Is it worth the trouble to organise an Olympic event?

Recent findings show that hosting a sports mega-event is one of the largest financial risks that a city and a country’s economy may face. This paper is based on research at the University of Oxford which looks at the costs and cost overruns of the Olympic Winter and Summer Games compared from 1960 to 2012.

Organising the event
With the Winter Olympics held between 7 and 23 February 2014 in the Russian city of Sochi, discussions are back on the table. Event organisers have spent 50 billion dollars in infrastructure, going over the initial budget of 12 billion.

A study published in 2012 by the University of Oxford sought to answer the question.
From the official data presented in the application and official reports by the International Olympic Committee, researchers were able to compare figures over 50 years. The arguments for organising the Olympic Games are based on the tangible and intangible benefits the event brings to the city and the country.

Returns on hosting a event
Promises include getting returns on ticket sales, the creation of new jobs and increased economic activity through tourism, as well as promotion of the city, civic pride and cultural exchange to promote sport.

On promotion and participation in sport there are other studies that show how mega-events have no effect on sports participation. In the UK, for example, the participation of citizens in sports fell from 280,000 to 220,000 people in 2012 to 2013 (Sparre, 2013 Play the Game, 2013).

The findings in different studies (Anzsar, A. & B. Flyvbjerg Buzier ; Bondonio , P. & Campaniello cited by Flyvbjerg & Stewart , 2012) show that it is not as easy to compensate for the enormous costs of these events as their promoters suggest. Cities that have won the seat to host the Olympic Games have paid a high price.