Sochi Olympics: Dreams of gold, but spends in the black.

As the 2014 Sochi Olympic games approach next month, I am just as excited as the next person to watch the world’s top athletes compete for the ultimate gold medal. I mean who can resist the Curling events, right? But when you spend close to 50 billion dollars in building an Olympics compound when do say enough is enough? Well Russia, who originally set their Winter Olympic budget to 12 billion dollars, which was already the most ever spent by a country has overspent, topping out at about 50 billion dollars spent, and that is money that they will not get back. To give you a picture of what 50 billion dollars is it is roughly the GDP of the country of Burma. I can understand why countries want to host the Olympics; it is an honor. It gives countries a chance to show their patriotism. They get the show other countries, in a somewhat friendly competition, their heritage. It is also their privilege to spend hundreds of millions, if not billions as it is in this case.

My question is though, why is Russia spending this much when most of their country is poor? Scott Minto, director of the Sports Business MBA program at San Diego State University says, “the problem is they don’t see the issues that come 8 or 10 years out after they actually host them. The politicians who pushed for the games are long gone and don’t have to face the problems of cost overrides and empty stadiums that aren’t being used after the games end.” It would make more sense and more cost efficient for the games to go around to cities and countries who already have the facilities to host the games.

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2 Responses to Sochi Olympics: Dreams of gold, but spends in the black.

  1. jonesnol says:

    I agree with the aspect of already established countries that have capable facilities that can both host events and take on the masses that flood to the country to witness the best perform their hearts out. However, if you look to a country like Brazil that many thought would be able to handle these demands, they have also crept well above budget and are in danger of not completing many of the planned stadium renovations they planned in time for this summers world cup. a country that boasts one of the largest followers for their countries team with previously established stadiums from private club teams, may not be ready. While a country like South Africa managed to pull off one of the greatest events in the world just 4 years earlier and just barely surpassed their budgets for stadium renovations. I think its more overzealous, boastful politicians claiming to have the best facilities and then having to overspend to hold up their word. Its a show of brass, and spending caps should be implemented to reduce issues in years leading up to these events, and following them.

  2. hornechr says:

    You might find this article about the 1976 Olympics in Montreal Quebec interesting. Apparently they got in way over their heads with all the costs associated and almost went bankrupt as a result.

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