The Secrets Behind Olympic Economy

——An Analysis on Commercial Models of the Olympic Games

Chenxi Ma*
Business School, Chongqing College of Humanities, Science & Technology, Chongqing, 401520, China
*
Corresponding author. Email: [email protected]

ABSTRACT
The Tokyo 2020 Olympic Games (which was actually held in the summer of 2021) and Olympic Winter Games Beijing
2022 have come to successful conclusions, "Olympic Economy" has once again in the social spotlight. According to the
surveys, Tokyo 2020 Olympic Games lost 6.4 billion dollars, which could be the highest cost in the Olympic games,
whereas many media and authoritative institutions predicted that Olympic Winter Games Beijing 2022 would achieve
considerable profits despite precise financial data are not yet available. Because the two Olympic Games were separated
by only six months under the same epidemic (COVID-19), which produced very different profit results, the business
model of the Olympic Games has attracted the attention of scholars. This essay will collect and analyse expenditures
and receipts data of several Olympic Games based on a review of studies on the economic impact of hosting the Olympic
Games, and compare the differences in the commercial model between previous and recent period Olympic Games (Los
Angeles 1984 Olympic Games as the dividing line). It further explores the factors influencing the profit and loss of
hosting the Olympic Games, and comes up with some recommendations in three different ways: the eight years before
the Olympic Games, during the Olympic Games, and after the Olympic Games.

Keywords: the Olympic Games, commercial model, economic impact, receipts and costs

Angeles 1984 Olympic Games achieved the successful

1. INTRODUCTION conclusion with profit about 0.25 billion dollars. Such
pioneering work instituted a new era of "Olympic
The Olympic Games is a large-scale physical economy", putting forward a direction for innovation on
education event that boasts the most influential the later Olympic Games’ commercial model as well. In
worldwide, and also an international feast which mixes addition, people were becoming concerned about
physical education, politics, economy, and culture. It economic benefits the Olympic Games brought, and
only focused on humanity and sports spirits for a long imitated Ueberroth’s behaviors or improved base on it.
time since it had been established in 1896, therefore From then on, different degrees of profits existed in the
bringing a heavy financial burden to host cities despite later Olympic Games, for example, Seoul 1988 Olympic
only lasting 15 days. For instance, Montreal 1976 Games profited 0.47 billion dollars, Sydney 2000
Olympic Games, which led to local government debt Olympic Games profited 1.756 billion dollars [1].
owed over one billion dollars, and repaid completely until However, the loss situation has still been frequent. For
the late 20 century, is widely known as the "Montreal example, Rio 2016 Olympic Games lost 20 billion dollars,
trap". It is also a reason why Los Angeles became the Tokyo 2020 Olympic Games lost 6.4 billion dollars. The
only city to bid for hosting the 1984 Olympic Games. appearance of two opposite results meant that the present
However, the commercial model of the Olympic Games commercial model does not guarantee profits. Therefore,
started to change, which reversed this situation, from people need to constantly explore and expand to search
losses to profits. Peter V. Ueberroth, the president of the for a new commercial model that is most suitable for
Los Angeles Olympic Organizing Committee, claimed themselves.
"developing Olympic by Olympic", hence he innovated a
new model through improving the threshold for The paper is organized as follows. Section 2 reviews
sponsorship, adding payment for broadcast, condensing relevant literature about "Olympic economy". section 3
the costs and other commercial methods. Finally, Los collects and analyses financial data of the Olympic
Games, and analyses what causes its success or failure.

© The Author(s) 2022

Y. Jiang et al. (Eds.): ICEDBC 2022, AEBMR 225, pp. 396–404, 2022.
https://doi.org/10.2991/978-94-6463-036-7_58
 The Secrets Behind Olympic Economy 397

Finally, conclusions are summarized and some 2.2 The research about economic the effect of
suggestions are proposed in section 4. the Olympic economy
2. THE ECONOMIC IMPACT OF THE In terms of the Olympic Games, it is widely accepted
OLYMPIC GAMES that hosting the Olympic Games would bring positive
effects in various aspects for the countries and cities
2.1 The definition, model and classification of where organising the Olympic Games, such as economic
growth, increasing employment rate and improving
"Olympic Economy"
international image, which is beneficial without harm. At
"Olympic Economy" has gradually developed a the same time, there are many researches about the
particular economic phenomenon of the development of economic effect of the Olympic economy on the
world economy since Los Angeles 1984 Olympic Games. academic region, but every scholar has different views
People also gradually formed a specific understanding of and each sticks to his own view.
the concept of "Olympic Economy" in the process of
hosting the Olympic Games. Currently, "Olympic 2.2.1 Hosting the Olympic Games has positive
Economy" can be comprehended in two different ways, impacts on the hosting country
which are broad and narrow ways. The narrow definition
limits the "Olympic economy" to the direct economic Rose and Spiegel thought that there is a significant
income, mainly including the sales income of television relationship between the amount of trade and the hosting
broadcasting rights, funds of designated sponsors, ticket of the Olympic Games. The researchers concluded that
sales income, and other sponsorships. Its biggest the permanent impact of the Olympic Games will
beneficiaries are the International Olympic Committee increase the trade volume by no less than 20% in all
and the organising committees of the hosting countries, results. In addition, a similar impact can be seen in
but it always lasts a few days(during the Olympic Games). countries that failed to bid for the Olympic Games,
For the broad definition, it is a general term of the direct because the behavior of bidding for the Olympic Games
economy and indirect economy about the Olympic itself shows the hosting country's (region's) attitude
Games, except for different kinds of revenue from towards trade liberalization, which will permanently
bidding and hosting the Olympic Games, it also includes increase trade flows [6]. Furthermore, Brueckner and
other indirect economic effects, such as economic Pappa researched Macroeconomic impact of bidding the
impacts and social development impacts for the countries Olympic Games through using Panel data of 188
and cities which hold the Games [2]. countries from 1950 to 2009, they found that it showed
noticeable increment in economic activities related to
Tao and Zhai divide "Olympic Economy" into four investment, consumption and output of the bidding
basic models, "low front and high rear" type (Los countries between 9 to 7 years before the actual event in
Angeles 1984 Olympic Games), "low front and low rear" bidding countries, for hosting countries, they also
type (Moscow 1980 Olympic Games), "high front and experienced significant increases in investment,
low rear" type (Montreal 1976 Olympic Games), "high consumption, and output 5 to 2 years before the hosting
front and high rear" type (Tokyo 1964 Olympic Games) of the Games.[7]
[3].
Gao and Guo pointed out that "Olympic Economy" is 2.2.2 Hosting the Olympic Games has negative
an attention economy, a brand economy, a momentum impacts on the hosting country
economy, and a concept economy. Furthermore, they
explored and claimed "Olympic Economy" is manifested Baade and Matheson held a sceptical attitude that
by three major effects: "Polymerization Effect", "Fission hosting the Olympic Games would bring a strong
Effect" and "Radiation Effect" [4]. Zhang et al. economic increase. Taking the rising of employment
Summarized it as positive and negative effects. For posts as an example, they believed all of them are
positive effects, it includes tangible economic effects and temporary. Los Angeles 1984 Olympic Games is
intangible value (cultural) effects. In addition, tangible recognized as a great success. It is no exception that, once
economic effects include direct economic effects, the Olympic Games have left the hosting countries, there
indirect economic effects, and derivative economic would be no economic residue [8]. Then, Baade and
effects; intangible value (cultural) effects include Matheson explored again in 14 years later, in most cases,
"Olympic Economy" impact on the intangible values, the Olympics are a money-losing proposition for hosting
such as corporate reputation, national cohesion, cities; they resulted in positive net benefits only under
traditional culture, political institutions, national very specific and unusual circumstances. However, the
reputation and status and so on. For negative effects, it main reason why these cities still desire to bid for the
mainly refers to "Siphoning Effect", "Crowding Out Games could be concluded in three ways. Firstly, even if
Effect", "Trough Effect", inflation and the loss of benefits the overall effect of holding the Games is typically
for some people, etc [5]. negative, large projects would still create winners and
398 C. Ma

losers. Secondly, economic concerns may only play a 3. PARAMETERS INFLUENCING THE
small role in a country’s decision whether or not to stage SUCCESS OF COMMERCIAL
the Olympics. Finally, it is possible to ascribe a portion OPERATIONS IN THE OLYMPIC GAMES
of the economic failings of the Olympics to the "winner’s
curse" [9]. 3.1 Commercial operation models
In addition, "Trough Effect" is a famous and common
negative impact, and is also called "Post-Olympic Effect". 3.1.1 Commercial model of initial Olympics:
Zhen argued that the hosting countries would suffer risk absolutely deficit (before 1984)
of weakness or hard landing due to different kinds of
reasons after the Olympic Games. This in turn has a The revenue generated from hosting the Olympic
trough effect. At the same time, "boost effect" is a very Games began in the Los Angeles 1984 Olympic Games,
weak positive impact caused by factors such as and all the Olympic Games held prior to that time had
investment substitution effect, consumption crowding out expenses that exceeded revenues, with only the Tokyo
effect, income outflow effect and external costs. In 1964 Olympic Games balancing revenues with expenses
addition to the 1984 Los Angeles Olympic Games and (not including indirect expenses for construction).
1972 Munich Olympic Games, in the other Olympic In 1935, Japan successfully applied for the right to
Games (a total of 13 since the 1964 Tokyo Olympic host the 1940 Olympic Games. However, due to the
Games), the economic growth of the hosting country in outbreak of war, in 1938, the Japanese government
the last eight years is lower than that in the first eight announced that it had voluntarily relinquished the right to
years, especially Greece [10]. host that Olympics. After the war, Japanese applied for
the Olympic Games again and successfully secured the
right to host the 1964 Olympics in May 1959 [11].
Revenues in millions YEN Expenditures in millions YEN
Expenditure by the Organizing Committee for the
Subsidies ¥19,690 ¥9,946
Games
National Government ¥1,551 Administration ¥2,066
Tokyo Metropolitan Government ¥1,551 Personnel expense ¥1,012
For Construction and expansion of sports
¥16,588 Others ¥1,054
facility
Donations ¥2,855 Enterprise Expenses ¥7,071
Olympic Fund Raising Association ¥2,805 Transportation ¥753
Others ¥50 Foreign affairs ¥224
Enterprise Incomes ¥3,656 Olympic villages ¥967
Ticket sales ¥1,871 Publicity ¥733
Sales of progrmmes ¥35 Admission tickets administration ¥164
Royalty incomes ¥600 Sports equipment and apparatus ¥1,180
Olympic film ¥737 Ceremonial ¥178
Payment of participanting delegations ¥372 Medical treatment services ¥39
Other enterprise income ¥41 Facilities ¥2,607
Miscellaneous Income ¥320 Expenses for supporting forces ¥170
Interest ¥35 Tokyo International Sports Week ¥56
Others ¥285 Liquidation Expenses ¥59
Balance carried forward Balance ¥750
Refund from Special Reserve ¥13 Direct expenditures for staging the Olympic Games ¥16,588
Total ¥26,534 Government Expenditures ¥5,120
Tokyo Metropolitan Government Expenditures ¥4,696
Kanagawa Prefectural Government Expenditures ¥2,879
Yokohama City Expenditures ¥389
Saitama Prefectural Government Expenditures ¥372
Excess of revenues over expenditures ¥0 Other sources ¥3,132
Total ¥26,534

Figure 1 Details of revenue sources and expenditure channels for Tokyo 1964 Olympic Games [13] (Figure credit:
original)

In order to host the Games, Japanese government and building sports stadiums and other infrastructures,
made many efforts, such as expanding the city, improving the Games were broadcasted by satellites for the first time,
the transportation system and communication system, which promoted enormous development of the Olympic
 The Secrets Behind Olympic Economy 399

Games worldwide. These large-scale infrastructures influence and a sophisticated Olympic marketing plan, it
boosted the strong developments of different kinds of was likely that the Tokyo 1964 Olympic Games would
industries in manufacturing, construction, service, have received a profitable figure.
shipping, communication, etc., which led to a sustained
3) A careful comparison of the revenue streams for
economic boom in Japan, with GNP growth rates are
this Olympics revealed many similarities to later Games,
respectively 10.1% and 26.1% before and after the
which might been one of the factors in its greater success.
Olympics, this phenomenon was called "Olympic Boom"
For example, donors paid only 10 YEN for a collectible
by Japanese and global famous economist. Tokyo
envelope, similar to the marketing model of the "Patron's
Olympics poured strong energy into Japan's fledgling
Programme" ticket for the Los Angeles 1984 Olympic
economy, which was regarded it as the engine by
Games, and the Post Office issued stamps relating to the
economists that would enable the Japanese economy to
Games, similar to the later Olympic commemorative
take off [12].
coins. This shows that the Tokyo Olympics were highly
According to relevant materials and financial data, the marketable and that the fundraising process was well
author concludes the reasons why the Tokyo 1964 planned and targeted, which is worth learning.
Olympic Games could get financial balance in the initial
development of the Olympics [14]. 3.1.2 Commercial model of reform Olympics:
1) The fact that the Games were held shortly after the miraculous turn (during 1984)
defeat in World War II, which the self-confidence of the
Traditional fund sources of the Olympic Games have
population and the social environment did not yet
three main ways: support from government, lotteries and
stabilised, and this influence was worldwide, especially
donations. Support from government is the most staple.
as Japan was one of the aggressor countries in World War
However, municipal council proclaimed "Municipal
II, all sides dictated that it would be difficult for the
Charter Amendment"-- prohibit hosting the Olympic
Games to generate huge revenues in terms of Olympic
Games using the public fund, in only one month after Los
marketing. As for Japan itself, the livelihood of the
Angeles won the right to host the Olympics. More terribly,
people and the strength of the companies also constrained
it is illegal to issue lotteries in California, and also most
the purchasing power and unpaid donations.
people resisted hosting the Olympics. Therefore,
2) A complete Olympic marketing system was only LAOOC had to find another way out. Hence, IOC was
formed after the 1984 Olympic Games in Los Angeles, forced to agree that LAOOC would raise funds for the
and the TOP programme was only officially launched in Games on a commercial basis, which is the first time that
1985, therefore there was no systematic Olympic modern Olympics made a significant adjustment on
marketing plan and the Olympic Funds Raising marketing model. At that time, the major fund source
Association did not donate all the funds raised to the shifted to sales of television rights, commercial
Tokyo Organising Committee for the Games, but only 46% sponsorship and sales of tickets.[15]
of its entire income. If it had the current Olympic

Revenues in USD Expenditures in USD

Television $286,524,000 IOC $49,696,000
Sponsorship $123,191,000 General and adminstrative $384,469,000
Internet and other $167,303,000
Payments toward construction/use of venues/facilities $97,389,000
Coin program $29,707,000
Ticket $139,834,000 Total $531,554,000
Total $746,559,000 Excess of revenues over expenditures $215,005,000

Figure 2 Details of revenue sources and expenditure channels for Los Angles 1984 Olympic Games [16] (Figure
credit: original)

Data sources: OFFICIAL REPORT OF THE GAMES OF THE XXIIIRD OLYMPIAD LOS ANGELES 1984(Data
were for the third quarter of 1984)[16]
According to relevant materials and financial data, the broadcasting revenue reached $286.764 million, which
author concludes the reasons why Los Angles 1984 proved that Ueberroth made the right decision..
Olympic Games became the first profitable Olympic
2) Subsequently, Rubenstein, one of LAOOC
Games and attained huge surpluses:
members, put forward the idea of limiting the number of
1) Firstly, the president of LAOOC, Peter V. sponsorships. Ueberroth boldly reformed the rules of
Ueberroth, broke the conventions that radio stations commercial sponsorships and raised the minimum
relayed competitions for free. He priced the broadcasting amount of sponsorships to $4 million. It began with a
right at US $75 million. In the three quarters of 1984, the battle between Coca Cola and Pepsi Cola, and finally they
400 C. Ma

signed the sponsorship contact with Coca Cola for more industries around the world as official sponsors of the
than 20 million dollars (including cash, goods, and IOC. For example, Seoul 1988 Olympic Games were held
services). Referred to this pattern, LAOOC negotiated in TOPⅠ, which received 41.8 million dollars from this
and signed with 34 sponsors and over 60 supplements in plan [18].
1983, and finally, they attained 123.191 million dollars in
sponsorship alone. 3.1.3 Commercial model of modern Olympics:
3) The other factor that promoted the success of the constant exploration (after 1984)
Los Angles 1984 Olympic Games is strengthening the
control of costs. As a result of lacking support from local 3.1.3.1 Barcelona 1992 Olympic Games: developing
government and general people, sports stadiums used in itself through the Olympics
the competition were slightly renovated based on initial
equipment, and did not have any cost in city construction. Barcelona 1992 Olympics was considered a model of
This is of course benefited from the fact that Los Angeles success. Under the circumstance of huge investment, it
is one of the most prosperous cities in the United States, not only achieved a basic balance of income and
with its own excellent equipped great environment and expenditure but also promoted a qualitative leap in
facilities. This is why the Los Angeles 1984 Olympics Barcelona's economy. This Olympics invested a lot of
spent very little on direct engineering expenditure and money in urban construction, the aim was to improve the
none on indirect engineering expenditure, which was a city's infrastructure and raise its status in Europe and the
feature of the Games [17]. world. Barcelona used 90% of the funds raised from the
Games to build the city's infrastructure, for instance,
At the end of 1984, according to statistics, the Games building a 5km beachfront, two ring roads and two
generated 215 million dollars in economic revenue, more tunnels to ease traffic congestion, as well as renovating
importantly, since then, a complete Olympic marketing the port, airport and drainage system. Compared to 1989
model was established, this is the three-tier structure of figures, it increased the new water supply and drainage
the IOC's marketing plan, the Olympic Organising system by 17%, new green spaces and beaches by 78%,
Committee's marketing plan and the National Olympic roads by 15%, artificial lakes by 15%, road facilities by
Committee's marketing plan, which was also called as 15% and artificial lakes and fountains by 268%. Hosting
TOP (The Olympic Partners). Under the guidance of the the Olympic Games brought an economic benefit of 16.6
IOC, it began in 1985 and circulated every 4 years, and billion dollars to Barcelona, boosting GDP by 2.9% [19].
selected the most prestigious companies from various
Revenues in millions ESP Expenditures in millions ESP
Sponsorship and licenses 59,686 € Facilities and preparation of surroundings 45,866 €
Television rights 54,164 € Olympic Family services and security 41,694 €
Participations and collections 46,349 € Technology 24,791 €
Accommodation and OF services 23,847 € Support stucture 22,915 €
Tickets 9,454 € Image and commercial 18,618 €
Sales of assets 2,094 € Press, radio and television 18,254 €
Total 195,594 € Competitions 14,045 €
Ceremonies and cultural events 9,063 €
Excess of revenues over expenditures 348 €
Total 195,246 €

Figure 3 Details of revenue sources and expenditure channels for Barcelona 1992 Olympic Games[20] (Figure credit:
original)

According to relevant materials and financial data, the engineering indirect expenditures for the hosting of the
author concludes the reasons why Barcelona 1992 Olympic Games had occurred in the Tokyo 1964
Olympic Games were so successful: Olympics Games and the Seoul 1988 Olympics Games.
Of course, this huge investment did greatly improve the
1) It had a unique mode that took a different approach.
post-war image of Japan and South Korea and their
Using the Olympics to help with the city development,
international status. Similarly, in 1991, the overall
and truly bringing the positive impact of the Olympics
ranking of the city of Barcelona rose to 8th in Europe,
into playing in Barcelona's own urban development, these
making Barcelona a metropolis in Europe, and indeed in
changes that Barcelona made for the city during the
the world.[17]
Olympic preparations would not be taken away, even if
the Olympics were over, enthusiasm recedes and 3) Miquel de Moragas and Miquel Botella published
investment by entrepreneurs was drastically reduced. the essay called "The Keys to the Success: The Social,
Sporting, Economic and Communication Impact of
2) There was an enhancement in unquantifiable city
Barcelona’92" in 1995, which summarized the reasons
image. A similar situation of the huge investment in
for success in 12 points, and mentioned flexible planning
 The Secrets Behind Olympic Economy 401

models and special organizational structure, making an 3.1.3.2 Beijing 2008 Olympic Games: Olympics with
overall plan at first and revising regularly later, with each all people participated in the event
edition contained the best available forecast of the set of
tasks that the committee had to face up to before the final According to a 2016 Oxford University study, Beijing
wind-up of operations and the publication of the report. 2008 Olympics were the Olympics with the least overrun,
There was no group of experts dedicated to planning tasks, at just 2% [22]. At the same time, it was one of the biggest
the preparation of the plans was carried out by an "ad Olympic Games for hundreds of years, with more than
hoc" commission—the Planning Commission, which was 70,000 volunteers, 100,000 military officers and soldiers,
made up of those with planning responsibilities for each 160,000 medical staff and millions of social volunteers
sector. In addition, choosing to use proven techniques to ensuring the success of the Olympics, achieving the
avoid testing, lengthy final preparations, repetitive or participation of all people in the Olympic Games, and the
delayed events, and any complex training process for success of the Beijing Olympics also smoothly raised
operators, and institutional cooperation and China's standing in the international arena.
comprehensive cooperation [21].
Revenues in thousands CNY Expenditures in thousands CNY
IOC Contribution ¥6,196,782 Venues ¥4,866,966
TOP Sponsorship ¥2,500,724 Workforce ¥1,398,035
National Sponsorship ¥8,461,962 Technology ¥3,758,815
Ticket Sales ¥1,282,556 Services ¥2,567,121
Licensing ¥1,359,217 Marketing & Events ¥4,101,156
Lotteries Administration & Coordination ¥2,293,439
Donations ¥94,269 Other ¥585,333
Disposal of Assets ¥254,252 Total ¥19,570,865
Subsidies
Other ¥360,556
Excess of revenues over expenditures ¥939,453
Total ¥20,510,318

Figure 4 Details of revenue sources and expenditure channels for Beijing 2008 Olympic Games [23] (Figure credit:
original)

According to relevant materials and financial data, the Games' total revenue from the development and
author concludes the reasons why Beijing 2008 Olympic application of the industry chain has reached 8.2 billion
Games attained the success [1]. YUAN.
1) They innovated in the business model. Over the
past years, there have been two business models for the
3.2 Other Factors
Olympic Games, one is a private business model, such as The reason for the loss of the early Olympic Games
Los Angeles 1984 Olympics, and the other is a was mainly due to different business models. But
government-funded model, such as Seoul 1988 Olympics, according to the financial data of the recent Olympic
however, this Olympic Games adopted a third business Games, it is known that the current business model has
model combining the two. been relatively complete, and the income channels have
2) They innovated in broadcasting rights. Previous gradually diversified, from the beginning when there
Olympic Games broadcast rights were usually television were only tickets and broadcasting rights, to the present
and broadcast, Beijing Olympics for the first time sold when many new items have been opened up, such as
the TV rights and the new media rights separately, which franchises, souvenirs and so on. Even with a well-
not only promoted the development of the new media established business model and the current stage of
industry, but also made the revenue of the Olympic mature network distribution, losses often occur, which
Games grow rapidly. According to the survey (China may be related to the social environment and the degree
Internet Network Information Center), the Internet of economic development of different countries.
surpassed CCTV to become the main communication 1) According to the three successful cases mentioned
channel for the Beijing 2008 Olympic Games. above, it can be found that they all have one thing in
3) They innovated in peripheral products. Another common - the support of the people. Despite the boycott
difference from previous Olympic Games is that the of the Los Angeles Olympics in 1984 which prevented
Games had five mascots, which had a great advantage for the Los Angeles Olympic Committee from obtaining
the combination of mascot sales, and also for the funds from the government, the subsequent change in
extension of the mascot industry chain. According to people’s attitude and enthusiasm for the Games led to a
statistics, the Olympic mascots of the Beijing Olympic huge sale of tickets and some of the successful auction of
402 C. Ma

the facilities left over from the Games, which far 4.1 Before the Olympics: strengthening
exceeded Ueberroth's original budget. Miquel de economic accounting, and strictly controlling
Moragas and Miquel Botella also mentioned that expenditure, achieving "broaden sources of
Barcelona had 102,000 people who volunteered and its income and reducing expenditure"
advantage in human resources made Barcelona stood out
from others of the bidding cities and made it a success, According to a study by Oxford University in 2016, it
similar to the Beijing Games [20]. can be concluded that budget overruns occur in every
2) The epidemic called COVID-19 was popular in Olympic Games, with an average overrun of over 170%
China at the end of 2019 and spread globally in 2020, per Games. Meanwhile, it can also be concluded that a
which led the Tokyo 2020 Olympic games to postpone to country that overspends more will lose more money. The
2021. Such a postponement increased Tokyo's huge budget is usually prepared eight years before the Games
equipment maintenance costs and lost ticket sales and is reflected in the bidding documents. However, there
channels. therefore, this Olympic Game has not only been are unpredictable and inevitable events during the actual
labeled as "the most expensive Olympic Games in competition, so fluctuations within a certain range are
history", but also its overrun is most serious in the past normal, but it is crucial to keep the overspending ratio
two decades, with over-expenditure exceeding 200% and within reasonable limits. Therefore, the committee can
lost nearly 640.8 billion YEN. Even though Japan had set up an independent financial control agency to
successful experience about how to hold the Olympic supervise and track the implementation of the Olympic
Games, social environment changes and explosion of budget throughout the whole process, so as to provide a
new cases of COVID-19 made Japan difficult to cope guarantee for the management of the Olympic
with it. For instance, over 3000 people were diagnosed on Organizing Committee and local public departments [24].
28 July alone, it meant that Japanese government would In addition, reducing project expenditure is another
have to spend more money on health care to stop the effective means. The Los Angeles Olympic Games and
disease from the wanton spreading of the epidemic. the Montreal Olympic Games are diametrically opposite
3) For developed countries like Britain and the United on this point, because Montreal has produced huge waste
States, the degree of economic development had reached in the stadium construction, which has caused huge losses
a state of saturation and the economic growth rate is in a to the local government and residents. The cost of the
state of relatively flat, even the Olympic Games or other Olympic Games will be greatly reduced by not building
large-scale sports events can hardly bring obvious new facilities unless necessary, and by renovating and
economic breakthroughs, so compared with other expanding existing facilities.
countries, the positive economic impact brought by the
effect is weak [9]. 4.2 During the Olympic Games: Making the
most use of mass media to develop the market
4. CONCLUSION
Before and after the Opening of the Olympic Games,
This paper examines the causes of profit or loss of the main revenue is generated through marketing
part of the Olympic Games mainly based on the income development. The speed of dissemination today is
and expenditure of selected Olympic Games, it is beyond people's imagination after decades of
secondarily supplemented by other factors such as public development in the news media industry. People need the
sentiment, social environment and national economic media as a vehicle to understand the Games, the media
development. The results show that with the rapid also needs the Olympic Games as a highlight to attract
economic development of various countries and the the attention of the public. Compared with the past, the
gradual improvement of the Olympic marketing system, profit brought by the Olympic Games to the news media
it is very possible to obtain profits from hosting the industry is multiply increased and will be more and more
Olympic Games. However, it is difficult to avoid the in the future. So both the media industry and the Olympic
interference from other factors, such as policy changes, Committee should seize this opportunity. [25]
people's resistance, and COVID-19 that the recent The hosting country uses the media to expand its own
Olympic Games will be affected, all of them are the influence, and through mass media, everyone has a sense
reasons for the loss or not optimal of the Olympic Games. of participation so as to realize "everyone pays attention
Due to the difficulty in collecting the initial financial to the Olympic Games, and the Olympic Games benefit
data of the Olympic Games and the fact that some everyone", in order to attract more enterprises to obtain
financial data of the Olympic Games had not been sponsorship from advertisers. Of course, it also needs to
published, hence the data of this paper is not very control over-commercialized means and methods used to
complete and the results of this paper may be one-sided. prevent commercial activities from reducing or
However, based on the current research results, the weakening the Olympic spirit and repeating the mistakes
following suggestions can be made: of the Atlanta Olympics. In addition, the positive growth
will also be reflected in ticket revenue and peripheral
 The Secrets Behind Olympic Economy 403

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