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The Olympics, a global sports event, is not only a stage for athletes to show themselves, but also a feast of economy and business. But have you ever thought about what kind of economic accounts are hidden behind it? What kind of business opportunities are there?

1. Olympic Revenue

According to estimates by Asterès, a French economic research and consulting agency, the total cost of the Paris Olympics is expected to reach 11.8 billion euros, far exceeding the initial budget of 6.8 billion euros proposed by the Paris Olympic Committee. The high costs mainly come from infrastructure construction, venue construction and event organization costs. Although the Olympic Committee strives to control costs, it is inevitable to encounter various unforeseen challenges and expenses in actual operations. At the same time, the Olympics significantly promote the development of the aviation, hotel and catering industries. According to a study by the Center for Sports Law and Economics of the University of Limoges in France, it is expected that 2.3 million to 3.1 million tourists will come to Paris, which will bring a net economic benefit of 6.7 billion to 11.1 billion euros to the Paris region, and will also have an economic impact of about 8.9 billion euros in the medium and long term. However, high prices and staff shortages are also a challenge. It is still unclear whether the Paris Olympics will really bring the expected economic returns in the end, so let us wait and see.

The revenue of the Olympics mainly comes from several key areas, including the sale of television broadcasting rights, sponsorship agreements, etc. In the last Olympic cycle, the total revenue of the International Olympic Committee (IOC) reached 7.6 billion US dollars, of which television broadcasting rights accounted for 61% and sponsorship income contributed 30%. As for expenditure, the Olympic Organizing Committee needs to bear a number of expenses including venue construction, security, transportation facilities, etc. After deducting these costs, the remaining funds may be used for infrastructure improvements and sports development in the host city.

2. Bidding for the Olympic Games: A gamble or an opportunity?

Hosting the Olympic Games is a high-risk investment that requires the organizers to conduct meticulous cost control and resource management during the preparation process. In the early days, the funds for organizing the Olympic Games were mostly provided by the government, which led to huge financial pressure on the host country. The 1984 Los Angeles Olympic Games introduced commercial mechanisms such as industry sponsorship and broadcasting rights bidding for the first time and successfully achieved profitability. Other successful Olympic Games such as Seoul in 1988, Barcelona in 1992 and Beijing in 2008 were not only economically successful, but also promoted urban development. However, successful and profitable Olympic Games are still a minority. As the scale of hosting continues to expand, the cost of the Olympic Games has risen.

The 2014 Sochi Winter Olympics had the largest cost overrun in Olympic history, with an overrun rate of 289%. During the 2004 Athens Olympics, terrorist incidents occurred frequently in neighboring countries, forcing Athens to significantly increase investment in security and other aspects. In addition, many competition venues were not fully utilized after the games, which ultimately led to a loss of more than $8 billion.

The Tokyo Olympics, which was postponed for one year, secured a record $3.3 billion in local sponsorship fees, but the recurrence of the epidemic caused the Tokyo Olympics in Japan to ultimately lose nearly $10 billion.

Hosting an Olympic Games faces many challenges. Its far-reaching significance goes beyond sports competition. It is also a bridge for shaping the national image, promoting social progress, and promoting cultural heritage. We look forward to the Paris Olympics and hope that it will become a brilliant stage to showcase the charm of France and the Olympic spirit.