BLOG: What is the Cost of the Olympics?

The London 2012 Olympics are underway, and for the next two weeks the world will be united watching their favorite athletes compete in their favorite sports. From my cozy living room, situated in the heart of Eagan, it’s easy to focus entirely on the performance aspect of the games, but in reality these games have been the result of YEARS of hard work preparing the city of London. While it seems reasonable to assume that Great Britain will be raking in the cash after these two weeks, the cost of holding such an event is staggering! Here at the Chamber, we have been having so much fun keeping up with our favorite superstars so we thought we would keep you informed on how the games affect both the athletes and the city, financially.

We watch our favorite Olympians dive, sprint, and tumble their ways to gold medals, but how much do these athletes make behind the scenes? Some of the highest paid Olympic Athletes are making up to eight figures a year, while some will go back to their part-time jobs when they return to their home countries.  While each athlete does not get paid for simply competing in the games, the U.S. Olympic committee awards $25,000 for gold, $15,000 for silver, and $10,000 for bronze medal earners. While these prizes can add up, the majority of money made comes from different corporate sponsorships. Rodger Federer comes in on top as the highest paid Olympic athlete. Last year alone, the tennis star made over $54 million. This is partly due to his hefty prize winnings, but he also has some of the most endorsements of any athlete. He is sponsored by Nike, Rolex, and Mercedes-Benz, just to name a few. LeBron James takes second place earning $53 million, and Kobe Bryant takes third making a little over $52 million.

While the city of London is no stranger to huge numbers of tourists, or hosting large events, the amount of money spent on preparing the city for these two weeks is astounding. Great Britain has spent right around $14 billion on the games. Whether it was developing the Olympic park, cleaning up the city, improving infrastructure, security, or insuring the different venues will be put to good use after the closing ceremony, everything has an expense. The London Olympics seem terribly costly, but these games are significantly less expensive than the Beijing games, which totaled around $70 billion (according to businessweek.com). They were able to save a little money by using existing venues for many events, and having smaller scaled opening and closing ceremonies. They spent a whopping one Euro on their opening performer, Paul McCartney, and have not yet disclosed the closing ceremony performer, but
they will most likely be receiving a similar pay.

It seems reasonable to assume that while the city paid a high price to put on the games, they would make up most of those expenses in tourist spending, but that is not quite the case. London is known for its beautiful museums, and amazing theater, both of these venues have reported up to 30 percent decreases in sales compared to this time last year according to London Sky News. Cab drivers are also noticing extreme decreases in sales due to road closures. Experts are saying this could be due to Londoners leaving town during the games to avoid the influx of tourists, which is damaging to local businesses. It is still early on in the
games, and the economic input still has time to turn around. Only time will
tell, and we will make sure to keep you posted! :)

Thanks so much for reading, and we hope you enjoy the rest of the games!

—Megan, DCR Intern.