one of the most expensive summer games ever. In 2018, it was

estimated that the total cost was over $20 billion, far beyond

the Rio organizing committee's initial estimate of $2.8

billion. Rio had big stadiums, impressive athletic villages and

top of the line training facilities, all of which

significantly impacted the game's bottom line. But that big

spending didn't just end with the cost of just hosting the

games. The city of Rio had to pay for a new subway lines or

renovated shipping port, a doping testing lab and

environmental cleanup costs in the Guanabara Bay. But just

seven months after the games, the once grand Olympic venues

look like this. These crumbling facilities left vacant are the

byproduct of a city struggling with debt and colossal

maintenance costs, often billions of dollars in overrun

costs. Most of the facilities built for the Rio Games were not

supposed to last longer than the lifecycle of the games itself.

But the change in local government left the venues in

limbo, when to be used or dismantled.

Now the question of the venues and especially those that are

that are still up there in the park. We're not supposed to be

there. We're supposed to be dismantled

cities going over budget when hosting the Olympics isn't

unique to just Rio. According to the Council of Foreign Relations

since 1960. Every Olympics all significant overrun costs, all

except one, the Summer and Winter Games have struggled to

stay within their estimated costs of hosting the Olympics.

Winter Games have done a better job of managing that. However,

the Sochi games was an outlier. And economists argue hosting the

games does very little for the betterment of a city.

If you're looking at this as an investment, you don't want to

make an investment something where you have a one chance at a

10 to have the outcome that you're looking for. That's not a

good investment. That level of risk is ridiculous to undertake.

Well, other experts believe that the games are vital for the

city's infrastructure for its future,

better roads, maybe it's Metro having a development of the

metro or it could be the Hoss having housing that's put in

place.

As overhead costs become a growing concern. several cities

withdrew their 2022 Winter Olympic bids. So how did the

Olympics grow from its humble beginnings into a massive and

expensive international event? And how can the Olympics prevent

even more potential host cities from withdrawing their bids? In

1896, the Olympic Games became a truly international competition

as a modernized becoming what it looks like today, a bi annual

event with Summer and Winter Games. in its infancy, the gains

were relatively small, how cities would use public funds

for the games with ticket sales generating revenue to offset

costs.

Very first Olympic Games were in 1896. No women were able to

compete in those games and certainly over time now as we

look at his recent 2018 on the games look a lot different feel

a lot different.

This is Dr. Nicole Forrester. She's a former Olympic athlete

in track and field who competed in the 2008 Beijing games.

The Olympics is like the the pinnacle or the Everest of that

sporting experience, both for the athlete and also for the

viewers at home.

The Olympic Games didn't see a rise in popularity until the

evolution of telecommunications. The 1936 Berlin Summer Games

were famously the first to be live broadcasted. At the time,

only about 50,000 viewers were able to watch from a nearby

Stadium by 1948. The radius grew even wider for the London Summer

Games. 500,000 people watch live up to 125 miles away in the

1960s. With the Rome games, they were the first genuinely

international broadcast, reaching millions worldwide. By

1968. About 17% of the world's population had access to the

game's cost balloon. As viewership grew over the years,

more prestigious white whales were being built to showcase a

country's national pride, draw and tourism, create jobs and

bolster local businesses. Since the 1960 games in Rome, both

Summer and Winter Games saw over one cost on their estimates,

things began to get dire in 1976 with the Montreal games. Andrew

Zimbalist is an author and economics professor at Smith

College in North Hampton. One of the things he specializes in is

the economics of the Olympic Games.

Famously, the mayor of Montreal declared that the Olympics This

is before the games started, but he declared the Olympics can no

more have a cost overrun than a man can have a baby. Well, it

turned out that the Montreal Olympics had a cost overrun that

was almost tenfold over the initial price.

The Canadian government shelled out $1.5 billion in overhead

costs in the Montreal games well over their estimated cost of

$120 million. The Canadian government finally paid off that

debt in 2006.

At that time in Canada, we were under a cultural war of sorts.

The other issue that happened is the price of steel had

skyrocketed. And then the year before the games are hosted, you

had workers walk off on a strike, which then cause more of

a delay, and then again added to the cost itself of posting these

games.

By 1984, no country wanted to host the games, only the United

States kept their hats in the ring for the 84 games in Los

Angeles, it became the first and only Summer Olympic Games to

have an operating surplus of $215 million. The reason as the

only bidder, Los Angeles had the leverage to negotiate its

contract with the IOC. And the infrastructure was already

there,

together with with the fact that Los Angeles, the second largest

city in the United States, arguably the entertainment

capital of the United States, meant that they didn't have to

do hardly any building, basically, everything was in

place, little building had to do but not very much.

There was such a surge in revenue that was derived through

the media coverage itself that actually went straight to the to

the Los Angeles games. And so like the IOC realized, okay,

now, we should, we should make sure that we make sure that we

get that big cut of the media revenue that's generated.

The IOC saw the ELA games as an opportunity to restructure their

television revenue distribution. Before the IOC auction its TV

rights to the games local hosts, were able to keep about 90% of

the revenues generated. In the 1980 Moscow games, the IOC only

took about 10% of the revenue. But all that changed in 1984

when the IOC took 33% of the LA games TV revenue. Over the years

broadcast revenue for the IOC increased the 9084 Summer and

Winter Games generated $287 million and $103 million,

respectively. Fast forward to 2016 and 2018, Rio generated

$2.9 billion, and Pyongyang generated $1.4 billion. But it

wasn't just the TV revenues that skyrocketed. So did the

percentage of the IOC takes broadcast rights revenues for

2016 games in 2018. Games were 73%. over its lifetime, the

Olympics has grown as more and more nations participate and

more sports are added creating the massive competition we see

today

we're seeing there's more sports that have been added to the

program plan. So we look at the Games in 1896. And how many

sports were there and versus what it's gonna look like for

Tokyo it is night and day difference in vastly larger for

for these games.

As the games become more expensive, the price tag of

hosting the games becomes more of a burden. Before host city

begins constructing elaborate venues, putting in a bid to host

the games itself can cost 10s of millions of dollars.

All these cities would come together and would bid and then

it would be narrowed down to say like five other cities and then

you've got people within the IOC visiting during these site

visits, help decide like what where we're going to go and then

it narrows down to like two cities and then so on. This used

to be a very costly process to do. With no Garrett with a very

small guarantee that that city would be successful through the

bidding process.

Just take the Tokyo bid to host the 2016 Summer Games $150

million was spent by the Japanese Olympic Committee for

expensive consulting firms city planning, event organizing

architecture firms and much more. Eventually, that bid went

to Rio. However, Tokyo did have a successful bid for the 2020

games, but spent an additional $75 million for an update and

valuation and planning. winning an Olympic bid comes with a

steep price tag,

largest single facility it has to get built. This is the

Olympic Village. This is for the Summer Games. This is a village

that has to accommodate 11,000 athletes and about 5000

additional coaches and trainers. In addition to having the

lodging. You need to have athletic training facilities,

you need to have tracks you need to have weight rooms you need to

have other facilities. You need to have restaurants, you need to

have entertainment facilities for the athletes, you need to

have clinics, medical clinics. So you're actually building a

village. You know, this is a full full service village.

So what else needs to get built?

Then you have the Olympic Stadium infrastructure road

infrastructure telecommunications,

infrastructure, also potentially billions of dollars their

security costs these days easily run one and a half to $2

billion.

While both the summer and winter games are expensive to host. The

Summer Games are typically more costly and expensive. There are

more athletes More competitions and events that require more

specialized facilities. Winner games usually stay within their

cost estimate threshold with minimum overrun costs. However,

the Sochi games was an outlier and peaked an estimated $40

billion in 2014. And it's over on costs coming in at a total of

$51 billion

since 1980. The average cost overruns for hosting the games

is 252%.

For the Rio Games, it was estimated in 2017. That $13.1

billion went into hosting the Olympics, well over its initial

$2.8 billion budget. economist, however, put the actual numbers

somewhere north of $20 billion in 2018. An estimated $2.06

billion actually went towards sports related venues, while an

estimated $8.2 billion went towards legacy builds, or builds

intended to live well beyond the Olympics three week lifecycle,

legacy builds went towards things like an updated

infrastructure highways a renovated port, and cleaning the

polluted Guanabara Bay. Of that $8.2 billion. A delay riddled

subway line cost an estimated $2.98 billion and the renovation

of Porto malamala was an estimated $4.2 billion to meet

the iocs requirement of 40,000 rooms for accommodations, where

you had to lay out the construction of an additional 15

to 18,000 rooms, intended to be used after the games as luxury

apartments. nearly five years after the games, most of those

long term use buildings sit vacant. They're also expensive

to maintain about $14 million a year it goes into maintenance

costs for real venues. Real screams Moroccan a stadium built

in 1950, which held the opening ceremonies of the 2016 Summer

Games had its power cut off in 2017. After falling behind on

payments during a tendancy dispute from the games. After

two months of no power and left vacant, the stadium reopened for

football matches and concerts

in all cases. And in all cities, not just Rio reason why the

venues didn't exist before the games. This because it didn't

make sense to build them economically. Nobody wanted

to build them. The IOC has an active changes for cities who

wouldn't have much of a use case for certain sports venues. In

the future.

One of the simple change is you don't need to build venues

anymore. Either they needed by the community in the long term,

you don't build. And if you don't build you have different

choices, you can have temporary structures which work extremely,

extremely well in the majority of sports right now. Or go

abroad.

Real isn't alone with its overspending. Government spend

billions of dollars on these extensive upscale facilities,

hoping for job growth or revitalizing infrastructure to

become a new tourist hub. However, this big spending on

legacy builds and infrastructure for the future is outside the

scope of requirements from the IOC to host the games.

where there have been problems in the past is some of the

venues that were designed to be especially for for the after

games, and too expensive. And let's be clear, this is

absolutely not something we are demanding what we are doing now,

to make sure that that we don't have these problems they will