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Does hosting the Olympics mean a gold medal for financial chaos?

Protests over the cost of hosting the Tokyo Olympics this summer begs the question: is London’s Olympic legacy all that it promised to be.
Does hosting the Olympics mean a gold medal for financial chaos?
  • Tokyo’s residents (and many of Japan’s athletes) do not want the delayed 2020 games to go ahead for fear of another wave of Covid-19
  • The history of the Olympics paints a bleak financial picture

The uncertainty over whether Tokyo’s already delayed Olympics can go ahead this summer amid a rising coronavirus wave in the country brings into focus the enormous financial costs of hosting such a large and diverse sporting event. Amid costs that have doubled to over $22bn since Tokyo won the games in 2013, organisers now say that the games would need a minimum of an $800m bailout if all events were held behind closed doors. Unsurprisingly, the prospect of huge financial losses, plus the risk that hundreds of thousands of visitors will bring more Covid variants into the country, means Japanese citizens have started staging loud, and growing, protests against the games going ahead at all. At least violence has been avoided; in 1968, protests against the Mexico City Olympics resulted in an army crackdown and the deaths of 400 people in several days of violent rioting.

While no one could have predicted that a respiratory virus would be the cause of financial mayhem for the Olympics, the event has a long history of cost overruns that would put the average UK infrastructure project in the shade. Alongside this are the equally grand forecasts about the long-term economic benefits of hosting the games, of which the London Olympics are often held up as a prime example. But do any of these claims really stack up?

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