and an economic opportunity for the host city. However, taking a deeper look into the potentially crippling economic costs combined with the minimal benefit for cities hosting the games reveals massive issues that leave future hosting bids in dangerously short supply.

For most of the twentieth century, hosting either the Summer or the Winter Olympics was quite a manageable task for the host cities. The games were mostly publicly funded, and the low levels of television coverage combined with a small number of entries and events resulted in costs usually ranging between $400 million and $6 billion. Since then, the hosting costs have spiralled upwards, with the standout figures being the massive $52.7 billion needed for Beijing 2008 and the $59.7 billion needed for Sochi Winter Olympics of 2014. These costs mainly cover the building of general infrastructure like housing and transportation, which can require up to $50 billion. In fact, more than 80% of Sochi’s budget for the 2014 games was spent on building new, non-sport related infrastructure, and Beijing spent over $20 billion on the construction of new roads, rail lines and airports alone. Security costs have also skyrocketed over the last century, the notable high in this field being the $1.5 billion spent on security for the Athens 2004 Olympics. In fact, even preparing for the bid itself can be expensive, as the planning and consulting for an Olympic bid can often cost up to $100 million. Tokyo spent around $150 million in 2009 for their 2016 summer Olympics bid, which ultimately failed as the games were given to Rio. These sunk costs from failed bids makes bidding even less attractive, as the prospect of wasting millions in a failed bid is often too great a risk for cities to bid in the first place. Large financial costs have meant that the games also have a high opportunity cost, as the money could have been better spent on very valuable and important projects such as the development of cities’ public transport, education system and the protection of the environment.

Another fairly unnoticed cost of hosting the games are the “white elephants”, the large, mostly unused sports facilities that remain a burden to cities for decades after the Olympics. Beijing’s iconic “Bird’s Nest” athletics stadium cost a huge $423 million to build, and requires an additional $10 million a year for essential maintenance, despite being nearly completely unused since 2008. Similarly, London’s Queen Elizabeth Olympic Park haemorrhaged more than £30 million due to maintenance costs from 2018 to 2022.

Meanwhile, the revenues generated only cover a small proportion of the expenditures. The games with the highest revenue in history were the Rio 2016 games, generating $2.9 billion, which seems impressive, until the $13 billion of costs are taken into account. Surprisingly, the only games ever to turn a profit was the 1984 Los Angeles Olympics, which made a profit of $215 million, as a result of the reusing of city infrastructure and the sharp jump in tv coverage of sports in the 1980’s. It could be argued that host cities do receive additional benefits from a rise in employment and tourism, however, the employment surge is usually temporary, and the long-term effect can be mixed and unpredictable. While Barcelona reported a significant long-term increase in tourism after hosting the 1992 summer games, Salt Lake City, Beijing and London all experienced declines in tourism after 2002, 2008 and 2012 respectively. Additionally, not all the profits and tv revenue go to the host city, as the International Olympic Committee (IOC) take 10% of the profits on top of half the tv revenue. This only adds insult to injury, making hosting the games even less economically justifiable for cities.

The combination of these huge costs and fairly minimal rewards leave the Olympic bidding situation looking bleak. Several cities have withdrawn bids over the past years, with Oslo and Stockholm pulling out of the winter 2022 bid, and all four of Boston, Budapest, Hamburg and Rome withdrawing from the summer 2024 one. This lack of candidates led to the IOC eagerly and unusually accepting both Paris’s 2024 bid and Los Angeles’s 2028 simultaneously to ensure the future of the summer games is secure until 2032 at least.

So are there any solutions to the situation? Firstly, the IOC could reduce their large cut of the profits or begin actively selecting bids with less ambitious plans, as they’ve recently been accused of selecting bids that present the most expensive and risky economic plans. Author and economist Andrew Zimbalist believes one city should become the permanent summer Olympics host, so that the costs for building new infrastructure is eliminated, and stadiums can be reused every four years. My favourite solution however is to spread the games out, and have different events hosted by different cities all over the world, while only the opening and closing ceremonies are held by the ‘host’ city. This means individual cities don’t have to take on the massive infrastructure and security costs for the entire games, but rather can use a single stadium or venue alongside existing city infrastructure to host a single event like swimming or athletics. In this case, the benefits for cities are still fairly small, as each city will receive a very small revenue compared with the revenue from hosting every event simultaneously, and the effects on tourism and employment in the long term will vary. However, the huge reduction in costs for each city will result in the overall losses being far less severe. Besides, this option allows dozens of cities to be involved every 4 years, bringing a new sense of multiculturalism and internationalism to each Olympic Games.