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Mega events, mega budgets
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At the 2013 edition of the Doha GOALS forum, a plenary session facilitated by Lord Mandelson on the rising cost of mega events prompted a lively discussion.

Rising costs

The 1948 London Olympics cost an estimated $36 million in today’s currency,” Lord Mandelson said after reminding the audience that Rio 2014 is estimated to cost Brazil $15 billion and its 2016 Summer Olympics another $15 billion. While these numbers are staggering, they pale in comparison to the estimated $51 billion the Sochi Winter Games are set to cost.

However, not everyone on the panel appeared concerned by these rising costs. Deedee Corradini, President of the International Women’s Forum and former Mayor of Salt Lake City shared how the 2002 Winter Olympics in Salt Lake City resulted in a $100 million surplus and an estimated $5 billion economic output. Corradini continued, “The soft result was that it put Salt Lake City on the map.”

An exception to the rule
While the Salt Lake City Games is an often-quoted success story by mega event bidders, Victor Matheson, Sports Economist at the College of the Holy Cross, commented that the 2002 Winter Olympics was an exception to the rule that typically results in a financial loss for the hosts. More often than not, he commented, the actual cost is higher than projected and the benefit is lower.

Exacerbating the issue is a significant rise in security costs: $50 million at the 1996 games in Atlanta, $250 million at the 2000 games in Sydney and $1.6 billion at the 2004 games in Greece.

Who can afford to play host?
The discussion turned to implications of these rising costs for developing countries where a chance to play host is equally desired. Penalva Cézar, Secretary General of the Mozambique Olympic Committee shared how hosting the 2011 All-African-Games improved the infrastructure of his country. Diamil Faye, President and CEO of JAPPO Sports Consulting in Senegal, was of a similar opinion, “The games present a huge opportunity for young, emerging, developing nations.”

Lord Mandelson concluded by asking the panel a series of questions, including:

  • Would the astronomical amounts of money being spent on mega events not be better spent elsewhere, particularly in developing countries where infrastructure and education are pressing issues?
  • How can mega events be run on a significantly smaller budget?
  • Can we introduce an international mechanism or system that sees these costs going down and helps provide developing countries with the resources required to play host?

The benefits of hosting a mega event are clear: infrastructure development, tourism and international prestige to name a few. However, the rising cost of hosting mega events casts a dark shadow on the viability of future events being hosted by developing countries.

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