Tuesday, March 4, 2014

The Economic Impact of the Winter Olympics

Eric Collins

The 2014 Winter Olympics in Sochi, Russia just ended this past week and it was full of excitement. Although there were so many highlights to the couple of weeks, the economic side of things for Russia took a large hit. This years Winter Olympics took around $50 Billion to run and after the Olympics they did not really make any of that money back as shown in the image. 

Through ticket sales, sponsorship, and broadcast revenue, all of the other countries that hosted the games earned a little money back, but Sochi really struck out and is in the hole by $50 Billion! Who would’ve ever thought that the Olympics could cost so much to run?
            Although this years Olympics cost so much money there are some positives to having the Olympics in your country. Right now in the United States a huge topic that everyone is talking about is the unemployment rate. There are so many people without any type of job at all. Having the Olympics in your country will decrease the unemployment rate by a lot. All of the setting up, advertising, managing all of the events, ect. All includes someone who needs to run each of them. There are thousands of jobs that need to be filled in order for the Olympics to run smoothly. The pre-work and during the Olympics is just the beginning. With thousands of fans and athletes coming to compete and watch there will be a huge mess afterwards. There are so many jobs created because they have to take down everything Olympics and make it into the original city again. But I guess that is a good example of opportunity cost because in order to have a good Olympics you need to spend money. But by spending all that money they will eventually create jobs and new windows for the country.
            One cool thing that Russia is doing is that for all of the athlete’s rooms and living areas, they are going to make them into affordable living facilities for the people of Russia to buy and live in. This will do a lot of great things for Russia’s economy. By selling or renting all of the living areas this will generate a lot more money. This will also create more jobs and it will enrich the city of Sochi.
            Something else for Russia to look forward too is the 2018 World Cup they are hosting. Although this event is not for a long time, they have to be thinking about planning and preparation after the Olympics is all done. Just like the Olympics, the World Cup will generate a lot of costs as well. Russia is going to be putting out a lot of money to host this event but the ticket prices are high enough where Russia won’t take such a beating on losing money as they did in this year’s Olympics. There is more output in the World Cup than the Olympics. Overall the Olympic games in Sochi played a huge role in Russia’s economy and the country will soon face another similar experience in 2018.



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5 comments:

  1. i found it interesting that the opportunity cost is right away like with the fact that it cost 50biilion dollars. but at the same time some of the opportunity benefits come later like they got recognition from America and we love to help country with financial problems. So we will most likely begin to help Sochi in some way or another and another big benefit would be they now have jobs for a lot of the population because they have to deconstruct everything that had to do with the Olympics to change the town back. So it should be interesting to see how Sochi changes in the next couple of years.

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  2. I like how you explored both the positive and negative aspects of having the Olympics in your country. I also didn't realize just how much money Russia lost through hosting the Olympics. Many are unaware of the extent of the costs it takes to cover the Olympics, and I think that something that may have contributed to Russia not making a lot in ticket sales was the fear of terrorism in the country. Taking that fact into consideration I feel like hosting the Olympics is usually a very positive thing for all involved but considering the location of this specific Olympics, it did more harm than good financially.

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  3. I never realized how much the Olympics impact the job growth in one country. Although there wasn’t much revenue from the Olympics, the overall experience of the Olympics will draw many tourists back to Russia because of all the sites to see there. The Olympics creates jobs that are needed to sufficiently make the Olympics run smoothly, and that may also generate job growth. Because of the job growth, the economy will recover and eventually make a comeback just in time for the 2018 world cup.

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  4. I think this is a really good article. Having the Olympics in your country is a good way to get jobs but those jobs don’t last for long because after the Olympics are over all those jobs go away and all of those workers are unemployment will go back down to what it was before the Olympics.

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  5. Keep in mind that the jobs created by the Olympics that have to do with are temporary and disappear once the Olympics conclude. I thought the new housing in Sochi was very interesting and a great idea for the economy. I also think it's important to note that tourists entering Russia from out of country will severely boost local GDP because these tourists will need places to stay, places to eat, and services that all bring in excellent revenue. Despite the massive short-term costs of holding the Olympics, the long-term benefits are equally astounding.

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