How Much Does Hosting the Olympics Cost?

The Olympics is one of the most expensive major events a country can host. Its sports-related costs average $12 billion, while nonsports-related costs are often far higher.

The high-cost sporting event lost billions of dollars to the host countries, nearly bankrupting them. The cost of the 2020 Tokyo Olympics was increased by $2.8 billion due to the event’s postponement.

See the full spending cost of host countries organizing an international multi-sport event.

Highlights of the Article

• Of the $20 billion 2016 Summer Olympics cost, Rio de Janeiro shared $13 billion.
• The $7 billion Tokyo Olympics projected budget is up to $15 billion.
• Sochi 2014 was the most expensive Olympic Games.
• General infrastructure worth $5 billion to $50 billion.
• Denver was the first city to reject an Olympics.
• The 1976 Montreal Summer Olympics projected budget was more than the actual cost.
• Only one bidder wanted to host the 1984 Summer Olympics.
• The hosting costs made cities withdraw from 2022, 2024, and 2028 bids.

How Much Does Hosting an Olympics Cost?

Cities are motivated to bid for the Olympics for the promised infrastructure development, tourism promotion, improved public health, a month in the limelight, and the unending appreciation of citizens.

But at what cost? Considering the general infrastructure, sports infrastructure, and operational costs, the economic repercussions will undoubtedly be so great that they will far exceed the spending cost.

The final price tag has significantly changed from city to city over the years. Take a look at the expense of hosting a prestigious athletic event.

Olympics Cost Statistics

Revenues barely cover a small portion of expenses due to the high hosting costs. Beijing’s $40 billion-worth Olympics gained $3.6 billion, whereas London’s $18 billion had $5.2 billion.

The International Olympic Committee (IOC) retains over half of all broadcast revenue, often the largest sum of money made from the games. Therefore, much of the return goes to someone other than the host.

Here is the estimated cost to stage an Olympics:

1. Rio shouldered $13 billion of Brazil’s $20 billion cost for the 2016 Summer Olympics.

(Bloomberg)

Due to a severe economic downturn, Rio needed a $900 million bailout from the federal government to meet the expense of policing the Olympics and could not pay all its public employees.

The city has had to make significant infrastructure investments to revitalize some of its poor districts. However, as a result, most of these facilities have been left unused or scarcely utilized.

2. Tokyo Olympics exceeded $15 billion from its original $7 billion projected budget.

(CFR)

The 2020 Olympics were “among the costliest on record.” The pre-pandemic audit was $28 billion, now at $35 billion. Tokyo needed infrastructure investments but mostly had questionable long-term uses.

The 68,500-seat National Stadium was the most expensive venue, costing Tokyo $1.4 billion. It was empty throughout the games and will reportedly cost $22 million annually in upkeep costs.

3. Sochi 2014 Winter Olympics were the most costly games ever staged.

(Business Insider)

Compared with the Summer Games, Sochi 2014 remains the most costly at $21.9 billion. The initial budget was $12 billion when Russia won the bid in 2007.

The value of a single road and rail link between the city and the nearby ski competition venue was greater than the 2010 Winter Olympics in Vancouver.

It’s noteworthy for a Winter Games to cost this much, as they usually have lower costs than the Summer Games.

Statistics Olympics Hosting Expenses

Cities spend $50 million to $100 million in planning, preparing, and bidding for the IOC. After being selected to host, they have almost a decade to prepare for athletes and tourists.

As participants compete in 100 events in the Winter Games and more than 10,000 athletes compete in 300 events in the Summer Games, host cities needed a spacious location and highly specialized sports facilities to hold the event.

Hosting the Olympics became recently more expensive. Still, the cost varies per host city. Take a look at where all their money went.

4. IOC requires hosting cities with at least 40 thousand hotel rooms.

(American Economic Association)

With the IOC’s accommodation requirement, Rio needed to construct 15 thousand new hotel rooms in 2016. Roads, train lines, and airports needed to be upgraded or constructed.

There was a need for more general infrastructure, especially housing and transportation, to host an Olympics.

5. General infrastructure costs $5 billion to $50 billion above.

(CFR)

Many countries argue that their spending will have an effect in the long run. Sochi’s $50 billion+ budget went to new non-sports infrastructure. 

More than half of Beijing’s $45 billion budget went to rail, roads, and airports, and almost a fourth to environmental cleanup efforts.

6. Security costs have been $1 billion to $2 billion.

(CFR)

The 9/11 attack escalated security costs quickly. In 2000, Sydney spent $250 million, while in 2004, Athens spent $1.5 billion. The costs have remained the same since then.

7. Operating costs comprise a smaller but significant chunk of the hosts’ Olympics budget.

(CFR)

Expensive facilities with limited use after the Olympics have incurred long-term expenses. Sydney’s Olympic stadium costs $30 million/year to maintain, while Beijing’s “Bird’s Nest” costs $10 million/year.

Almost all the facilities built for the 2004 Athens Olympics are now in ruins. Gangwon-do expects an $8.5 million annual deficit due to the upkeep of facilities, being a major part of the 2018 Olympics.

Trends in Olympics Hosting Spending

Hosting the Olympic Games was a manageable burden in the 20th century. The US and Europe’s economic disposition and advanced infrastructure allowed them to publicly fund the games without expecting any returns.

However, the Olympics’ reputation has been tainted since the 1968 Mexico Games’ killed protesters and the 1972 Munich Games attack on Israeli athletes. The public’s confidence in incurring debt to host the games decreased.

Let’s look back at the previous host cities to better understand these Olympics cost trends.

9. In 1972, Denver became the first chosen host city to reject its Olympics.

(The Guardian)

Denver rejected hosting the 1976 Winter Olympics due to a lack of funding and environmental concerns. By passing a referendum, the majority was on the same page about refusing additional burdens.

The Olympics went to Innsbruck, Austria, the 1964 host, which thus already had the necessary facilities and infrastructure.

10. The $124 million projected cost for the 1976 Montreal Summer Olympics was billions short of the actual cost.

(CBC News)

The Montreal Games embodied the fiscal risks of hosting. Construction delays and cost overruns for a new stadium left taxpayers with a $1.5 billion debt that took almost three decades to pay off.

The costs included the Olympic Village, a post-modern apartment building complex, a sports recreation complex, outdoor facilities, parking, and the Vélodrome.

11. The only city that bid in the 1984 Summer Olympics was Los Angeles.

(CFR)

In 1979, Los Angeles negotiated exceptionally favorable terms with the organizing committee. Most importantly, they relied on existing stadiums and infrastructure rather than promising lavish new facilities.

The dramatic increase in TV broadcast revenue contributed to a $215 million operational surplus, making LA the only city to earn from the Olympics.

12. After 1988, bidding by developing countries more than tripled.

(CFR)

Following Los Angeles‘ success, more cities began to submit bids, from two in the 1988 games to twelve in the 2004 games. Brazil, China, and Russia were eager to use the games to showcase their advancement in the international arena.

However, these countries exhausted a massive amount of the required infrastructure: 

• 2014 Sochi Winter Games ($50B)
• 2016 Rio de Janeiro Summer Games ($20B) 
• 2018 Pyeongchang Winter Games ($13B)

13. Several cities withdrew their bids over cost concerns for the 2022, 2024, and 2028 games.

(TIME, BBC)

After realizing the costs, Beijing lost its bid competitors for 2022 as Stockholm, Sweden, Oslo, and Norway withdrew.

Budapest, Hungary, Hamburg, Germany, and Rome also withdrew their bids for 2024, leaving Los Angeles and Paris. The IOC decided these two will take turns hosting in 2024 and 2028.

Conclusion

As “it takes money to make money,” hosting an Olympics is a gamble. While it provides job opportunities, draws tourists, and boosts overall economic output, the costs still outweigh the benefits.

While it’s not unusual to overrun an Olympic budget, the level of overspending is still remarkable. The growing hosting costs have led to renewed skepticism, and considering a permanent Olympic venue would be more sensible.