On this page, we look at the London Olympics of 2012 as a case study of the costs and benefits for one country hosting an international sports event.
Why was London chosen?
London competed with other cities to host the 2012 Olympics. It was chosen from nine cities, with five shortlisted to make formal bids (Paris, Madrid, Moscow, London, and New York). London won the final round, beating Paris by 54 votes to 50.
It seems likely that there was a political influence in the decision – such as the French president insulting the Finnish delegation by complaining about the quality of Finnish food. However, the criteria of the IOC included government support and public opinion, city infrastructure (such as transport), sports venues and experience, olympic village and accommodation, environmental impact and legacy, safety and security, and finance. The following factors were partly responsible for the success of the bid:
- Youth engagement in sport was one of the pillars of London’s bit
- Sustainability and ‘legacy’ were pillars of London’s bid
- Regeneration was emphasised as part of the bid: the IOC was shown photos of the derelict former industrial areas
- The UK government had decided to focus its Olympic bids on London after failing to win the Games in 1992, 1996 and 2000 with bids from Birmingham and Manchester (two other major UK cities)
- Gender and age issues: most of those who spoke in the Paris presentation were male and middle aged; the London presentation included children and represented a multicultural London
- Financial: the British government was ready to back any over-spend on the construction of Games facilities. The initial estimate of GBP2.2bn was totally wrong and the games eventually cost around GBP10bn!
A further issue was the very local focus of London’s bid. Rather than being simply shown as a city- or country-wide bid, it suggested that the Olympics would have a lasting tangible impact on a deprived area of London, called Stratford.
The choice of Stratford in London
The area chosen for the main Olympic facilities was a relatively deprived part of London:
Population density (per hectare)
Good education (5 GCSEs at A*-C)
GCSEs are a qualification gained at age 16.
Family income in GBP per year
Unemployment rate (%)
The area was therefore identifiably in need of regeneration and expected to benefit from improvements to infrastructure that would mean:
- Location of main venue just seven minutes by train from Central London
- London’s bid was one of the most compact Olympic Parks – only about 2 ½ square kilometres, so minimal impact on land use in the area
- Sizeable available brownfield sites for redevelopment, as well as the green spaces of the Lower Lea Valley, so there would be opportunity for further growth
- Development of a major transport hub in the form of Stratford International Station
- The athlete’s village was planned to be converted into 2818 new homes, of which about 40% would be ‘affordable’ homes for low and middle income families and disabled people
- Emphasis on urban regeneration: the swimming pools were planned for conversion into public pools after the Games
- Suitable location for further post-Games industry e.g. the media centre, where 20,000 people worked during the Games, was planned for conversion into one of Europe’s largest data storage centres
The costs and benefits of hosting the Games
Whether the Games were cost-effective depends very much on the perspective of the individual. Socially there were many benefits (see below) but these were not always long-lived, and participation in sport has now returned to pre-2012 levels. Economically, the Games occurred during the recovery from the global financial crisis of 2008-10, and many people felt that the approximate cost of GBP10bn to be too high, despite the lasting benefits to the environment and the future of the economy. Over the total period of the Olympics, some sources suggest “the city brought in around US$3.5 billion in revenues, and spent in excess US$18 billion – a negative balance of $14 billion plus” (Zimbalist, 2015).
However, many people feel that the London Games were overall a success, and provided a benefit to the city. It should be remembered that London is already the world’s second most globalised city (Dessibourg, Hales, and Mendoza Peña, 2017) and has been in that position since the index began in 2008. London has great wealth and experience in putting on large events and is used to welcoming visitors from around the world, so it was organisationally capable of running the Olympics. Other cities have fared less well with the legacy of such complex and expensive events.
- Eventual cost nearly £10 billion paid for by lottery fund so other things lose out e.g. arts
- Massive construction scheme lasting years disrupts local communities
- Better image for London and East End
- New sports venues around London and elsewhere e.g. sailing in Weymouth
- The UK government invested GBP 300 million to transform the Olympic site into the “Queen Elizabeth Olympic Park”, which includes housing, new schools, health centres, business space and sports venues.
- The first Join In weekend (encouraging volunteerism as the profile was increased from volunteers at the Olympics), in August 2012, featured over 6,000 events.
- 9000 new homes in total
- The Olympic Village was converted into more than 2,800 flats in 11 residential plots, with spacious courtyards, gardens and balconies.
- Five new neighbourhoods are being established around the park to include 11,000 residences, one third of which will be affordable housing
- The London Olympic Athletes’ Village is the largest sustainable homes project in the UK.
Education and sports participation
- A new youth sport strategy for the UK invested GBP1bn in youth sport over the five years following the Games and created 6,000 new community sports clubs.
- The Department of Education provided GBP 65 million to encourage efforts by physical education teachers to organise competitive sports, embed best practice and train primary school teachers.
- The official London 2012 education programme “Get Set” operated over a four-year period across the UK providing flexible teaching resources for over 25,000 schools and 6.5 million young people to assist them in learning more about the London 2012 Games, the Olympic and Paralympic values and global citizenship. An impressive 85 per cent of UK schools signed up to this programme
- The Olympic and Paralympic Games inspired over 2,000 community projects designed to educate young people in the UK about sport, health & fitness, art and Olympic values.
Environmental and general infrastructure
- Some people lost homes, allotments, and areas for fishing
- Olympic Park ‘largest [new] urban park in Europe for 150 years’ (ODA, 2015)
- Prior to construction, the Olympic Delivery Authority (ODA, 2015) excavated and cleaned more than 2.3 million cubic metres of contaminated soil.
- Transport for London invested GBP 6.5 billion in transport infrastructure in preparation for the 2012 Games.
- Ten railway lines and 30 new bridges continue to connect London communities after the Games.
- The UK’s Home Office (the ministry of the interior) invested GBP 40 million in communications upgrades for London’s Underground, doubling radio capacity at key stations to help authorities deal with any emergency.
- At least 60 Games-related projects promoted greener travel, including a GBP 10 million investment to upgrade pedestrian and cycling routes across London.
- A fleet of 200 electric vehicles transported Olympians, supported by 120 charging stations that created the UK’s largest network of recharging points. The charging stations continue to support emission-free travel long after the Games
- More than 98 percent of the demolition waste from decrepit buildings that were torn down was recycled.
- Organisers helped develop 45 hectares of habitat, with a 10-year ecological management plan to encourage biodiversity.
- 300,000 plants were planted in the Olympic Park’s wetland area.
- Over 1,000 new trees were planted in East London.
- 380 businesses relocated away from park to make way for Olympics
- Cost of living in the area for poorer people will increase
- 3000 new jobs (ODA, 2015)
- Factoring in pre-Games construction and other early Games-related economic activity, an Oxford Economics study commissioned by the Lloyds banking group estimates that the Games will generate GBP 16.5 billion for the British economy from 2005 to 2017.
- During July and August 2012, visitors spent about GBP 760 million in the UK, averaging GBP 1,290 per person – almost double the normal amount.
- Expenditure from overseas visitors in August, including Games ticket sales, totalled GBP 4.5 billion
- 75 pence of every pound spent on the Olympics went towards providing a lasting legacy to East London residents.
- Independent experts said Games preparations were a major factor behind a 1.2 percent reduction in London’s unemployment rate in early 2012.
- More than 46,000 people worked on the Olympic Park and Olympic Village, 10 percent of whom were previously unemployed.
- The five Host Boroughs surrounding the Olympic Park provided nearly a quarter of the workforce throughout the project. For example, the Host Borough of Newham had 4,364 residents employed by LOCOG or by their contractors and a further 5,518 employed indirectly on the Games in the lead-up and at Games time.
- The (new) Westfield Stratford shopping centre houses 250 retailers, 70 dining establishments and represents a GBP 1.4 billion investment in East London.
- The Westfield Stratford shopping centre created 10,000 permanent new jobs from day one, including 2,000 for local people who were previously unemployed.
Anonymous, no date. Why was London chosen to host the 2012 Olympiad? https://www.rgs.org/NR/rdonlyres/1E506FE2-3179-439C-81F2-B43D0B97D058/0/CGT_NetRaising_8Olympicpresentation.pdf Accessed 17 January 2018.
Dessibourg, Hales, and Mendoza Peña, 2017. Global Cities 2017. https://www.atkearney.com/global-cities/full-report Accessed 17 January 2018.
Dugan, E. 2013. Olympics legacy: Did the Games succeed in rejuvenating East London? http://www.independent.co.uk/sport/olympics/olympics-legacy-did-the-games-succeed-in-rejuvenating-east-london-8711691.html Accessed 17 January 2018.
ODA [Olympic Delivery Authority], 2015. Olympic Delivery Authority 2006-2014 – final report. https://www.gov.uk/government/publications/olympic-delivery-authority-report Accessed 17 January 2018.
Stevens, A. 2008. 2012 London Olympics to regenerate one of the poorest areas of the capital http://www.citymayors.com/sport/2012-olympics-london.html Accessed 17 January 2018.
Wihbey, J. 2016. Olympics and their economic impact: Updated research roundup. https://journalistsresource.org/studies/government/infrastructure-government/economic-and-cultural-benefits-of-the-olympics-research-roundup Accessed 17 January 2018.
Zimbalist, 2018. The Illusory Economic Gains from Hosting the Olympics World Cup. In World Economics, 16, issue 1, p. 35-42, https://EconPapers.repec.org/RePEc:wej:wldecn:606. Accessed 17 January 2018.
Case study: London Olympics 2012: Learning activities
- Outline the political, social, economic and environmental reasons why London was chosen for the 2012 Games. 
- Suggest reasons why some people feel that the Games were not an appropriate way to spend the money. 
- Suggest why some people feel that the Games provided a tangible legacy. 
- Create a spider diagram showing at least three social impacts, three economic impacts and three environmental impacts of the Games.
- Do you consider that the Games were a sustainable event? Explain your answer. 
- Overall, do you think that the Games were a success? Why? 
Imagine that you live in the area that is going to be transformed by the Games. Write a letter to the International Olympic Committee explaining why you do or don’t want the Games to come to London. Remember to attempt a counter-argument and rebuttal, and that this is a formal letter so you should be using formal ‘business’ language.
This site has a great number of additional sources that you could explore, for example if you are looking at the Olympics for the purposes of an extended essay. Page 11 is especially good.
Look at these sites for more in-depth information.
And even further:
- http://www.olympic.org/Documents/Reference_documents_Factsheets/London_2012_Facts_and_Figures-eng.pdf Interesting facts in general.
- http://www.ons.gov.uk/ons/dcp171778_282767.pdf Visitors impact – especially useful on p8
- http://www.ons.gov.uk/ons/rel/ott/overseas-travel-and-tourism—monthly-release/august-2012/index.html Also pretty strong, same basic source as above but with other links that might be useful.