What’s Really Happening at The Olympics

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The True Cost of the Olympics: Who Profits and Who Pays the Price?

Every four years, the Olympic Games bring the world together to celebrate the achievements of the best athletes from across the globe. As nations prepare to host these prestigious events, the spotlight often falls on the athletes, their performances, and the pageantry of the games. However, behind the glitz and glamour lies a darker, more troubling reality — the financial cost of the Olympics. While the International Olympic Committee (IOC) generates billions of dollars in revenue, the cities that host the games often end up bankrupt, and athletes who compete may not see a fraction of the profits that come from their hard work.

The numbers are staggering. The IOC earned $7.7 billion from 2021 to 2024, but where does all that money go, and who truly benefits from it? Is it the athletes who spend years training for their shot at Olympic glory? Or is it the Olympic brass and corporate sponsors who seem to reap the majority of the rewards?

The IOC’s $7 Billion Revenue: Who Profits?

The IOC is a global powerhouse. It is the governing body behind the Olympic Games, responsible for ensuring that the Olympics happen regularly and under the same set of rules. Based in Lausanne, Switzerland, the IOC controls the Olympic brand, which is worth billions. The primary sources of its revenue come from three categories: broadcast rights, sponsorships, and other smaller activities.

Broadcasting Rights: The Golden Goose of the Olympics

The largest portion of the IOC’s revenue comes from broadcast rights, which account for roughly 55% of their income. This is no surprise, considering the Olympics are a global event that attracts millions of viewers worldwide. The IOC has agreements with national and regional broadcasters to air the Games in their respective countries, generating significant income.

In North America, NBC has been the exclusive broadcaster of the Olympics since 2000, with a recent deal extending through 2036 worth a whopping $3 billion. This kind of revenue ensures that the IOC remains a financial giant in the sports world. However, while broadcasters like NBC profit from the broadcast rights, the actual costs of hosting the Olympics fall largely on the host city and its taxpayers, creating a financial burden that often leads to long-term debt.

Sponsorships: Corporate Interests Cashing In

Another major source of revenue for the IOC comes from corporate sponsorships. The Olympic Partners (TOP) program, which includes big-name brands like Coca-Cola, Toyota, and McDonald’s, provides a significant portion of the funding for the Games. Coca-Cola, one of the longest-standing partners of the Olympics, reportedly pays $93 million for the right to use the Olympic brand in its marketing efforts.

Currently, there are 11 top-tier brands that pay large sums to be associated with the Olympics, making up 36% of the IOC’s total revenue. However, as some companies begin to distance themselves from the Olympic brand — most notably Toyota, which pulled its sponsorship due to concerns over the political nature of the Games and the distribution of funds — this number may decline in the future. The IOC’s reliance on corporate sponsorship is becoming more problematic as it faces growing criticism for prioritizing corporate interests over the athletes and communities it purports to serve.

The Cost of Hosting the Olympics: A Burden on Taxpayers

While the IOC rakes in billions, the cities that host the Olympics are often left with a financial burden that they cannot sustain. Host cities are expected to cover the cost of building venues, creating transportation infrastructure, and providing security — all of which can cost billions of dollars. And despite the IOC’s revenue, most of the funds generated are not used to directly benefit the host cities or the athletes.

Many cities have gone over budget when it comes to hosting the Olympics, with costs often spiraling out of control. For example, in 1980, Lake Placid went 324% over budget, and in 1976, Montreal’s cost overrun reached a staggering 720%. Host cities often end up buried in debt, with taxpayers footing the bill for venues that may never be used again after the Games.

One of the biggest financial problems lies in what is referred to as “white elephants.” These are massive infrastructure projects, such as sports venues and transportation systems, that are built specifically for the Olympics but are underutilized or abandoned after the event. The maintenance costs for these structures can be astronomical, and the long-term benefits for the host cities are minimal. For example, Russia spent $8.7 billion building a new train line for the Sochi Winter Olympics, and Beijing spent $9 billion on a bullet train for the 2022 Winter Games. However, once the Games were over, these projects were left to fall into disrepair, with little or no use.

The IOC’s Disbursement: Where Does the Money Go?

According to the IOC, 90% of its revenue is supposed to be distributed to the Olympic movement. This includes national Olympic committees, international federations, and other sporting bodies worldwide. However, when we look at how the IOC allocates its funds, it’s clear that the majority of the money does not go directly to the athletes or the host cities.

Of the $7.7 billion generated by the IOC, only about 6% of it actually goes directly to the athletes. The rest is absorbed by various organizations and committees, including the national Olympic committees, which are often more focused on their own financial interests than supporting the athletes. Athletes, despite being the ones who generate the excitement and draw viewers, are left to fend for themselves, with many needing to supplement their income with part-time jobs while training for the Games.

In the United States, for example, the average Olympic athlete makes around $20,000 a year. This is barely enough to cover the costs of training, coaching, equipment, and travel. For many Olympians, the dream of representing their country is tempered by the harsh reality of financial instability. While some high-profile athletes, like Simone Biles and Michael Phelps, can secure lucrative sponsorship deals, most Olympians struggle to make ends meet.

The IOC’s Impact on Host Cities

The financial burden of hosting the Olympics often leaves host cities with a lasting legacy of debt and underused infrastructure. In many cases, the promises of increased tourism and economic growth are far from realized. For example, in 1972, Denver became the first city to reject the Olympic Games after voters decided not to allocate public funds to the event. This decision highlighted the growing skepticism surrounding the long-term economic benefits of hosting the Games.

Despite these financial challenges, the IOC continues to push for new cities to host the Olympics, with some cities already struggling to meet the IOC’s demands for infrastructure and funding. The recent changes to the bidding process, which now includes a “dialogue phase” where cities work with the IOC to plan and budget for the Games, have made the process more opaque and less transparent. This has raised concerns about the future of the Olympics and the financial sustainability of the event.

A Possible Solution: Permanent Hosts for the Winter and Summer Games

One potential solution to the financial problems faced by host cities is the idea of having permanent locations for the Winter and Summer Olympics. By designating one city to host the Winter Olympics and another to host the Summer Olympics, the Games could benefit from long-term infrastructure investments and reduce the risk of financial failure for new host cities.

Paris, which is set to host the 2024 Summer Olympics, has already implemented this approach by using pre-existing venues and temporary structures to minimize costs. However, even with this strategy, Paris is still expected to go over budget, as have many other host cities in the past. The idea of a permanent host city could help alleviate some of these financial pressures, but it would also remove the global element of the Olympics, which has always been one of its defining characteristics.

Conclusion: The Olympics’ Financial Imbalance

While the Olympics continue to generate billions of dollars in revenue for the IOC and its corporate partners, the financial burden placed on host cities and athletes is significant. The IOC’s vast wealth has allowed it to maintain a powerful grip on the global sporting landscape, but this power comes at a cost — one that is often borne by taxpayers and athletes, who receive only a fraction of the revenue generated by the Games.

The future of the Olympics is uncertain, and as more cities become hesitant to host the Games due to the financial risks, the IOC must address the growing concerns over its financial model. For now, the Olympics remain a lucrative business for the IOC and its partners, but for athletes and host cities, the financial reality is far less rosy. Until the IOC finds a way to better distribute its revenue and ensure that the athletes who make the Games possible are fairly compensated, the Olympics will continue to be a paradox of profit and sacrifice.