Costs & Funding.
How expensive are the Olympic and Paralympic Games?
In this context, an important distinction needs to be made: What costs are incurred for the actual staging of the Olympic and Paralympic Games, and what investments are made for long-term infrastructure development?
If we look at the staging of the Games alone, the costs for the Olympic Games currently amount to three to six billion Euros, while the Winter Games cost about half that amount. That is a lot of money, admittedly, but the expenditure is largely refinanced by the IOC itself (about two billion Euros in subsidies for the Olympic Games and about one billion Euros for Winter Games) and the Games’ revenues (for example, from domestic sponsors and ticket sales). Public funds are only used to pay for costs associated with safety and security as well as medical care.
If we also consider all the investments in (sports) infrastructure that are made in the context of the Olympic and Paralympic Games, the costs increase depending on the scope of the measures. That is one of the reasons why we have decided to forego the construction of costly new buildings in our renewed attempt to host the Olympic and Paralympic Games, which caused costs to skyrocket at many past Games.
The money saved will be invested in the modernisation of stadiums and gymnasiums, which is necessary at any rate, the expansion of roads and railways, the creation of housing, and the expansion of fiber optics: The return on investment will be long-term and will generate sustainable benefits for the entire country.
Are the Olympics becoming more and more expensive?
In the past, the costs of the Olympic and Paralympic Games steadily increased. There are various reasons for that, in addition to the general price increase that affects all large-scale projects, some of which have a lead time of more than 10 years: New, large, and elaborate sports facilities were often built in host cities. In addition, starting in the 1980s, the number of participating athletes and events grew steadily, which also led to rising costs.
In order to counteract those trends in the long term and to once again make the Games more cost-effective, numerous reforms have been implemented by the IOC since 2014. They are known as the Olympic Agenda 2020, the New Norm, and the Olympic Agenda 2020+5. Among other things, it limits the number of athletes and events and stipulates that the Olympic Games must make greater use of existing sports facilities. Certain sports facilities, such as canoe slalom facilities or bobsled and luge tracks, may no longer be built specifically for the Games unless there is a demonstrable and permanent need for them, according to IOC specifications. Such measures have led to a significant reduction in the costs of the upcoming Games and a noticeable increase in the use of existing sports facilities.
How expensive will the Games in Germany be?
Needless to say, we can’t put a concrete and reliable price tag on YOUR GAMES until we know whether we’ll be bidding for a Summer or a Winter edition. The selection of host cities and the final concept also play a key role in the cost calculation. However, we will be able to present a detailed cost forecast with our final concept in mid-2024.
What we can already say is: Due to the fact that we will be bidding in accordance with the guidelines stipulated by Olympic Agenda 2020, the New Norm, and the Olympic Agenda 2020+5 for the first time and will not construct costly new buildings, the total costs will likely be significantly lower than they were in the past. That is because construction projects accounted for a large part of the (calculated) costs in the past – even in German bids.
Relying on existing sports infrastructure, however, is both economically and environmentally sensible because, for example, no new areas need to be paved over. It also reduces the risk of unplanned cost increases.
Who pays for all that?
In this context, an important distinction needs to be made: What costs are incurred for the actual staging of the Olympic and Paralympic Games? What additional investments are made for sustainable infrastructure development?
If we look at the staging of the Games alone, the costs for the Olympic Games currently amount to three to six billion Euros, while the Winter Games cost about half that amount. . That is a lot of money, admittedly, but the expenditure is largely refinanced by the IOC itself (about two billion in summer subsidies and about one billion in winter) and the Games’ revenues (for example, from national sponsors and ticket sales). Public funds are only used to pay for costs associated with safety and security as well as medical care.
If we also consider all the investments in (sports) infrastructure that are made in the context of the Olympic and Paralympic Games, the estimated costs can increase depending on the availability and suitability of sports facilities in the respective host country. . In Germany, there is a great concentration and variety of existing venues. That is one of the reasons why we have decided to forego the construction of costly new buildings in our renewed attempt to host the Olympic and Paralympic Games, which caused costs to skyrocket at many past Games.
The money saved as a result will be invested in the modernization of stadiums or gymnasiums, which will be necessary at any rate, the expansion of roads and railways, the creation of housing, and the expansion of fiber optics: The return on investment will be long-term and will generate sustainable benefits for the entire population.
Do host cities have to provide financial guarantees?
The contracts that hosts had to sign with the IOC in the past was reason for a lot of criticism. Host countries had to guarantee that they would be liable for any losses up to an unlimited amount. . In the meantime, the IOC has dispensed with demands for unlimited financial guarantees. Of course, it is in the IOC’s interest that the rights of its partners are protected, but this is also the case with other major sporting events.
Economic Added Value.
Will the local economy benefit from the Games?
Many sectors of the economy benefit from the Olympic and Paralympic Games. For the 2024 Games in Paris, the University of Limoges expects an economic impact of 10.7 billion Euros More than 250,000 jobs are expected to be created in the region surrounding the French capital as a result of the Games. The 2022 European Championships in Munich also had a positive impact on the local economy, generating 122 million Euros in local value added.
Modern Olympic and Paralympic Games are more than just sporting events: That’s why we rely on the involvement and support of the regional art, culture, hotel, and gastronomy sectors from the very beginning Our decentralised concept, which centres around multiple host cities, ensures that the whole of Germany benefits from the Games. In addition, a host town concept like the one implemented for the 2023 Special Olympics may lead to all of Germany playing a part in the Olympic and Paralympic Games.
Will the Olympics generate more tourism?
The Olympic and Paralympic Games bring the entire world together and provide a unique opportunity for us to present ourselves to the world as excellent hosts. Not only can this lead to more national and international tourism during the Games, but beyond the Games as well. For example, the number of overnight stays in Barcelona more than quadrupled in the 10 years following the 1992 Games.
The UEFA European Football Championship is another prime example: The total annual advertising revenue generated by the European Championship for the city of Munich amounted to roughly 431 million Euros. A multi-venue concept enables several cities to benefit from the “Olympic effect”.
Similarly, surveys show that the 2006 World Cup generated between 500 million and one billion Euros in additional revenue from foreign fans, and nearly 50,000 jobs (mainly in the gastronomy, retail, and service sectors) were created.
Infrastructure & Digitalisation.
What will be built in preparation for the Games?
Germany’s sports infrastructure is excellent and can provide nearly all of the sports facilities needed for the Olympic and Paralympic Games. In fact, Germany has two Olympic stadiums that are currently in operation.
Germany is only lacking a swimming pool with the capacity required to host Olympic swimming competitions. However, that can be built in a relatively inexpensive way and on a temporary basis for example, inside a soccer stadium, which would simultaneously increase spectator capacity.
What will happen to the Olympic Village after the Games?
If an Olympic Village is to be built for the Olympic and Paralympic Games in Germany (perhaps alternatives can be found), the project must be carried out with a view to the future. In this respect, the 1972 Munich Games are an ideal model. What began as an urban planning experiment in the 1970s has stood the test of time. The former Olympic men’s village of the 1972 Games was transformed into a residential area after the Games. . The apartments and bungalows in the women’s village have since been rented to students. Approximately 6,000 people live there. The same level of sustainability should also be put into practice if the Games are held here once again: For example, the Olympic Village could provide housing for up to 10,000 people following the Games.
Since a German bid might involve several cities, there is a chance that up to three Olympic Villages (one for each host city) could be built. They would be significantly smaller, but they would subsequently provide affordable housing in the respective cities. At a time when affordable housing is in short supply, especially in big cities, such an investment would certainly be sensible and