The Dollars and Cents of the Olympic Games
Last week, China won the first gold medal of the Beijing Games with a victory in the mixed short track speedskating relay, beating the Italian team by half a skate blade. The U.S. women’s hockey team outscored Finland, Russia and Switzerland, and a 21-year-old Swede took home gold in men’s moguls.
In many countries, athletes who take home a medal in the winter Olympics receive financial bonuses and other rewards, reported The Economist and Brett Knight of Forbes. For example,
Hong Kong promises a $642,000 bonus for a gold medal. (It hasn’t won one yet.)
Turkey will reward a gold medalist with $380,000. (It also has yet to win gold.)
In Italy, a gold medal is worth a bonus of $214,000.
Spaniards who take home the gold receive $112,000.
German Olympic medalists were rewarded with a lifetime supply of free beer in the 2016 games.
South Korean medalists are rewarded with an exemption from national military service.
Slovakians who win individual gold medals receive $56,000, while those who compete on teams receive $17,000 each.
U.S. athletes receive $37,500 for a gold medal, $22,500 for silver, and $15,000 for bronze. (U.S. athletes also receive financial support through training grants, healthcare benefits and endorsements.)
The rewards for Olympic medal winners are reasonably clear. However, the rewards for cities that host Olympic games are less so. James McBride and Melissa Manno of the Council on Foreign Relations reported:
“A growing number of economists argue that the benefits of hosting the games are at best exaggerated and at worst nonexistent, leaving many host countries with large debts and maintenance liabilities. Instead, many argue, Olympic committees should reform the bidding and selection process to incentivize realistic budget planning, increase transparency, and promote sustainable investments that serve the public interest.”
Before the Tokyo Olympics, the event cost was estimated at $7 billion. Recent estimates of the actual cost are around $28 billion.
That’s a significant cost overrun.