---
title: "Running on fumes — the Games are expensive to host, but Paris may well turn a profit"
description: "Hosting the spectacle has cost many cities dearly in the past. Paris might be able to buck the trend by using existing facilities and low-cost temporary venues where possible."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "OLYMPIC MONEY PIT"
author: "Sid Panayi and Borja García"
author_url: "https://www.dailymaverick.co.za/author/sid-panayi-and-borja-garcia/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-08-04-running-on-fumes-games-are-costly-but-paris-may-turn-a-profit/"
published: "2024-08-04T13:43:43"
updated: "2024-08-05T06:14:22"
lang: "en-ZA"
word_count: 1010
---

# Running on fumes — the Games are expensive to host, but Paris may well turn a profit

> Hosting the spectacle has cost many cities dearly in the past. Paris might be able to buck the trend by using existing facilities and low-cost temporary venues where possible.

By Sid Panayi and Borja García · Published 4 August 2024, 15:43 SAST · Updated 5 August 2024, 08:14 SAST

## Key points
- Paris is abuzz with the excitement of hosting the first Olympic Games since 1924, but as history has shown, the financial burden of hosting such a grand event may not be as glamorous as the spectacle itself, with past host cities like Tokyo and Rio blowing their budgets by alarming percentages, prompting a decline in formal bids to host future Games and raising questions about the long-term economic impact on taxpayers.
- Paris hosts first Olympic Games since 1924, bringing excitement and tourism to the city.
- Evidence shows host cities often overspend on Olympics, with Tokyo 2021 and Rio 2016 exceeding budgets by over 200%.
- Decline in bids to host Games due to financial strain on cities and negative public opinion.
- Despite costs, Olympics can leave positive legacies, such as London 2012's regeneration impact.

## Content

Many of the world’s best athletes are currently competing in the first Olympic Games to be held in Paris since 1924.

The French capital is buoyant with excitement and its local businesses filled with paying tourists from all over the world. Indeed, it’s difficult not to be tempted into booking a weekend getaway to see the spectacle up close.

But is the Olympics really a good deal for host cities? The evidence suggests a resounding no. Host cities almost always blow their budget on the Games, having to invest heavily in specific sporting facilities, as well as accommodation and transportation for the influx of athletes and tourists.

The delayed Tokyo Games in 2021, for example, ended up costing an [estimated $15.4-billion](https://apnews.com/article/2020-tokyo-olympics-games-total-cost-8ec49ea2ea9d7316f37ffd20770a2742), exceeding the proposed budget by 244%. And it was a similar story four years before – the Rio Olympics [cost 352% more](https://www.statista.com/chart/5424/the-massive-costs-behind-the-olympic-games/) than the initial proposal.

As part of the bidding process to stage the Games, potential host cities and governments are required to [guarantee that they will cover](https://journals.sagepub.com/doi/full/10.1177/0308518X20958724) these costly overruns. So, given the financial drain a home Olympics so often proves to be, it is no surprise that there has been a steady decline in the number of formal bids to host the Games over the past decade.

A total of 11 cities submitted applications to host the 2004 Athens Olympics, followed by 10 bids for Beijing in 2008 and nine for London in 2012.

After London there was a significant reduction. The 2016 Olympics was awarded to Rio from just four bids, 2020 went to Tokyo from three and there were only two bids submitted by cities wanting to host the 2024 Games. This declining interest prompted the International Olympic Committee (IOC) to award the 2028 Olympics to Los Angeles, the only other bidder for the 2024 Games, without undertaking a public bidding process.

The reduced interest in hosting the Games has been influenced in large part by negative public opinion. The cost of the 2004 Olympics, for example, was [thought by many](https://www.bloomberg.com/news/articles/2012-08-02/how-the-2004-olympics-triggered-greeces-decline?embedded-checkout=true) to have triggered Greece’s financial crisis.

Within days of the closing ceremony, Greece warned the euro area that its public debt and deficit figures would be worse than expected. It subsequently posted a deficit more than double the eurozone limit and years of [economic hardship](https://www.bbc.co.uk/news/world-europe-45245969) followed. More than 400,000 people emigrated; by 2013, the unemployment rate for people aged under 25 had reached 58%.

There is also a feeling among the public that the cost of hosting the Olympics will ultimately land at the feet of the taxpayer.

Montreal, which hosted the Games in 1976 and where a mammoth US$1.1-billion was spent on a new Olympic stadium alone, famously needed decades to [pay off its debt](https://www.theguardian.com/cities/2016/jul/06/40-year-hangover-1976-olympic-games-broke-montreal-canada).

Fear of the massive costs involved led both [Boston](https://www.theguardian.com/sport/2015/jul/27/boston-mayor-2024-olympic-bid-doubt) and [Budapest](https://www.reuters.com/article/sports/budapest-withdraws-bid-to-host-2024-olympic-games-idUSKBN16842H/) to withdraw their bids to host the 2024 Olympic Games, citing a lack of public support and strong political objections.

In 2015, the then mayor of Boston, Martin Walsh, said hosting the Games was “a commitment that I can’t make without ensuring the city and its residents will be protected”. He added: “I refuse to mortgage the future of the city away.”

In Budapest, more than 250,000 people [signed a petition](https://www.nytimes.com/2017/02/22/sports/olympics/budapest-2024-summer-games.html) demanding that the city drop its bid and direct the money towards building modern hospitals and well-equipped schools.

But the Games are not always accompanied by a bleak legacy. In 1984, the Los Angeles Olympics was held using almost entirely pre-existing infrastructure. And that year, the Games turned a [$215-million profit](https://www.cfr.org/backgrounder/economics-hosting-olympic-games). There are reasons to believe Paris could follow suit. The organisers have, as far as possible, used [existing facilities](https://www.cnbc.com/video/2024/07/25/heres-why-paris-is-one-of-the-cheapest-olympics.html#:%7E:text=In%20contrast%2C%20the%202024%20Paris,the%20necessary%20venues%20already%20built.) and low-cost temporary venues.

This includes a stadium in the [shadow of the Eiffel Tower](https://olympics.com/en/paris-2024/venues/eiffel-tower-stadium) on the Champ de Mars that will host the beach volleyball. And, so far, the cost of the Games looks to have [stayed close](https://gfmag.com/economics-policy-regulation/2024-paris-games-olympics-finances-part-1/) to the original budget of $8.5-billion.

Hosting the Games can also provide lasting benefits for local communities to inherit, regardless of the cost. The London 2012 Olympics, for example, provided new facilities, housing and transport links that have contributed to the regeneration of the city’s eastern boroughs. In a poll conducted 10 years after the Games, [two-thirds of London adults](https://londonsport.org/wp-content/uploads/2022/07/London-2012-report.pdf) agreed that hosting the Olympics had left a positive legacy.

#### **Next steps for the IOC**

The IOC has now reformed its host bidding process by creating a less-public campaign for prospective host cities.

In 2021, Brisbane won the [right to host the 2032 Games](https://www.nytimes.com/2021/07/21/sports/olympics/brisbane-2032-summer-games.html) having been the first city to go through this new process.

The rationale behind this change was to stop cities trying to outbid each other competitively, which has previously caused excessive expenditure. There is hope this will eventually improve the damaged public perception of hosting the Games.

Rather than the city having to [adapt to the Games](https://www.sportspromedia.com/news/olympic-games-bidding-ioc-session/), the IOC has highlighted that there will be a greater emphasis on the games adapting to the city in the future. The plan for Los Angeles in 2028 is for [every venue](https://www.nbc.com/nbc-insider/2028-olympics-locations-venues-los-angeles-games) to either exist already or be temporary, which should have a dramatic effect on expenditure.

This increased flexibility allows governments to discuss the feasibility of hosting with the IOC without having to propose excessive and expensive changes to their cities.

Some feel these changes are not enough. There is a [belief among many economists](https://www.washingtonpost.com/news/wonk/wp/2013/08/27/economists-think-its-a-terrible-idea-for-d-c-to-host-the-2024-olympics/) that low- and middle-income countries should spare themselves the potential burden, and wealthier countries who can better absorb the costs should be the only viable hosts.

However, it’s important to remember that the Olympics has never been a cash machine. It is an event steeped in historical importance formed to promote talent excellence, respect and friendship – not to drive economic gain to a city directly. **DM**

*First published by*[*The Conversation*](https://theconversation.com/fewer-cities-can-afford-to-host-the-olympics-but-paris-2024-may-be-clever-enough-to-turn-a-profit-235480)*.*

*Sid Panayi is a PhD candidate in sport business at Loughborough University. Borja García is a reader in sport policy and governance at Loughborough University.*

*This story first appeared in our weekly*Daily Maverick 168*newspaper, which is available countrywide for R35.*

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