The Paris Olympics, featuring approximately 10,500 athletes from 200 countries or regions, are more than just a celebration of sportsmanship. They are a significant financial enterprise generating billions of dollars for the International Olympic Committee (IOC). Beyond the sporting spectacle, the Olympics serve as a platform for geopolitical influence, evident in the medal standings, the presence of world leaders at the opening ceremony, and the national anthems accompanying gold medal wins.
The IOC, a non-profit, non-governmental organization headquartered in Lausanne, Switzerland, generates a substantial portion of its revenue from selling broadcast rights (61%) and sponsorships (30%). For the four-year cycle ending with the Tokyo Olympics in 2021, the IOC recorded an income of $7.6 billion. While the IOC claims to return 90% of its income to sports, athletes directly receive only a small share, although there may be efforts to rectify this. In 2019, the IOC inaugurated a new headquarters at a reported cost of around $200 million.
Host nations shoulder the majority of the financial burden for staging the Olympics. The Tokyo Games, officially listed at $13 billion, saw more than half of the costs covered by Japanese government entities. Despite the official figures, a Japanese government audit suggested that the actual costs might have been twice as high. The IOC comprises approximately 100 members who elect their colleagues, with Princess Nora of Liechtenstein holding the distinction of the longest-serving member. While a handful of other royals are also members, the majority of the power resides with President Thomas Bach, a German lawyer who also serves as a member, and his executive board.
Technically volunteers, IOC members receive significant benefits. The IOC covers all of Bach’s expenses, which amounted to $370,000 in 2022, including an annual “indemnity” of 275,000 euros and his tax liabilities in Switzerland. IOC members receive per diems ranging from $450 to $900 for attending meetings, along with first-class travel and five-star accommodations.
The IOC and local organizers rely on unpaid volunteers to help manage the Games. Volunteers typically receive uniforms, meals during work hours, and some transportation costs, but lodging is rarely included. While Paris seeks 45,000 volunteers, Tokyo initially targeted 80,000. However, the volunteer system has faced criticism, particularly in cities with significant poverty. The 2016 Rio de Janeiro Olympics struggled to recruit volunteers, as many couldn’t afford to work for free. Some volunteers collected their uniforms on the first day and never returned. Paying volunteers a minimum wage of $10 per hour could potentially add $100 million to the cost of the Games. In Paris, some volunteers have threatened to boycott the Games to protest Olympic spending and French pension reforms.
The IOC asserts that the Olympics transcend politics, but reality tells a different story. The IOC’s observer status at the United Nations underscores its self-proclaimed global role. Political scientist Jules Boykoff points out in his book “What Are The Olympics For” that the opening ceremony parade, where athletes march by country, reinforces nationalist sentiment, a key driver of the Games’ popularity. This contradicts the possibility of athletes marching by sport, which would de-emphasize the nationalist element. History has seen how the Olympics have been used for political purposes. Adolf Hitler utilized the 1936 Berlin Olympics to promote his agenda, and the torch relay traces its origins back to Berlin.
The IOC’s approach to selecting host cities has undergone significant changes. Previously, the Games were awarded seven years in advance. However, in 2015, the IOC faced only two unlikely candidates for the 2022 Winter Olympics: Beijing and Almaty, Kazakhstan, with Beijing ultimately winning the bid. Numerous European countries, including Sweden, Germany, and Switzerland, withdrew due to the high costs associated with hosting the Games. To address this, the IOC revamped the bidding system. In 2017, only Paris and Los Angeles competed for the 2024 Summer Games, resulting in Paris being awarded the Games and Los Angeles securing the 2028 Games. In 2021, Brisbane, Australia, was awarded the 2032 Games – a full 11 years in advance – largely due to the influence of IOC member John Coates.
Research by Victor Matheson and Robert Baade, two American college professors, concluded that “in most cases the Olympics are a money-losing proposition for host cities.” Their study, published in the Journal of Economic Perspectives in 2016, highlighted the significant costs associated with the Games, which can potentially displace other priorities such as schools and hospitals. While IOC officials argue that recent changes to the bid system will address these concerns, the financial burden remains a significant factor.
Scandals and corruption have been a recurring theme in the history of the Olympics, perhaps due to the involvement of vast public funds and tight deadlines. The recent Tokyo Games were embroiled in a bribery scandal involving contracts, sponsorships, and the bid itself. The 2016 Rio de Janeiro Olympics faced financial difficulties at their opening, leading to the arrest of then-IOC member Carlos Nuzman, who headed the Games, on corruption charges shortly after the Games concluded. The 2014 Winter Games in Sochi, Russia, were marred by a state-sponsored doping scandal and cover-up. Corruption in the bidding process for the 2002 Salt Lake Winter Games triggered ethics reforms, and organizers of the 1998 Nagano Winter Olympics in Japan allegedly destroyed incriminating financial records showing lavish spending on entertainment for IOC members.
