Evaluate the benefits and drawbacks to a country hosting a large sporting event like the Olympics or the FIFA World Cup

T he total costs for the host city or country include the building and reconstruction of the objects for the competitions, the accommodation for athletes and guests, the up-to-date facilities for media and the entire related infrastructure. T he construction of many facilities such as a velodrome for bicycle racing or a track for bobsleighs or skeleton is particularly expensive in view of their specific nature. I t should also be mentioned that the facilities should be of high capacity: for instance, the stadium, where the opening and closing ceremonies of the summer Olympics are to be held, is often required to be up to 100 000 or more spectators.

W ithin the period of time between applying for the event and the period of the event conducting the cost of construction and the price of the land can increase substantially. I n addition, the first supporters of the event in a particular city or country are interested in intentional understating of the real cost of the facilities stated until they seek the approval of the public. A nd when the businessmen from the alleged cityor country enter the competition with other contenders, there is a natural tendency to adapt to the demands of the competitors and add to their plans attractive, but unnecessary details.

T he projected budget funds are never enough to cover actual costs. A s a rule, interested cities spend up to 100 million dollars just to submit their bids to host the events like the Olympic Games. I f the application process were fully competitive, any expected economic benefits would continue to grow in the course of competition between the cities or countries striving to hold the events: only the cities with the highest expected profit could win, putting in the application profit, just $ 1 above the expected profit of the second place that would bring a small benefit to the winning city or country. B ut this process is not based on dollar amounts; rather, the cities bid by offering facilities and guaranteeing financing and security.

S ome of these expenses lead to the creation of an improved, more modern infrastructure in the hosting city or country, but others leave it burdensome assets. M any facilities are built specifically for the event, they are not used or underused already in 16 or 17 days later the competition was conducted, moreover, their maintenance requires tens of millions of dollars a year, and they occupy increasingly scarce land. On the whole, total revenues from the summer Olympic Games, for example, currently average from about 4 to 5 billion US dollars, and approximately half of this amount income from the winter games (which are also less costly due to less number of participants and facilities and less construction). A lmost half of the money goes to pay for the activities of the international federations, national Olympic Committees and the International Olympic Committee. Obviously, if the economic benefits of holding the large-scale sporting events exist, they are unlikely to take the form of improving the budgets of local governments that raises the question of whether the broader, longer-term or less tangible economic benefits should be expected at all.