OLYMPICS AND ECONOMICS

Muhammad Hamizan bin Zaini 2008253478

Olympics : A History

Olympic games is a major international event which features summer and winter sports.

The ancient Olympic games were held in Olympia, Greece, from the 8th century B.C to the 4th century A.D

The evolution of the Olympic games had resulted in several changes to the Olympic Games. Some includes the creation of Winter Games, Paralympic Games, and Youth Olympic Games.

Introduction

The Olympic Games is an event of such magnitude that it can potentially have a

significant economic impact on the host city.

Preparations are made commence up to a decade beforehand and may entail considerable investment expenditures that can have longer term economic significance.

Are the Olympics Worth It?

Yes, because economically its mixed bags.

Companies and governments look at these games now more from a promotional element than economic

The long term legacy aspects which define these aspects, in particular, affect the citizens of a host city for years go come. 

Promoting the feel good vibe of the city and hoping to get some public works projects done

Economic Stages in the Olympics

Pre-Games Phase Post-Games Phase

Key Economics Benefits and Costs of the Games

Benefits Costs

Pre-Games Phase •Tourism•Construction activities

•Investment expenditure•Preparatory operational cost

Games Phase •Revenues from games (TV rights)•Stadium and infrastructure

•Operational expenditure•Lost benefits from displaced projects

Post-Game Phase •Human capital•Urban regeneration

•Maintenance of stadium

Identifying the economic impacts of the Olympic Games

Pre- Games Impact

Impacts start to occur soon after the city has decided to bid for the Games, up to a decade prior to the actual event, but become more significant after the Games is awarded.

Investments and other preparatory activities related to the Games.

Tourism could also start to pick up in advance in some cases due to the higher

profile of the host city.

Games Impact

The impact of the Games and the associated events immediately surrounding them.

Post-Games Impact

The longer-term impact, often referred to as the

“Olympic legacy”.

Can last for at least a decade after the Games.

Demand Side Benefits of the Olympic Games

Tourism is the only activity whose impact can be seen in all 3 stages

Olympic games provide unique events that attracts visitors from all over the world

The latter effect can sustain increment in tourism flows for several years after the event

Direct Cost of the Games

Operating costs of hosting the Games itself

Construction of necessary Olympics infrastructure

Rent could also be affected indirectly if housing projects are displaced by other building projects

Supply side Benefits

Increase productivity. Example: Improving transport facilities.

Creation of enhancement of sports facilities.

Provide working opportunities for residents.

Make city a more attractive place to live.

Financing the Olympic Games Olympics were financed almost entirely with the city’s own

public funds.

A considerable amount spent on improving infrastructure and sports facilities in a relatively small area of the city.

Public financing was first introduced when Los Angeles hosted the ‘84 Olympics.

Increasing attention was focused on the wider economic impacts of the Games.

Benefits stretching beyond the financial viability of the event itself.

Factors Affecting Total Medal Awarded

■ Population

■ Average income levels (measured by GDP per capita at PPP exchange rates)

■ Whether the country was previously part of the former Soviet bloc (including Cuba in this case)

■ Whether the country is the host nation

■ Medal shares in the previous Olympic Games.

How Olympics will help London’s Economy

London 2012 Olympic Games will cost between $9 to $24 billion dollars with $9.3 billion being covered by the Olympics’ public sector funding – which covers the cost of aspects such as building venues, security and policing.

The Games are drawing people to London from all over the world, from spectators to athletes and coaches, family members to worldly dignitaries.

Supporting the local businesses and their employees that in return helps the economy.

People pay to come and watch events as well as purchase merchandise and food at the venues

Creates this whole atmosphere of pride and happiness for the host country.

 Gives a platform for inspiration and pride.

Marketing strategies in funding the Olympics

McDonalds inside the Olympic stadium.

Advertisements in investing funds to the Olympics

Olympics Logo

London 2012

Conclusion

The Olympic Games have significantly boost major economical aspects such as building more infrastructure projects which could benefit the host country in generating profits out of the events.

Furthermore, it also provide more job opportunities for the citizens. This subsequently will provide a better return on investment due to the presence of the Games

Thus, the Olympic Games could be considered profitable if it is planned and structured strategically to the economic condition of a certain country. All aspects must be analyzed thoroughly to minimize any types of loss due to the Games held.