2024

Mangeloja, Esa

The article provides a sports-historical overview of the history of the Olympics (1896-2024) from business, national economic, and sports economics perspectives. The primary focus is on the most recent Summer Olympics and their economic success. The costs of hosting the Olympics and the potential economic benefits are examined from both theoretical and empirical perspectives. Additionally, the costs and benefits of the Games are analyzed in both the short and long term. The literature review identifies risk factors related to organizing the Olympics and their success and maps out the difficulties in pre-assessing costs. Previous studies have found that the economic success potential of hosting the Olympics is generally overestimated. While the International Olympic Committee (IOC) benefits from the Olympics, local taxpayers often end up bearing the costs. The article also considers the intangible benefits of hosting the Olympics and aims to outline the motivational factors for organizing the Games (such as tourism, infrastructure development, and numerous intangible effects), even if their economic expected value is negative. Usually, a closed bidding process takes place between potential hosting entities for organizing the Games. It is observed that the economic impact of historical Olympics on host economies is generally limited, unevenly distributed, and often negative, and that potential hosting entities in the bidding process should not rely on overly optimistic scenarios of preliminary assessments, but rather perform a thorough and realistic evaluation of the actual costs and benefits of hosting such events.