The Olympics and other sporting events are becoming too costly
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For at least a year and a half, the Australian state of Victoria has been preparing to host the 2026 Commonwealth Games– the sporting festival held every four years, mostly attended by countries formerly part of the British Empire. But last week, the state government threw in the towel. The costs had risen from the original US$1.75 billion to US$4.7 billion. The price is too high, Victoria’s Prime Minister said at a press conference announcing the state’s formal departure as host.
It’s tempting to think of this as just a Commonwealth Games thing. The original host of the 2022 Games, the city of Durban in South Africa, gave up So. (“We’ve done our best, but we can’t go beyond that.” said the South African sports minister. “If the country says we don’t have that money, we can’t.) For the 2026 edition, five cities submitted bids — and then withdrew them over concerns about hosting prices. Already, People wonder when the games as a company are all over.
But the truth is: every Hosting a major sports tournament is becoming more and more expensive. The Paris Olympics in 2024, for example is expected to cost $8.5 billion– and there’s still a full year of unexpected expenses piling up. To put this number in context: Emmanuel Macron, the French President, recently implemented Deeply unpopular pension reforms to avoid a $14.8 billion deficit by 2030. And the $4.7 billion bill Victoria was faced with for the 2026 Commonwealth Games? It dwarfs the $1.41 billion in losses the state has suffered a single bushfire season.
Of course, public budgets have always been pulled in different directions. But cities that bid to host the Olympics half a century ago were not simultaneously vying for funds to deal with the impact hellish heat, Forest fires, rising sea leveland other impacts of climate change. And pressures that governments previously felt to fund social programs have arguably increased with wealth inequality more pronounced than for decades.
Inevitably, it seems, the governments that can best afford the contract to host global events will be those with plenty of money and/or unaccountable to their citizens. (Witness Saudi Arabia’s lavish sportswear.) And the sport’s crown jewels — the prestigious tournaments, the blue-chip teams — will prove out of reach for almost everyone else.
QUOTABLE
“I’ve made a lot of difficult decisions in this job and made very difficult decisions. This isn’t one of them. Honestly, A$6-7 billion for a 12-day sporting event? We do not do that. It’s not value for money. It’s all a cost, not a benefit.”
–Daniel Andrews, the Prime Minister of Victoria, at a press conference on July 18
INFRA TRENCH
An argument that has been made frequently throughout the history of the modern Olympic Games or the FIFA World Cup is that the infrastructure built for such an event would serve a country for decades to come. In other words, the expense of hosting an Olympics wasn’t just limited to a few weeks of running, jumping, and swimming. It was an investment in the sporting and urban future of the city.
The basic truth of this theory has often been discussed. However, a new counter-argument is that cities now need investment in a different future. Tokyo built four elevated expressways and 50 miles of roads to host the 1964 Olympics. Four years later, Mexico City built Olympic villages that were converted into luxury condominiums. Barcelona opened new hotels in 1992.
Today, however, Tokyo needs to subsidize better insulation of its existing buildings, replacing power poles with underground cables to protect them from storms and rain. and to protect yourself from tropical cyclones. Mexico City must expand the power grid to withstand heat waves. Barcelona have embarked on a mission to build thousands of units of public housing in a hurry.
Cities still need infrastructure. It’s just that the infrastructure they need today isn’t the kind that kits them out for a brief sporting extravaganza.
A BIG DEAL
$220 billion: How much Qatar spent to host the 2022 FIFA World Cup
The cost of hosting sports tournaments had soared in the 2000s, reaching a massive peak in 2014 when Russia squandered $51 billion at the Sochi Winter Olympics. However, the World Cup in Qatar clearly outperformed them all, costing five times more than the seven tournaments before it put together.
Qatar’s draft law is likely to remain a statistical outlier: very, very few countries have the ability to spend a fifth of a trillion dollars on a one-off event. But it could remain as a paragon for a coming sporting future, where international tournaments will tend to migrate from one enormously wealthy country to another.
ONE 💸 THING
Fears about the cost of a high-priced sporting event are nothing new. When the very first modern Olympic Games were organized, they returned to Greece, the site of the ancient Olympic Games. The games were planned for 1896, but by 1894 the Greek organizers realized they were spending far too much. Greece is “regrettably bankrupt,” its prime minister said, trying to pull out. The organizing committee resigned. One Olympian later recalled: “[I]It didn’t seem certain that the Games would be a disastrous failure.”
The Crown Prince of Greece took power. Part of the revenue came from public donations as well as pre-sales of souvenir stamps and medals. One industrialist, George Averoff, donated a million gold drachmas, nearly a quarter of the event’s total cost.
The ghost wasn’t buried yet. Eight years later, Chicago – chosen to host the 1904 Olympic Games – officially changed its mind and transferred the Games to the International Olympic Committee. US President Theodore Roosevelt had to step in and find an alternative venue: St. Louis. It would be decades before London, in 1948, became the first Olympic host to officially turn a profit – and more decades until 2022 in Qatar, when even the slightest notion of winning went completely out of the window.
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I wish you a cheap weekend,
–Samanth Subramanian, global news editor