Olympic Games: faster, higher, stronger… And more expensive!

See the Olympic and Paralympic Games in Paris… and the end of financial obesity, respect for the environment, the profitability of equipment, a social benefit for disadvantaged regions? For around fifteen Olympics, summer and winter, the organizing countries have declined their commitments like so many unkept promises. Major competitions: a sport played between fools, and in the end it is public budgets that suffer. Coveted for the prestige and global influence they offer, they suffer from gigantism.

Originally, an implacable internal mechanism: the organizations in charge of these major events – the Olympic Games and the Football World Cup in the forefront – are obsessed with the quest for universalism. The International Olympic Committee (IOC) like the International Association Football Federation (FIFA) aspire to enroll as many countries as possible in their competitions. The first Games of the modern era, in 1896, had 12 participating nations; there were 121 in 1972; there will be 206 of them in Paris in July.

The first Games, in 1896, had 12 participating nations; there will be 206 of them in Paris.

Certainly, if the qualifications for the men’s football World Cup mobilize almost all countries, only those who dominated them meet for the global event – ​​the final phase. But this does not escape inflation: the new format, which will be inaugurated in 2026, will welcome 48 teams compared to 32 previously. For the summer JOPs, another factor maintains the bulimia: the number of events on the menu. From 43 in 1896, their number peaked at 339 in 2021 at the Tokyo Games. Paris displays quasi-stability with 329 events. And the number of athletes follows the curve, increasing from 5,100 in Tokyo in 1964 to more than 10,000 since 1996.

With such catalysts, it would not be surprising to see considerable growth in budgets. But no: in order to appear good managers and attractive in the face of competition, the applicant cities (that is to say their countries) for the organization of the JOP present outrageously optimistic performances and financial projections.

Calculating costs and comparing them from one event to another is a complicated and uncertain exercise. What scope for expenses? In the case of the Games, we distinguish the organization of the competitions from the infrastructures necessary for the event. Furthermore, the number of disciplines present varies from one edition to another. And data collection is regularly incomplete: public authorities are not spontaneously inclined towards transparency. Because, invariably, exceeding the initial budget penalizes the economic results.

The “law of surpassing”

The Danish academic Bent Flyvbjerg, specialist in the economics of mega-projects and their decision-making mechanisms, led a study at the University of Oxford which is a reference on the cost of the Games from 1960 to 2016. For consistency and for To compare the different editions, only the costs linked to the organization of the competitions were retained, and not the “investments”, although this share is generally much higher. The authors of the study in fact consider, conservatively, that the infrastructures (roads, housing, etc.) built for the JOPs will be able to be used afterwards, or that the event has accelerated the construction of those which were deemed necessary.

Result, in any case, all editions show an overrun of the initial budget, and by a large margin: on average, by 142% for the Winter Games and 213% for the Summer Games. The gold medal goes to Montreal (1976), with an additional cost of 720%, silver to Rio (2016) with 352% and bronze to Lake Placid (1980) with 324%. Sochi (2014) is hot on their heels, with 289% overrun, an explosion all the more impressive as these Winter Games are considered the most expensive in the history of the Olympics, with a total bill (investments included) more than 50 billion dollars: almost all the infrastructure was built for the occasion.

The final Beijing slate (2008) is just as cosmic: nearly 45 billion dollars (1). But only 2% additional cost, for the “organization of competitions” part alone, compared to the initial budget of 6.8 billion euros: what degree of confidence can we place in Chinese data?, asks Flyvbjerg.

This apparent anomaly does not, however, invalidate the phenomenon of “victor’s curse”, as Wladimir Andreff, sports economist, describes it: consequence of an “auction” style designation process, the city which wins the organization of the event is the one which will have, and on purpose, the most largely underestimated its real cost. And the final broth stands out for its scale in the category of megaprojects. Public works, transport, energy, dams, IT: additional costs vary between 20% and 107%. Bent Flyvbjerg goes so far as to theorize, for the Olympic and Paralympic Games, a “law of overtaking” which can also be called “blank check syndrome”.

First of all, such prestige is attached to the organization of the JOP that it is seen as unthinkable, for a host country, to throw in the towel after winning the nomination. Only Denver is an exception with its abandonment in 1972. To deal with the inevitable financial slippage, there is only one solution: take out the checkbook. Then, the Games being irremovable (2), there is no possibility of extending the construction calendar to reduce the cost. So, as the opening date approaches, the financial tap opens wide in order to be ready on time.

Then, as a rule of the IOC, the organizing country undertakes to cover budget overruns. Which the IOC has little interest in limiting: while it only finances a fraction of the costs linked to the events alone, it receives in return part of the revenue (tickets, sponsorship, etc.), which the gigantism of the Games amplifies mechanically.

Another particularity: there is practically no margin for cutting corners on the quality of the equipment, set by very strict standards. The duration of cost planning, which can exceed a decade, also exposes countries to economic downturns. Brazil paid dearly in 2016, in the midst of economic collapse, while the situation was much better seventeen years earlier, when the Olympic Games were awarded to Rio. Finally, the authors of the Oxford study cite the impact of “the eternal beginner”: de facto, the organizing committees lack experience. The last Paris Games were a hundred years ago.

Hypothetical general interest and social utility

And for a realistic final slate, we should wait at least two decades after the end of these major events. For Qatar, what will be the ultimate use of the eight very large stadiums built or renovated for the 2022 Football World Cup, for a territory of barely 2.8 million inhabitants? The total bill, all infrastructures included, would exceed 200 billion dollars: an absolute record for this competition, and a monumental mortgage on the general interest and the social utility of these investments, without even talking about their economic profitability.

They are mocked as “white elephants”, these oversized pieces of equipment left abandoned or requiring an enormous maintenance budget, which have become emblems of the catastrophic legacy of several Olympics. London 2012 and Sochi 2014 managed to avoid them, despite significant cost overruns (76% and 289% respectively, according to the Oxford study). But the social and ecological costs do not appear in the balance sheets.

The successful renovation of East London has driven out the working classes, and Rosa Khuthor, the Russian ski resort inherited from the Sochi Games, is only profitable because of high-end attendance, which does not reimburse the damage. environmental damage caused by the construction of infrastructure. The Athens JOPs (2004), on the other hand, are notorious for their “white elephants” and an additional cost (49%) which weighed down Greece’s public accounts, to the point of having strongly contributed to the enormous financial crisis which bled the country from 2008.

Due to these exploding budgets and the responsibility for states to absorb surpluses (with taxpayer money, ultimately), applications for the organization of major sporting events have become rarer over the past ten years, especially as public opinion is getting more and more involved. Citizen opposition motivated the abandonment of Hamburg or Rome for the 2024 Olympic Games, awarded by the IOC to Paris but also simultaneously to Los Angeles for 2028, due to lack of competition.

The French capital’s candidacy took advantage of the fact that 95% of the infrastructure was “existing or temporary” , and its promoters have trotted out the hackneyed oath of “cost control”. But, unsurprisingly, the Parisian budget increased from 6.3 to 8.8 billion euros, and several analyzes judge that it will be difficult to stay below 10 billion euros. Last July, a report from the Court of Auditors analyzed the causes of the slippage: for two thirds, they result from an underestimate “obvious” costs, “misrecognition”the complex specifications of the IOC and the difficulty of negotiating adjustments, “if only at the margin”. In short, the expected verification of the “law of excess”.