• International Insurance Blog

  • Saturday, October 21, 2017

The Olympic Games are an international event of summer and winter sports, in which thousands of athletes compete in a wide variety of events. Originally, the ancient Olympic Games were held in Olympia, Greece, from the 8th century BC to the 5th century AD. In the late 19th century, Baron Pierre de Coubertin founded the International Olympic Committee (IOC) in 1894, and two years later, the modern Olympic Games were established in Athens. The evolution of the Olympic Movement during the 20th century forced the IOC to accommodate the Games to the varying economical, political, and technological realities of the 20th century.

During the first half of the 20th century the IOC was run on a small budget. As president of the IOC from 1952 to 1972, Avery Brundage rejected all attempts to link the Olympics with commercial interest. When Brundage retired the IOC had US$2 million in assets; eight years later the IOC coffers had swelled to US$45 million. This was primarily due to a shift in ideology toward expansion of the Games through corporate sponsorship and the sale of television rights.

Over the year IOC has certainly benefitted, but what about the hosting nations. It is arguable if the economy of a host country benefits from Olympics. In a study from the 2000 Sydney Olympics, John Irons from Argmax, concluded that, host country economies tend to grow faster than normal before and during the Olympics. The best years tend to be three and four years the games start, with growth over 1 per cent above average, but they will then experience up to 0.8 per cent less growth on average over the next eight years. Once the Olympics moves on, the debts are left to pay and there may have been little direct financial benefit from the games themselves, were the results of the study. Let us see what Britain has to say after it hosts the Summer Olympics in 2012.

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