Mainz-Paris study: Cost overruns of Olympic Games comparable to other large-scale projects

November 05, 2018

The question of costs of Olympic Games has been widely debated in recent years and fueled considerations about whether holding the Games is justified at all in view of the overall costs and especially with regard to the budget overrun. However, there is often a lack of concrete data to show exactly which costs can be attributed to the Games. Sports economists at Johannes Gutenberg University Mainz (JGU) in Germany in cooperation with the Université Paris 1 Panthéon-Sorbonne in France have now compiled a comprehensive list of expenditures and revenues of the Olympic Games from Sydney 2000 to PyeongChang 2018. The results show that the costs of organizing the Olympic Games (OCOG budget) were always covered by revenues and even led to profits. Although infrastructure costs, which are usually financed using taxpayers' money, exceeded the original projections, these were in line with those of other large-scale projects. For the study, the sports scientists analyzed about 280 primarily non-public documents on all Olympic Games since 2000. The 170-page study will soon be published by the Springer Verlag publishing company. A summary with the most significant results is already available.

Calgary will be holding a public opinion poll on November 13th regarding the 2026 Olympic Winter Games. Since many cities in recent years rejected hosting the Winter Games, even during the bidding period, the upcoming public opinion poll is another indication of the volatile situation surrounding the large-scale event and its billions in costs. "Indeed, the Games have become increasingly more extravagant and more expensive," said Professor Holger Preuß of the Institute of Sports Science at Mainz University. In the last 20 years, however, the Games have remained relatively constant with regard to the number of athletes, the sports sites, and the number of medals. Preuß's group thus researched the last five Summer Games and five Winter Games since Sydney 2000. "We were able to compile the largest collection of financial information on the Olympic Games in the world," said Preuß. The data include internal financial information of the International Olympic Committee (IOC), numbers from state archives, official reports, bidding documents, and private archives. For all Games, they cover a period of eight years from the candidature phase until the actual Games, so as to determine precise cost and revenue overruns and underruns.

The Mainz-Paris study confirms that there are cases where the originally planned budgets for infrastructure were exceeded, but not to the extent often propagated in the media. "With major infrastructure investments, such as stadia, overruns are in the same order of magnitude as those found in other large-scale projects," stated Preuß. Overruns of the Olympic Games between 2000 and 2012 represented between 29 percent and 56 percent of the original estimates. The operational costs of organizing the Olympic Games, which arise specifically from organizing events like the opening ceremony and the competitions, are usually covered by revenues from the sale of media rights or international sponsorships, for example. In some cases, there are even profits.
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The study on "Cost and Revenue Overruns of the Olympic Games 2000-2018" was produced by Professor Holger Preuß and Maike Weitzmann of Johannes Gutenberg University Mainz and Professor Wladimir Andreff, one of the most renowned sports economists and Professor Emeritus of the Université Paris 1 Panthéon-Sorbonne. The summary is available at http://www.sport.uni-mainz.de/Preuss/Download%20public/20181023_Executive%20summary%20Cost%20and%20Revenue%20Overrun.pdf.

Johannes Gutenberg Universitaet Mainz

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