The Economics of the Olympics

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Tommy D. Andersson
Professor in Tourism Management
School of Business, Economics, and Law at Göteborg University

 



Holger Preuss
The Economics of Staging the Olympics: A Comparison of the Games 1972–2008
336 sidor, inb.
Cheltenham, Glos.: Edward Elgar 2004
ISBN 1-8-4376893-3


This is probably the most ambitious effort, so far, to describe economic impacts of Summer Olympic Games. It is a difficult task to compare expenditures and revenues over a time span of more than 30 years and in 7 different countries but the author definitely makes an admirable effort. Only Moscow 1980 is lacking a detailed analysis but there is a wealth of information from the Olympic Games in Munich ’72, Montreal ’76, Los Angeles ’84, Seoul ’88, Barcelona ’92, Atlanta ’96, Sydney 2000, Athens 2004, and Beijing 2008.

In order to make a good economic assessment, opportunity costs are necessary but for understandable reasons, it has not been possible for the author to determine opportunity cost for each Olympic Game. Consequently all Olympic Games seem to be profitable which probably is an illusion. To calculate ‘the bottom line’ is, however, not the major objective of the book.

Holger Preuss, Professor of Sports Economics and Sport Management, Johannes Gutenberg University, Mainz, and member of the Research Team Olympia, has made careful assessments of a number of types of inflow and outflow in terms of visitors, revenue, as well as investments. This categorization of flows is one of the academic contributions of the book and sets a good example for future economic impact studies.

The International Olympic Committee (IOC), with headquarters in Lausanne, is an important actor that is becoming increasingly important also financially. IOC now controls more than 60 percent of the revenues of Olympic Games (Sydney case: p. 278). The author describes IOC as a strong actor with a clear focus and mission. Although this part of the book is interesting, one gets the impression that it gives too rosy a picture. Very little academic critical thinking goes into discussing the concentration of power in an organisation that, not too long ago, lost a lot of its credibility in the discussion about corruption and bribes related to the selection of Salt Lake City as a host.

In fact one of the important messages (between the lines) of this impressive study is that the Los Angeles games in 1984 changed, and maybe saved, the Olympics by the fact that the OCOG (Organizing Committee of the Olympic Games) of Los Angeles succeeded in breaking the power of IOC. The OCOG of Los Angeles had a unique opportunity of doing this since they were the only applicant for hosting the 1984 games. Thus for IOC the choice was either to accept the terms of Los Angeles OCOG or to cancel the games. Thus Los Angeles 1984 represents the beginning of a new, much more commercial and less idealistic era.

The book contains a valuable and very extensive list of references as well as a useful index (although there are no entries for ‘corruption’ or ‘bribes’).

The major contribution of this book is that it gives a wealth of details and succeeds in making these comparable over 30 years and 7 countries. It is a unique source of information and a ‘must-have’ in the reference library of any institution or researcher interested in mega-events.

 

©  Tommy D. Andersson 2006 

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