In January 2014, Brazilian authorities announced that 5.6 billion reais ($2.3 billion) will be spent on infrastructure for the 2016 Rio de Janeiro Olympic Games, and those costs will rise as more projects are added. These initial estimates pale in comparison to the Sochi Winter Games currently underway, which are estimated to cost $52 billion and be the most expensive Olympics in history.
It’s fair to say that the cost of the Rio de Janeiro Games will have ballooned significantly by the time 2016 rolls around. The average cost overrun of the Olympic Games is 179 percent, according to Oxford’s Said Business School, and every single Olympic games since 1960 has failed to meet the cost target.
So, are the Olympics worth the investment? It depends who you ask, and what factors you consider.
The 1992 Summer Olympics in Barcelona had definite benefits. Despite its US$11.4 billion price tag (in 2009 dollars), a significant proportion of this money went into upgrading infrastructure, an initiative that would benefit the city in years to come. Unemployment fell by 60,000 during the Olympic year, and visitors to the city doubled over the following decade. Between 1990 and 2001, Barcelona moved up from 11th to 6th in the EU city economic rankings.
At the other end of the spectrum is the sheer waste associated with some Olympics. The 2008 Beijing Olympics, for example, displaced more than 600,000 residents to make way for new Olympic venues. And while the legacy includes new subway lines, a state-of-the-art stadium, and a swimming and diving center, so far, only one event has been held in the 91,000-seat stadium — a massive opera production — and there is some talk that it could eventually be converted into a shopping center.
Similarly, in Athens, a staggering 21 out of 22 Olympic venues used in 2004 now lie abandoned, covered in graffiti, rubbish and weeds.
With all the recent Olympic hype, is the cost of hosting the Olympic Games justified? Decide for yourself if you think its worth it.