The Economic Effects of the Olympics
The Olympic Games is a sporting event that attracts worldwide attention. People travel from different parts of the world to participate in the Games, or to watch and support. Countries that are hosting the Games have to prepare to welcome this great number of visitors. They also have to set up all the equipments that would be needed. Hosting the Olympics is an expensive project, and it always leaves an effect on the host country. These effects may or may not be associated to the Games, and there are positive and negative effects. The area most affected by the event is the economics of the hosting country, as well as that of participating countries. The government and environment are other strongly affected areas. Determining whether the effects are advantageous or disadvantageous depends on the perspective of the viewer. Throughout the history of the Olympics, each hosting country has experienced a different effect. Regardless of some disasters linked to hosting the Games, countries still continue to desire to be hosts.
Hosting the Olympics, in other words, is throwing the world’s largest party—and paying for it. As amusing as this may sound on the surface, financially, it does not sound especially attractive. However, there are different reasons to why a country would want to host the Olympics. Nowadays hosting the Games is like a business investment. It is a country’s way of putting itself “out there.” Some cities use the Olympics as a way to push through fast new infrastructure projects, such as airports and subways. It is an opportunity for them to be lifted from a backwards state of economy into “a new city of the future.” Barcelona in 1992 is an example of a city that was able to successfully take advantage of this event. For most political leaders, hosting the Olympics is about creating a legacy that will be remembered for generations. For others it is a way to promote transportation systems, decrease the rate of unemployment in their country, and lead economic trends. The Beijing games were intended to show off China’s spending and organisational power. On the other hand, the London Games was a means of bringing to life a poor part of the capital, East London, speedily. Tokyo hopes to boost Japans economy in the 2020 games. Whatever a country’s reasons may be, they have to give a lot in order to get.
The government of the host countries invests in the Games expecting to “make money back.” However, not all the funds come from the country’s government. The International Olympic Committee (IOC) contributes funds to the hosting country. The primary source of revenue comes from the biddings. IOC sets up distribution of tickets, and most importantly, they take bids on where the Games will be hosted. There are other organizations such as NBC who help fund. In 2008, they paid $2.2 billion for the distribution of the water games of 2010 in Vancouver, and to the Summer Games of 2012 in London. When they fund, they expect to make their money back—and they do, all the time. Another way the games are funded is through donations. Those in high class who are passionate about a certain sport might choose to provide the facilities needed for the game. Money from advertisers also contributes to help fund the games.
When a country hosts the Olympic Games, there is always loss is one area, and gain in another. Some of the effects are immediate and ephemeral, while others come gradually, but last longer. Something might be an advantage to a group and a disadvantage to another group at the same time. The effects cannot be strictly classified as positive or negative. The Olympics is a powerful marketing tool. It creates a lot of business opportunities. The brand name “Olympic Games” attracts outward and inward investors. The Logo is used for souvenirs, sports equipments, clothing, and other creative things. Media exposure promotes the city as somewhere suitable for world class sport...
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