The Modi government has implemented numerous commendable policies aimed at promoting yoga, fitness, health, and sports, which have garnered widespread appreciation. While these efforts to elevate India’s global standing are indeed praiseworthy, I do not share the government’s enthusiasm for bidding to host the Olympic Games in 2036.
Historically, hosting the Olympics was a source of immense national pride and an opportunity to present one’s country to the world. Many countries would eagerly compete to secure the bid. However, the global landscape has shifted, and the economics of hosting the Olympics have become increasingly financially unviable and unsustainable. There are several reasons prompting a need for India to reconsider its aspirations.
The business of hosting Olympics
At its core, hosting the Olympics should ideally be about balancing revenue with costs. However, revenue generated often falls short, while costs tend to skyrocket as countries typically overspend—often by a substantial margin. The result is that most host nations end up with massive debts, ultimately borne by taxpayers.
In 2016, economists Robert A Baade and Victor A Matheson analysed the costs and revenues associated with hosting the Olympics in their paper “Going for the Gold: The Economics of the Olympics”. They categorised costs into three main areas: sports infrastructure for competition venues, general infrastructure such as transportation and housing, and operational expenses, including administration, security, and ceremonies.
On the revenue side, hosts look to tourism, spending during the games, and the long-term benefits of an “Olympic legacy”, like improved city infrastructure, increased trade, foreign investment, and continued tourism. Then there are the intangible benefits, such as the “feel-good effect” and national pride.
However, the reality is often less rosy. The International Olympic Committee (IOC) requires a host city to have a minimum of 40,000 hotel rooms for spectators and an Olympic Village capable of housing 15,000 athletes and officials. The evaluation committee also checks transportation, infrastructure, and connectivity. Many host countries build these massive facilities solely for the Games and struggle to recover these costs.
The hosting experience
Between 1896 and 1998, over 90 per cent of Olympic hosts were from developed countries in Western Europe, the United States, Canada, Australia, and Japan. Only recently have developing countries started bidding to host.
In recent history, 1984 Los Angeles stands out as the only truly profitable host, largely because the city already had substantial sports facilities in place and negotiated exceptionally favourable terms with the IOC. For example, Los Angeles had nearly 75 per cent of the broadcast revenue, with the IOC taking only 25 per cent. Today, that ratio has almost reversed, with the IOC claiming the lion’s share. Even under favourable terms, large-scale events have generally failed to be profitable. For instance, the 2012 London Olympics cost $14.6 billion, with $4.4 billion coming from taxpayers. Revenue from ticket sales and foreign investment often falls short of expectations, and the anticipated economic multiplier effects from increased spending on hotels, transportation, and restaurants rarely materialise.
Additionally, the Olympics have historically been targets for terrorism, with incidents like the Munich massacre in 1972 and the Atlanta bombing in 1996 casting long shadows over the Games. We wish such attacks were never repeated, but they have driven security costs to unprecedented levels.
Most economists agree that hosting the 2004 Olympics marked the beginning of Greece’s financial crisis, with many suggesting that the event bankrupted the country. Rio de Janeiro’s 2016 Olympics were also a financial disaster. It took Montreal 30 years to pay off the debt from the 1976 Games. The Salt Lake City Winter Olympics in 2002 created only 10 per cent of the 70,000 jobs projected, with most of those going to people who were already employed.
Sports economist Andrew Zimbalist, in his book Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup, succinctly sums it up: “Hosting the Olympics usually profits the wealthy but adds a burden on the middle and lower income brackets.”
India’s Commonwealth Games scars
India has its own cautionary tale with the Commonwealth Games (CWG). The corruption scandals from the 2010 CWG are still under litigation. The Comptroller and Auditor General of India found that the actual costs were 16 times higher than initial estimates. Promises of a multiplier effect on tourism and increased sports events never materialised, and the financial losses were ultimately borne by the public.
When the losses became apparent, then Chief Minister Sheila Dikshit made a public appeal for funds, saying, “We need money for the Commonwealth Games. I am sure people will extend their cooperation to the government.” Cooperation was a euphemism for a tax raid on the public, raising prices of essential goods, including diesel, tea, coffee, oil, ghee, kitchen utensils, and CNG fuel. The BJP, then in opposition, had criticised the move, calling it a “loot in the name of CWG”.
Building a sports culture in India
Even if we assume that India could host the Olympics without corruption, the experience of other host countries suggests that it would likely be a loss-making venture.
Moreover, hosting the Olympics is not a priority for our nation, given the stark reality that we manage to win just a handful of medals. Moreover, with a precarious geopolitical situation unfolding in our region, our focus should be on strengthening internal security and addressing our deteriorating urban infrastructure.
Instead of chasing the costly and risky ambition of hosting the Olympics, where most hosts have failed, India should concentrate on building smaller sports facilities across the country to nurture a strong sports culture at the grassroots level.
Let’s set a realistic goal of winning at least 20 Olympic medals and make our nation proud before we consider hosting the Games. It is wiser to choose realism and pragmatism rather than the vanity of hosting an international event where we aren’t winning anything substantial yet.
Anu Lall is the founder of YogaSmith and author of four books. She is a lawyer and has worked in the pharmaceutical and technology industry in Asia, the US, and Europe. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.
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