In a 2014 editorial in The Washington Post on the economics of the Olympics, Steve Blakely wrote, "Olympics typically lose money at taxpayer expense and leave no long-term economic benefits." Blakely is not alone in this thinking. Writing on the effects of the Olympics on host cities, Binyamin Appelbaum came to the conclusion that "there is strikingly little evidence that such events increase tourism or draw new investment. Spending lavishly on a short-lived event is, economically speaking, a dubious long-term strategy." There are exceptions: Los Angeles in '84 and Barcelona in '92 were both profitable Olympic games that boosted the local economy.But sometimes, Olympic host city economic issues can be downright disastrous. Billions of dollars in debt passed on to taxpayers, recessions, squatters in Olympic Villages, so-called "white elephant" stadiums left crumbling, and much, much worse. It happens more than you might think. Read on for some of the worst all-time examples of economic issues following Olympic games and learn about the effects of the Olympics on host cities.
The Games: 2004 Summer Olympics, Athens, GreeceDamage Done: Did the 2004 Olympics hurt Athens financially? Steve Blakely with The Washington Post is pretty blunt in his assessment: "The Olympics helped bankrupt the country." Ouch.
You've heard of the so-called Greek Depression of 2009, right? The 2004 games definitely didn't help, though experts disagree on how much it hurt things. Taxpayers were on the hook for €50,000 per household following the games, and in 2008, Athens still faced a bill of about $784 million to maintain the "ghost town" left behind by the Olympics (most of the venues built for the occasion famously sat empty for years after the athletes left).
As of June 2016, European authorities have handed out more than $8.4 billion in bailout aid to Greece. Some economists, however, say the 2004 games only contributed "modestly" to the problem, the roots of which date back decades.
The Games: 2014 Winter Olympics, Sochi, RussiaDamage Done: Simply put: "Russia’s goal of developing Sochi into a global resort has failed." That's just one of several takeaways from a 2015 study by Dr. Martin Müller of the University of Birmingham on the boondoggle that was the Sochi games. Another one? In order to maintain the infrastructure created to host the games, Russia would have to pay more than $1 billion per year. To make things worse, an $8.5 billion railway (yes: billion) built to help with transportation was "barely running" a year later, and hotels in Sochi were "struggling to survive." The games cost an estimated $55 billion, 96.5% of which was paid for by the public, the "highest proportion of public money for any Olympic Games on record."
The Games: 1976 Summer Olympics, Montreal, CanadaDamage Done: The mayor of Montreal famously declared in '76 that "the Olympics can no more have a financial deficit than a man can have a baby." The mayor was famously wrong: the city had to implement a tobacco tax to pay off the $1.5 billion debt from the games, including paying for a new Olympic stadium that wasn't even finished in time (it didn't get a roof until 1987). Taxpayers didn't pay off the stadium until 2006, but by 2012 it was deemed profitable to operate.
The Games: 1998 Winter Olympics, Nagano, JapanDamage Done: It's unclear, exactly, because the Olympic Committee vice-secretary general, Sumikazu Yamaguchi, had all of the financial documents burned (seriously). Estimates say it had to be close to an $11 billion debt (roughly $30,000 per family and growing). The city of Nagano, in fact, was plunged into a recession following the games, and the local economy didn't fare much better during the games, either: hotels reported lower-than-expected occupancy and organized crime reportedly increased thanks to new roads allowing for "a nifty new business trucking toxic waste from factories in the industrial heartland of Japan and dumping it quietly in Nagano's countryside."