economic dimension of sydney olympics

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Economic dimension of the Olympic GamesUniversity lecture on the Olympics

Holger Preuss

Holger Preuss is Assistant Professor at the German Sport University [email protected]

The contents of this document cannot be reproduced, neither in whole nor in part, without the written consent of the Centre dEstudisOlmpics (UAB).

This text has been published as part of the educational project of the Centre dEstudis Olmpics (UAB), University lectures on theOlympics, aiming to provide open access through its web site to material aimed at university students and professors about majorOlympic-related themes, written by experts on the field. Web site: http://olympicstudies.uab.es/lectures/

of the content 2002 Holger Preuss

of the edition 2002 Centre dEstudis Olmpics (UAB)International Chair in Olympism (IOC-UAB)


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Holger Preuss Economic dimension of the Olympic Games

2002 Centre dEstudis Olmpics (UAB)International Chair in Olympism (IOC-UAB)

2

To refer to this document, you can use the following reference:Preuss, Holger (2002): Economic dimension of the Olympic Games: university lecture on the Olympics [online article]. Barcelona : CentredEstudis Olmpics (UAB). International Chair in Olympism (IOC-UAB). [Date of consulted: dd/mm/yy]

[Date of publication: 2002]


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Summary

1. Introduction ....................................................... .................................. 5

2. The dimension of Olympic Games in comparison ..................................................... ..... 63. The dimension Time .................................................. ....................................... 7

3.1 The start and the end of economic impacts ....................................................... ..... 7

3.2 The development of revenues ................................................... ............................. 9

3.2.1 Revenues from television rights ..................................................... ............. 10

3.2.2 Revenues from marketing ..................................................... ...................... 11

3.2.3 Revenues from ticketing ........................................................ ...................... 12

3.2.4 Revenues from special financing means ................................................... 14

4. The dimension Space ...................................................... ................................... 14

5. Conclusions ...................................................... ................................... 15

Bibliographical references ...................................................... ................................... 16

Further reading ...................................................... ................................... 18

Related web sites ................................................... ...................................... 19


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1. Introduction

The mechanisation and the development of telecommunication in the 1960s gave the opportunity to a

growing number of people to experience the Olympic Games live. In the 1970s, the increased interests of

the TV-audience led to huge ratings. With more private TV-networks competing for the rights to broadcast

the Games, this forced the networks to pay higher fees for the TV-rights of the Olympic Games. Later, in

the 1980s, borders started to open for capital and global players intensified their efforts to reach a world-

wide market and used the Olympic Games as an opportunity to penetrate their market through one single

platform. Since 1985 the International Olympic Committee (IOC) operates its own international marketing

program called The Olympic Program (TOP).

The television broadcast and the creation of the TOP program are both examples of globalisation. Since

the 1960s the IOC gradually increased its power over key financing sources. In the 1990s the IOC was

able to gain control on all television and international marketing negotiations (Preuss, 2002). It generated

68% of all revenues for the Olympic Movement. The IOC then distributed the money mainly to the OCOG

of Nagano 1998 and Sydney 2000. The local origin of financing sources in the past changed to a global

orientation today.

The economic dimension of the Olympic Games can neither be determined by a single figure nor by a

trend through comparing several Games. On the one hand the economic dimension depends on why the

city wants to host the Games, on the other hand it strongly depends on the development level and size of

the host city. Smaller and/or less industrialised cities must invest much more in their infrastructure than

larger cities.

Therefore expensive and cheap Games have to be distinguished. Games are expensive if they

require extensive investments in traffic infrastructure, communication systems, housing and sports facility

construction. Sydney, Barcelona, Seoul, Montreal and Munich invested large sums of money in the

construction of sports facilities. Barcelona and Seoul used, and Beijing will use the Games for extensive

improvements to the infrastructure of the city, while Munich, Montreal and Athens developed parts of their

cities (Meyer-Knzel, 2000). All organisers saw the basic maxim in compensating short-term expenditures

with long-term benefits. Games were cheap if cost were largely limited to organising and staging the

Games. Los Angeles and Atlanta only built a few sports facilities while maximising the use of their existing

infrastructures. Their basic maxim was maximising short-term profit or avoiding any deficit.

The economic dimension of the Olympic Games cannot solely be explained through the financing of the

Games and the necessary investments in infrastructure. Two essential long-term, and often less

considered benefits, for the Olympic city are the enhancing of their image and the creation of a higher level

of awareness. These changes can stimulate tourism and bring decisive arguments for a city to be chosen

as a location for the settling of industry. However there are also other economic and social impacts of

Olympic Games.


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2. The dimension of Olympic Games in comparison

The comparison of some national key figures with the costs of hosting the Olympic Games illustrate the

economic dimension of the Olympic Games for a country.

Table 1 - Games costs in relation to national accounts

Games Costs in US$m6 years prior Games

in % of GDP(6 years period)

in % of governmentconsumption(6 years period)

Olympic Games

Atlanta 1996 2021 0,006 0,026Sydney 2000 3438 0,102 0,553

Olympic Winter Games

Lillehammer 1994 1511 0,245 1,154Nagano 1998 3412 0,015 0,156

Source: Preuss (2001); International Monetary Fund(2000)

Table 1 shows that Olympic Games have no important economic dimension in relation to nationalaccounts. A country can finance Olympic Games easily, while the same dimension is huge for a city. For

the 1976 Olympics, Canada did not give the city of Montreal a financial guarantee. Because of a "written

guarantee that the federal government would not be called upon to absorb the deficit nor to assume

interim financing for organisation" (OCOG Montreal 1976: 55) the OCOG had to stage the Games by

completely financing them itself, with the sole support of the city. In the end, the private revenues of the

OCOG amounted to a mere 5% of the funds required. The remaining 95% were provided by special

financing means and the public sector. When including the interest paid on the debt over the years and the

additional $537 million that was required to complete the facilities after the Games, the Olympic debt

totalled $2.729 billion (Levesque, 2001). The burden of the debt has been absorbed by municipal and

provincial tax dollars with final payment scheduled for the financial year 2005/2006.

Figure 1 compares the economic dimension of the Sydney 2000 Olympic Games with those of the Nagano

1998 Olympic Winter Games, the 1998 Soccer World Championships in France and the 2002

Commonwealth Games in Manchester, England. Revenues from ticket sales, sponsorship, TV-rights and

licensing were chosen to cover the business economic dimensions. Macroeconomic dimensions are

represented by the number of athletes and sports events which indicate costs related to investments in

sport facilities and the organisation. Additionally, the number of tickets is related to spectators (Olympic

tourists) who spent their money in the host city. However, this figure does not distinguish between

spectators who are citizens who are just re-allocating their money and tourists who bring in additionalmoney to the city. This distinction is important when calculating the size of the true economic impact on a

city.


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Fig. 1 - Mega sport events in comparison to the Sydney 2000 Olympic Games

0

25 0

50 0

75 0

1000

Events

Athletes in 10

Tickets in 10,000

Sponsor revenues in US$mTV-rights in US$ m

Ticket revenues in US$m

Licencing in US$ 100,0 00

Olympic Games 2000 -- Olympic Winter Games 1998Olympic Games 2000 -- Olympic Winter Games 1998

0

25 0

50 0

75 0

1000

Events

Athletes in 10

Tickets in 10,00 0

Sponsor revenues in US$mTV-rights in US$m


Licencing in US$ 1 00,000

Olympic Games 2000 --Olympic Games 2000 -- CommenwealthCommenwealth Games 2002Games 2002

0

25 0

50 0

75 0

1 0 0 0

Events

Athletes in 10

Tickets in 10,00 0

Sponsor revenues in US$mTV-rights in US$m


Licencing in US$ 100,000

Olympic Games 2000 -- Soccer World Championship 1998Olympic Games 2000 -- Soccer World Championship 1998

Sources: IOC (1998); IOC (1999); IOC (2001a); Preuss (2000); Tourism Forecasting Council (1998); Herren (2001);Devos (2001)

The economic indicators of Figure 1 solely represent the organising committee. FIFA, for example, does

not share its revenues from the licensing or TV-rights to the organising committees. Thus, this makes the

soccer world championships appearing smaller than the actual revenues indicate. However, it can be seen

that the Olympic Games are the biggest event from an economic point of view.

3. The dimension Time

3.1 The start and the end of economic impacts

Preparing to stage the Olympic Games is a huge effort of adopting the citys infrastructure to the needs of

the event. This explains why the Games are awarded to the host city seven years in advance. The

economic effect begins during the bid process and increase considerably during the preparation phase

(Figure 2).


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Fig. 2 - Phases of economic impacts of Olympic Games

The sizes of the economic impacts are different from Games to Games because the conditions and the

aims of each host city vary (Table 2).

Table 2 Timetable of economic impacts

Yearn= Olympic Year

Situation Impact(Fig.2)

n-11 Idea to bid NOC decisionFirst a bid city does feasibility studies. On the one hand money is spent for thestudies, on the other hand urgent projects are started due to the fact that thestudies show deficits in the structure. In some countries such as USA orGermany many cities are planning to bid for 2012. In 2003 (n-9) one city getsnominated by the NOC to candidate internationally (IOC 2003, 37, 2).

Impact I

n-9 NOC decision IOC decisionThe bid city has to prove that it can reach Olympic standards. Therefore, theydo cost-benefit-analyses and finally write the bid-book. Other activities are thestart of construction projects, the support of Olympic family and to pull ininternational events in order to prove highest motivation to stage the OlympicGames and to reach political consents.

Impact II

n-7 Winning the bid

N IOC decision Olympic GamesConstruction of sport facilities and infrastructure as well as preparation for theGames.

Impact III

n+? Olympic Games ?Use of structure and initiation of follow up impacts, pulling in new industry,leverage tourism effects.

Impact IV

The different amount of autonomous expenditures (investments) can be illustrated by using the examples

of the Barcelona, Sydney and Beijing Olympics. In this simplistic consideration, imports and crowding out

as well as any consumption expenditures are not considered. Figure 3 shows the amount of investmentsduring the seven pre-Olympic years in percentage. Figure 4 shows the effect of the investments based on

an estimated multiplier. In the subsequent years each investment induces further expenditures. The data

refers exclusively to investments in the host cities.

IOC OlympicGames

NOCdecision

Idea tobid

n-11 n-9 n-7 n

II IIII IIIIII IIVV

Time


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Fig. 3: Investments in Barcelona 1992, 2000 and Fig. 4: Effects of the multiplier for Sydney Beijing2008 by index (dA=100) investments in 1992, 2000 and 2008

by index (dA=100)

n-7 n-6 n-5 n-4 n-3 n-2 n-1 n n+1 n+2 n+3 n+40

10

20

30

40

50

60

70Index (dA = 100)

Beijing'08

Sydney'00Barcelona'92

n-7 n-6 n-5 n-4 n-3 n-2 n-1 n n+1 n+2 n+3 n+40

10

20

30

40

50

60

70Index (dA = 100)

Beijing'08

Sydney'00Barcelona'92

Sources: Modified based on Brunet (1993:119); Arthur Andersen (1999:11), Beijing 2008 Olympic Games Bid

Committee (2000); for calculations see Preuss (2000)

In Beijing, all levels of government (municipal, regional and state) and the private sector invested much

earlier than in the case of Barcelona/Sydney. However, the final effect is the same. Once the Olympic-

related investments stop, the economic impact decreases and vanishes completely within a few years.

However, the economic impact IV the Olympic legacy lasts several years longer. For example, hosting

sporting events, tourism, and the possible settlements of new industries in the host city are all follow up

impacts resulting from the Games. Further, the positive or revived image of the city may impact of tourists

interest to the host country. It is estimated that the Sydney 2000 Games will attract more than a million

international visitors to Australia and generate billions of AU$ in tourism export earnings between 1997and 2004 (Tourism Forecasting Council, 1998:13). In different measures a 10% increase in the number of

visitors to Australia will create 30,000 jobs (Australian Tourist Commission, 1999: 10). Research indicated

that the Sydney 2000 Games have changed the image of Sydney and Australia positively for tourism

(Dennis/Wyld, 2001:12). The image changed due to the friendliness of volunteers, the showcasing of

Australian culture and the success of the Olympics and the Paralympics. After the Games attributes such

as friendly, fun or different were at least by Germans more often associated with Australia (Preuss,

2001a).

3.2 The development of revenues

The next analysis will consist of a comparison of single financing sources over the past 30 years. There

are obviously two methodological problems. First, since the Olympic Games were staged in different years

over a long period of time, the inflation makes revenue from the past not as valuable as today. Second, the

Games were celebrated every time in a different country making the exchange rates of the host nation

currency fluctuate too much to easily transfer the revenues in one currency. In order to minimise

transformation errors all currency data is adjusted by purchasing power parities into US$. Then they are

inflation adjusted by the GDP-deflator of the USA ( Preuss, 2000: 24).


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3.2.1 Revenues from television rights

Television is the engine that has driven the growth of the Olympic Movement. The IOC created a television

policy to ensure maximum presentation of the Games to the widest possible audience free of charge.

Fig.5 - Revenues of TV rights of Olympic Games from Rome 1960 to Beijing 2008

1960

1964

1968

1972

1976

1980

1984

1988

1992

1996

2000

2004*

2008*

0

200

400

600

800

1000

1200TOTAL

USA

Europe

Remaining countries

884

699

458419

896086

180

41

1133

2%

3.6%

2%

3.6%

When examining the development of the TV-revenues (Figure 5), we note that the inflation-adjusted

revenues rose slowly until Montreal 1976 and sharply increased afterwards until Sydney 2000. The kink in

the curve was caused by American TV stations competing for TV rights which started at the end of the

seventies. Up to Los Angeles in 1984, the networks greatly contributed to the development of total revenue

by mutually outbidding each other. The fierce competition from the networks for the TV rights was the

result of large American enterprises who were prepared to pay huge prices for commercial TV time. At the

end of the eighties, the same situation developed in Europe as a result of the increasing number of private

networks.

The figures deviating from the linear increase since 1976 can be explained as follows: The Moscow 1980

Games earned lower revenues than expected because the commercial contracts were partly adjusted

downwards due to the boycott of the Western world. The revenue decrease in Seoul 1988 may be the

result of the fear of a new boycott and the large time-lag to the financially strong regions of North America

and Europe (Kim, 1990). It is expected that the rates will fall again in the future leading to a second kink.

The development of future rates can already be foreseen, since TV rights have been sold to the decisive

regions until 2008 in Beijing.

In the USA, the most significant market for the TV rights, we can note a distinct regression. The leap for

the 2000 Games is caused by the unbalanced distribution of funds made by the IOC. In fact, the IOC will

transfer a total of US$2.35 billion to the OCOGs from broadcasting revenue until 2008. Even today, it is

obvious that the hosts of the Athens 2004 and Beijing 2008 Olympics must accept constant or even lower

revenues from selling TV rights for the USA depending on inflation. Only a possible share of profits earn by

NBC (2004 and 2008) and EBU (2008) from the sales of commercial time could bring a further increase.

This can be possible only if a certain number of sales is reached. Since the 1960 Games in Rome, the

* inflation rates estimated; profit share from NBC and EBU not includedSource: Preuss (2002)


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EBU has held the European rights for television of the Olympics. The EBU will continue to be the official

broadcaster until 2008. A total of US$ '95 1.16 billion of the sales revenues are paid to the OCOGs. It is

interesting to note that the increase in revenues develops in the same way as it did in the USA twelve

years earlier.

Fig.6 - Revenues from TV rights from Squaw Valley 1960 to Salt Lake City 2002

1960

1964

1968

1972

1976

1980

1984

1988

1992

1994

1998

2002

0

200

400

600

800

1000

1200TOTAL

USA

EBU

Remaining countries

0.2 4.8 7.522 25

38

150

363318

367

469

594

Source: calculated by Preuss (2000); IOC (2001c)

The sales of the rights for the Olympic Winter Games developed similar to those of the Olympic Games

(Figure 6). However, traditionally, revenue for the Winter Games has been much more dependent on

American stations. This explains the kink of the Calgary Games in 1988 broadcast during prime time hours

in the USA. Although in 2002 the Games will be held in the USA and television rights will be higher, we

note that it has become a more independent source IOC (2001c: 3).

3.2.2 Revenues from marketing

Sponsoring has become the second pillar of Olympic financing. Prior to 1984 no real international

marketing existed and fewer than 10 NOCs generated any revenue from marketing programs. Since 1996

long-term broadcast and sponsor agreements signed through 2008 have secured the financial future of the

Olympic Movement. The Olympic Program (TOP), launched by the IOC in 1985, provides funding to all

199 NOCs, to the OCOGs and the IOC. In addition, it provides a global promotional platform for the

Olympic brand across 199 countries. It is a fact that the above mentioned payments for TV-rights aredependent on Olympic sponsorship. In 2000 national and international sponsors bought approx. 35% of

the advertising time during Olympic broadcasting and therefore the sponsors help refinance the

investments of the TV-stations (Preuss, 2001b).

Since Los Angeles 1984 the number of sponsors was reduced which increased the revenues dramatically

(Figures 7 and 8). Due to problems to secure exclusivity in the host country the NOC and the OCOG

started in 1996 to run joint marketing programs.


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Fig.7 - Number of enterprises advertising withOlympic Games (without licensees)

Fig.8 - OCOG revenues from sponsoring

742

325

98 80107 119 104

Munich'72

Montr

eal'7

6

Moscow

'80

LosA

ngele

s'84

Seoul'8

8

Barcelon

a'92

Atlan

ta'96

Sydney

'00

0

200

400

600

800Number of enterprises

0

040

219 215

550588 588

Munich'72

Montr

eal'7

6

LosA

ngele

s'84

Seoul'8

8

Barce

lona'92

Atlan

ta'96

Sydn

ey'00

0

100

200

300

400

500

600

Source: Preuss (2000)

An important new source of financing will be merchandising. In Atlanta and Sydney the licensing fees were

approx. US$'95 44 million. If the revenues of merchandising achieved in the short period before and after

the Games are compared to the revenues of the largest single American sport event, the Super Bowl, the

turnover of the Olympic Games is four times higher (Ruffenach, 1996). In Sydney 2000 it amounted to

approx. US$'95 500 million. The IOC is expected to create its own international merchandising program and

therefore, increase the dimension of this source.

However, there is a concern that marketing will be to much emphasised as financing source and therefore

over-commercialise the Olympic Games. Empirical data evaluated during the Games in Sydney 2000

(n=1973) showed that 53,4% saw commercialisation as a threat for the Olympic Games in the next 20

years. The same concern was given by 518 P.E. students from Germany and Austria (62,2%). However,

that is already lower than after the 1996 Atlanta Games. In a survey 66% of German tourists (n=212) and

72,3% of 628 P.E. students felt this threat (Messing/Mller, 1996; Preuss, 1997).

3.2.3 Revenues from ticketing

Ticketing has been an important source of financing since Athens 1896 (Figure 9). It lost some significance

in the 70s and 80s because the financing was mainly done through public sources. However, in Atlanta

and Sydney ticketing was a source that contributed approximately 23% of the OCOG budget. The growing

number of events combined with the larger sport facilities has led to an increase in the number of available

tickets for the Games.


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Figure 9 - Total number of entrance tickets and share of tickets soldfrom Munich 1972 to Beijing 2008

1972 1976 1980 1984 1988 1992* 1996* 2000* 2008***0

2

4

6

8

10

12Tickets in million

0

20

40

60

80

100%

Utilization rate of venues (%) Total of tickets Tickets sold

4.4

3.3

5

3.2

6.1

5.3

7.8

5.34.7

3.3

4.8

3.8

11

8.566% 74%**

90%

80%

93%

80%

77%

6.7

87%

7.6

9

7

77%

* Free tickets could not be considered in the utilization rate since they were included in

accreditation.** ERA (1981) stated an utilization rate of 65%.*** Estimated by Beijing 2008 Olympic Games Bid Committee (2000)Sources: Preuss (2000); Beijing 2008 Olympic Games Bid Committee (2000)

A comparison of ticket sales revenues of different Olympic Games is impossible due to the manifold

factors which are influenced by location and country as well as by the policy pursued by the respective

OCOG. However, the total gained revenues through the selling of entrance tickets should be displayed in

order to show its economic dimension.

Fig.10 - Total ticket sales revenues from Munich 1972 to Beijing 2008

Munich'72

Montr

eal'7

6

LosA

ngele

s'84

Seoul'8

8

Barce

lona'92

Atlan

ta'96

Sydney

'00

Beijin

g'08*

0

100

200

300

400

500in million US$'95

58.5 56.56

227.56

42.61

91.7

416.64

166.4

468.35

* inflation rate estimatedSources: Preuss (2000);Beijing 2008 Olympic Games Bid Committee (2000); IOC (2001b)

Figures 9 and 10 show the financial potential of this financing source for the US$'95 468 million achieved by

the OCOG of Sydney 2000. The high revenues at the Los Angeles 1984, Atlanta 1996 and Sydney 2000

Olympics were reached due to the large number of tickets sold at relatively high prices (Preuss, 2000).


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3.2.4 Revenues from special financing means

Olympic commemorative coins, postage stamps and lotteries are called special financing means (Figure

11). The government of the host country must approve them prior to their usage to finance the Olympic

Games.

Olympic coins as a finance source was used for the first time in Finland in order to finance the Helsinki

Games in 1952. However, the peek of this source was reached in Munich 1972, when the coins financed

the major part of the Games. If one considers the revenues of OCOGs from the selling of Olympic coins, a

decline in the significance of this financing source is becoming evident.

Fig. 11 - OCOG revenue from selling Olympic coins, stamps and from the lottery

Munich'72

Montr

eal'7

6

Moscow

'80

L.A.'84

Seoul'8

8

Barcelon

a'92

Atlan

ta'96

Sydney'00

Beijin

g'08

0

200

400

600


*

**14.6

56.3

187.2

52.5

157.6

260.25

735.5

18.3*** 5.1

Olympic Coins

Munich'72

Montr

eal'7

6

Moscow

'80

LosA

ngele

s'84

Seoul'8

8

Barcelon

a'92

Atlan

ta'96

Sydney'00

Beijin

g'08

0

2

4

6

8

10million US$95

?6.2 millionrubles'80

OCOG didnot sharerevenues

3.42

5.19

7.27



7.8

Olympic Stamps

Munich'72

Montr

eal'7

6

Moscow

'80

L.A.'84

Seoul'8

8

Barce

lona'92

Atlan

ta'96

Sydn

ey'00

Beijin

g'08

0

100

200

300

400


195.4183.6

nolottery

Rubel368 m

481.6

203.5

117

nolottery

nolottery

Olympic Lottery

* value calculated solely by means of exchange rate** according to a letter from R. Huot(1997), indirect OCOG revenues were higher.*** estimated, according to a letter from B. Elphinston (2000)Sources: Preuss (2000); Beijing 2008 Olympic Games Bid Committee (2000)

Olympic stamps are also one of the oldest financing sources for the Games. In Athens 1896 and Tokyo

1964 they helped finance the Games significantly. Finally, an Olympic lottery is a financing source that

collects money from the citizens such as through the sale of Olympic coins and stamps. However, newlotteries cannot be started easily and therefore have been no financing source for several past Games.

4. The Dimension Space

Space is another element that is important to consider when examining the economic dimensions of

Olympic Games. The smaller the region, the more autonomous money comes in and the bigger is the

economic impulse for the city. However, in a small region the imports are greater and therefore the impulse

loses its power sooner. The money is spent outside the region and therefore is lost. A similar effect

happens if the Games are staged in developing countries. The other extreme is seen if the whole world isexamined. Then there would be no impulse, because no autonomous money comes in and no money

leaves the world. This case demonstrates that the economic dimension of Olympic Games is strongly

dependent from the size of the region.

At the beginning of the Modern Olympic Games, its financing was mainly done by the OCOG and the

government. The only exception had been the ticket sales and consumption expenditures of foreign

tourists, who spent autonomous money in the region. However, the economic dimension of the Games

was basically reduced to the host nation. Globalisation has changed both the financing of the Olympic

Games and the benefit a host nation can expect through staging Olympic Games. Technology and


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mechanisation enabled live coverage of the Olympic Games since Tokyo 1964. Additionally, the Internet

condensed the flow of information about the Games since Atlanta 1996. The world became a global

village.

The three main financing sources, TV-rights, sponsoring and ticketing mainly stem from consumers all

over the world. That secures a host city high autonomous revenues which create a positive economic

impulse. This global dimension became visible in the late 1980s and can be seen today by the high

number of bidding cities for 2012.

5. Conclusions

The run of the time is difficult to measure and the economic dimension of Olympic Games is difficult to

calculate as it varies from city to city. It has become clear that the staging of Olympic Games from a

financial point of view is much bigger than all other major sport events. Although the Games have no

crucial dimension for a state it has one for a city and a region.

Overtime the financing sources became global. In other words the financing of the Games is mainly done

by consumers from all over the world. The USA still plays a key role due to the fact that 70% of the TOP

sponsors and 55% of the TV-rights come from that country.

The IOC has taken over the control of most major financing sources. It distributes the revenues among the

NOCs, Olympic IFs and some sports orientated organisations. As such, the economic dimension of the

Olympic Games has spread all over the world.

Since the 80s two decisive important changes occurred for a host of the Olympic Games. First, the OCOG

can be confident that the Games will have a financial surplus when subtracting the operative costs from

the revenues. Secondly, the Games have reached a dimension that requires huge sport facilities and

adequate infrastructure for the athletes, tourists and media representatives. Although the IOC has

controlled the growth concerning the number of athletes and sports, gigantism has become obvious in

other dimensions. This can be seen by the significant larger number of ticket sales (Figure 9) and more

media representatives at the Games than athletes (IOC, 2001b: 9).

The shift from the problem of financing the organisation of the Games to a provision of adequate

infrastructure did not change the fact that the Olympic Games are still an event that has reached the

border of being financially viable.


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Bibliographical references

Arthur Andersen (1999): Economic Impact Study of the Sydney 2000 Olympic Games. Centre for RegionalEconomic Research, University of Tasmania.

Australia Tourist Commission (1999): Fact Sheets and Speech Notes. Sydney : Australian TouristCommission.

Beijing 2008 Olympic Games Bid Committee (2000): Bid Book, Beijing : Beijing 2008 Olympic Games BidCommittee. http://www.beijing-2008.org/olympic_new/english/features/candidature.html

Brunet, Ferran (1993): Economy of the 1992 Barcelona Olympic Games. Lausanne : International OlympicCommittee.

Dennis, A; B Wyld (2001): Tourism primed for a recovery, thanks to new Olympic image, Sydney MorningHerald, Sep. 29, p. 12.

Devos, N. (2001): (Commonwealth Games Chief Commercial Department) (Aug 29, 2001), letter.

Elphinston, B. (2000): letter, Jan 17.

ERA (1981): Report on costs, revenues, and economic activity which will be generated by conduct of the1984 Summer Olympic Games in the City of Los Angeles. Los Angeles : Economics Research Associates.

Herren, A. (2001): (FIFA Division Communication) (Sep 27, 2001), letter.

Huot, R. (1997): letter, Jun 20.

International Monetary Fund (ed.) (2000): International Financial Statistics. Yearbook 2000. Washington(D.C.) : International Monetary Fund

IOC (1998): Marketing Matters, no. 13. Lausanne : International Olympic Committee.http://multimedia.olympic.org/pdf/en_report_279.pdf

IOC (1999): Marketing Matters, no. 15, Lausanne : International Olympic Committee.(http://multimedia.olympic.org/pdf/en_report_277.pdf)

IOC (2001a): Marketing Matters, no. 18, Lausanne : International Olympic Committee.http://multimedia.olympic.org/pdf/en_report_274.pdf

IOC (2001b): Sydney Games of the Olympiad: facts and figures. Lausanne : International OlympicCommittee.

IOC (2001c): Marketing Matters, no. 19. Lausanne : International Olympic Committee.http://multimedia.olympic.org/pdf/en_report_273.pdf

IOC (2003): Olympic Charter. Lausanne : International Olympic Committee.http://multimedia.olympic.org/pdf/en_report_122.pdf

Kim, Un-Yong (1990): The Greatest Olympics: from Baden Baden to Seoul. Seoul : Si-sa-yong-o-sa.

Levesque, K. (2001): Il y a 25 ans les Jeux: une monstrueuse aventure financire, Le Devoir, Jul 7.

Meyer-Knzel, M. (1999): Stdtebau der Weltausstellungen und Olympischen Spiele. Stadtentwicklung derVeranstaltungsorte. Dissertation at the Faculty Architecture of the Technische Universitt Carolo-Wilhemina, Braunschweig.

Messing, M; N. Mller (1996): Veranstaltungsbesuch und sportpolitische Polarisation deutscher Olympia-Touristen in Barcelona 1992, in N. Mller; M. Messing (eds.),Auf der Suche nach der Olympischen Idee.Bonn : Kassel, pp. 219-250.

Mller, N.; M. Messing (1997): unpublished tables to report on the survey among German Olympic tourists

in Atlanta'96. Sports Faculty of the Johannes Gutenberg Universitt-Mainz.


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OCOG Montreal (1976): Games of the XXI. Olympiad, Montreal 1976, Official Report, vol. 1. Montreal :OCOG 1976.

Preuss, H. (1997): Olympic Ideals as Seen by German and Austrian P.E. Students, in CIPC (ed.) and N.Mller (red.), Coubertin and Olympism Questions for the Future. Report of the Congress 17th to 20thSeptembre 1997 at the University of Le Havre. Niedernhausen/Strasbourg/Sydney, p. 281-286.

Preuss, H. (2000): Economics of the Olympic Games: hosting the Games 1972 2000. Sydney.http://www.sport.uni-mainz.de/Preuss/eprbeitr.html

Preuss, H. (2001): Le implicazioni economiche delle Olimpiadi, in Luigi Bobbio and Chito Guala (ed.s),Olimpiadi e grandi eventi. Verso Torino 2006: come una citt pu vincere o perdere le Olympiadi. Roma :Carocci, p. 37-55.

Preuss, H.(2001a): homepage: (http://www.sport.uni-mainz.de/Preuss)

Preuss, H. (2001b): Financing Source Development of Mega Sportevents, paper presented at the 6thAnnual Congress of the European College of Sport Science. Cologne 24.-28. July 2001.

Preuss, H. (2002): Olympic economics. the Games from 1972 to 2008. Beijing : [s.n].

Ruffenach, G. (1996): "Sell, Sell, Sell," The Wall Street Journal(Jul 19), R15.

Tourism Forecasting Council(1998): The Olympic Effect. A Report on the Potential Tourism Impacts of theSydney 2000 Games. Canberra : Tourism Forecasting Council.


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Further reading

Brunet, F. (1995): An economic analysis of the Barcelona 92 Olympic Games: resources, financing, andimpact, in M. Moragas Sp; M. Botella (eds.), The Keys to success: the social, sporting, economic andcommunications impact of Barcelona92. Barcelona : Centre dEstudis Olmpics i de lEsport, p. 203-237.

Chalip, L. (2000): Volunteers and the organisation of the Olympic Games: economic and formativeaspects, in M. Moragas; A. B. Moreno; N. Puig (eds.), Volunteers, global society and the OlympicMovement: International Symposium Lausanne. 24th, 25th and 26th November 1999 . Lausanne :International Olympic Committee, p. 205-214.

Chappelet, J.L. (2001): Management of the Olympic Games: the lessons of Sydney, European Journalfor Sport Management, special issue, vol. 8, p. 128-136.

Getz, D. (1997), The impacts of mega events on tourism: strategies for destination. in The Impacts ofmega events: papers of the Talk at the Top Conference, 7-8 July 1997. stersund : Mid SwedenUniversity.

Guttman, A. (1984): The Games must go on: Avery Brundage and the Olympic Movement. New York :

Columbia University Press

Hall, C.M. (1992): Hallmark tourist events: impacts, management and planning, London : Belhaven.

Husermann, H; Siebel, W. (eds.): Festivalisierung der Stadtpolitik. Stadtentwicklung durch groeProjekte, Leviathan, Zeitschrift fr Sozialwissenschaft, special vol. 13, Opladen.

Hill, C.R. (1996): Olympic politics, 2nd ed. Manchester : Manchester University Press.

Hoberman, J. (1986): The Olympic crises: sport, politics and the moral order. New Rochelle, NY : A. D.Caratzas.

Houlihan, B. (1994): Olympic sport, politics and economics, in Houlihan B. (ed.), Sport and internationalpolitics. New York : Harvester-Wheatsheaf.

Howard, D.R.; J.L. Crompton (1995): Financing sport. Morgantown : Fitness information technology.

Kim, J. G [et al.] (1989): Impact of the Seoul Olympic Games on national development. Seoul : KoreaDevelopment Institute.

King, F.W. (1991): It's how you play the game: the inside story of the Calgary Olympics. Calgary : Script.

Landry, F.; M. Yerls (1996): The International Olympic Committee: one hundred years. The idea, thepresidents, the achievements, vol. 3. Lausanne : International Olympic Committee.

Lenskyj, H.J. (2000): Inside the Olympic industry: power, politics, and activism. New York : State Universityof New York Press.

Moragas, M; N. Rivenburgh; J.F. Larson (1995): Television in the Olympics. London : John Libbey.

Park, S.J. (1991): The Seoul Olympics: the inside story. London : Bellew.

Pound, R.W. (1996): The Importance of commercialism for the Olympic Movement, Olympic Message Sources of Financing Sports, vol. 3, p. 10-13.

Preuss, H. (2000): Globalization and its economic impact on the Olympic Games, in Report of the Thirty-Ninth Session in 1999. Athens : Hellenic Olympic Committee, p. 123-142.

Reich, K. (1986): Making it happen: Peter Ueberroth and the 1984 Olympics. Santa Barbara : CapraPress.

Ritchie, B.J.R.; B.H. Smith (1991): The Impact of a mega-event on host region awareness: a longitudinalstudy, Journal of Travel Research, no. 1, p. 3-10.

Ueberroth, P: R. Levin; A. Quinn (1985): Made in America: his own story. New York : W. Morrow.


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Related web sites

Athens 2004 Olympic Gameshttp://www.athens2004.com/

Australian Tourism Commissionhttp://www.australia.com/

Beijing 2008 Olympic Gameshttp://www.beijing-2008.org/

Broadcast revenue generation and distributionhttp://www.olympic.org/uk/organisation/facts/revenue/broadcoast_uk.asp

European Broadcasting Unionhttp://www.ebu.ch/

FIFAhttp://www.fifa.com/en/index.html

International Olympic Committeehttp://www.olympic.org/

IOC Top Programhttp://www.olympic.org/uk/organisation/facts/programme/sponsors_uk.asp

Manchester 2002 Commonwealth Gameshttp://213.131.178.162/home/

NCBhttp://www.nbc.com/

Olympic broadcasting

http://www.olympic.org/uk/organisation/facts/broadcasting/index_uk.asp

Olympic licensinghttp://www.olympic.org/uk/organisation/facts/programme/licensing_uk.asp

Olympic Marketinghttp://www.olympic.org/uk/organisation/facts/introduction/index_uk.asp

Olympic Sponsorshiphttp://www.olympic.org/uk/organisation/facts/programme/index_uk.asp

Salt Lake City Broadcast Operationshttp://multimedia.olympic.org/pdf/en_report_71.pdf

Sydney 2000 Olympic Games informationhttp://www.gamesinfo.com.au/home.html

The Sydney 2000 Olympic Games broadcasthttp://multimedia.olympic.org/pdf/en_report_249.pdf

economic dimension of sydney olympics

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