gE Blog Series: Winter Olympics Part 4 - Financial Costs of Hosting a Winter Olympics

Just how much does it cost to host an Olympics? The 2014 Winter Olympics in Sochi, Russia are more expensive than every other Winter Olympics combined. The cost is projected to be around $51 billion, which is ten million dollars more than the 2012 Summer Olympics in Beijing, China. This money goes towards construction, transportation, hospitality, security, lodging and more. For events like the Olympics, it is starting to look like a waste of money for all of the over-extravagant, luxurious decorations and celebrations that take place. It has become less about the athletics, and more about which country can make their Olympics look the best to the world. A country like Russia has a lot larger problems that it should allocate $51 billion to, especially if they are trying to clear up their image.

It is difficult to analyze how beneficial the Olympic Games are to a country or city’s economy. When the United Kingdom hosted the 2012 Summer Olympic Games in London, they spent $15 billion on the games, and the site is still used a lot today. The campus is crowded, and it can be assumed that maybe the $15 billion was a good investment in that case. However, rewind a decade to the 2004 Summer Olympic Games in Athens, Greece. The country also spent around $15 billion on the Olympics that summer, and the expenditures from that event have been traced to be a major cause of the current economic crisis. Today, the campus that the Olympics were hosted on is seen as degrading and dormant, and Greece is losing money on maintaining these facilities with no economic use. The Olympics are a fantastic party, but not the best use of a country’s money.

The 2014 Winter Olympics in Sochi, Russia could likely become a money pit after the games. Will Russia be able to utilize the extravagant stadiums and transportation it has created for this three week event for the next twenty years? Probably not. The Games have cost more than three times the education budget and two times the health budget of Russia. It could allow Putin to portray Russia as becoming a liberalized market, but if the cost of the games doesn’t draw profits and economic success to Sochi or Russia as a whole, it is going to be seen as a huge failure.