By Matt Burdett, 12 December 2017 [updated 19 January 2018]
On this page, we look at the Olympics held in Rio de Janeiro in 2016 as a case study of the costs and benefits for one country hosting an international sports event.
Welcome to Rio de Janeiro
- Rio de Janeiro, Brazil: Famous for mountains, beaches, and now the Olympics too.
Rio de Janeiro – often shortened to ‘Rio’ – is the second largest city in Brazil after Sao Paulo. It was the capital city until 1960 when the government was transferred to the newly built inland city of Brasilia.
Rio was chosen to hold the 2016 Summer Olympics by the International Olympic Committee in 2009 after a two year bidding process. Rio beat Tokyo, Chicago and Madrid in the final stage of voting. It was the fourth attempt by Rio to host the Olympics after it failed to win the bidding for the Olympics in 1936, 2004 and 2012.
Rio’s plan and the expected impacts
Brazil, at the time of bidding in 2009, had the world’s tenth largest economy. Their bid planned for a balanced budget, meaning that the Games would cost and earn the same amount of money. The value for both revenue and expenditure was predicted to be US$2.82bn. About 25% of this money was to come from the government, with the rest coming from sponsorship, tickets and other avenues (IOC Evaluation Commission, 2009).
Rio’s bid included a strong focus on the sustainable urban legacy of the Games. It referenced the existing US$240bn Federal Plan for Growth Acceleration which included a heavy emphasis on improving infrastructure, including major transport improvements. Four specific areas were to be improved:
- Barra – a coastal district to the west of the main city where the main Olympic park and village would be built
- Copacabana – a famous beach where some outdoor events would be held
- Maracana – a densely populated central district which would be rebuilt to house the main athletics stadium
- Deodoro – a relatively poor district in central Rio which would host some new venues giving a social boost
Economic and organisational support was also strong. Rio had already hosted the 2007 Pan-American Games, demonstrating its ability to host major events. Furthermore, three levels of government (local, state and federal) guaranteed to pay for the necessary infrastructure that would be built, so there was effectively no chance that the Games would not go ahead because the organisers ran out of money.
Politically, the bid included clear reference to the Games as a way of receiving international recognition. They stated that “the Brazilian authorities believe that Rio de Janeiro’s bid is a “self affirmation” of the Brazilian people and consider it a point of honour to bring the Games to the country and to South America” (IOC Evaluation Commission, 2009).
The Games in 2016
In a sporting sense, the Rio games were considered a success by many. All the events took place as scheduled, and all venues were finished on time. The media was successfully able to relay information back to their home countries using high speed internet connections, and transport functioned well.
However, Rio came under some criticism for some other issues. The Brazilian economy was in its third consecutive year of recession (in which the economy shrinks, leaving less money available for projects such as the Olympics) (Wieczner, 2016). Some venues were only just finished in time, there were media reports of inadequate facilities, the zika virus was in the news globally, some athletes experienced crime including robbery, some dormitories for athletes were considered to be unacceptable (e.g. the Australian team went to stay in hotels while repairs were undertaken), and water sports that occurred on the open water struggled through polluted seas (Ward-Henniger, 2016).
These problems meant that the effect on Rio’s reputation was not entirely positive. While cities such as London (2012), Sydney (2000) and Barcelona (1992) had successfully improved their international images by hosting safe and efficient games where the sports were the main story, Rio did not successfully capitalise on its image as a playground for tourists to enjoy themselves. The expected positive impact of promoting the city as a place for tourism and international business did not materialise.
The legacy of the Games
The legacy of the Games cannot be fully evaluated because the event is relatively recent at the time of writing (January 2018). However, some impacts are already clear.
The Games were projected to cost less than US$3 billion. However, Brazil’s Public Authority for Olympic Legacy stated a year after the event that the total cost had been around US#5 billion. But this amount did not include government spending that was not on the specific Olympic venues or running the games. When other costs are included – such as a new subway line, a doping laboratory, and cleanup of polluted Guanabara Bay – the total figure could be up to $US13.1 billion (AP, 2017).
Transport infrastructure was definitely improved by the Games. Rio is a mountainous city that occupies a narrow strip of flat land along the coast. Chronic under investment for decades meant that serious traffic congestion in Rio hindered the economy. The Olympics spurred on the development of Bus Rapid Transit (BRT), metro and Light Vehicle Rail systems, including 125km of BRT-only roads, 440 new BRT buses, and a new subway line of 16km length (Olympic News, 2017).
Many of the Olympic sites struggled to attract operational funding after the Games, meaning that they did not have enough income (from events, or from the government) to stay open. The Maracanã Stadium was abandoned after six months because of a dispute over who owed US$1 million in unpaid bills, while swimming pools have been dried out and put out of use (Farber, 2017). These are, however, relatively short term issues and are really a problem caused not by the Olympics but by a long economic slump. Similar problems occurred in Athens after the 2004 Olympics because the economy was not strong enough to create demand for events in such large spaces.
Even so, there is a question over whether all but the richest countries can create enough demand to utilise the massive and many venues that the Olympics requires. Los Angeles, in 1984, avoided this problem by adapting existing infrastructure and didn’t build any major new stadium for the Olympics. London, in 2012, avoided the problems of over-capacity in the Olympic Stadium by ensuring that the number of seats could be reduced, and the stadium used as the home ground of a football club (West Ham United).
Some areas, such as Porto Maravilha, have become popular places for visitors and locals to spend time, with artistic and environmental projects (Duignan and Ivanescu, 2017). However, this has also become a magnet for gentrification, potentially putting up property prices and forcing out people who have lower incomes. Furthermore, as part of the drive to redevelop areas for the Olympics, some estimates suggest that around 77,000 people were evicted from their homes (Mantelli et al, 2015), destroying communities in the process. These were mainly people living in favelas (slums and squatter settlements) in conditions of poverty.
AP, 2017. AP Analysis: Rio de Janeiro Olympics cost $13.1 billion https://www.usatoday.com/story/sports/olympics/2017/06/14/ap-analysis-rio-de-janeiro-olympics-cost-13-1-billion/102860310/ Accessed 12 December 2017.
Duignan and Ivanescu, 2017. Six months on, what did Rio de Janeiro gain from hosting the Olympics? https://www.citymetric.com/fabric/six-months-what-did-rio-de-janeiro-gain-hosting-olympics-2824 Accessed 12 December 2017.
Farber, 2017. Here Are What Venues for the Rio Olympics Look Like Now. http://time.com/4672303/rio-olympics-venues-pictures/ Accessed 19 January 2018.
IOC Evaluation Commission [(the Commission) for the Games of the XXXI Olympiad in 2016], 2009. Report Of The 2016 IOC Evaluation Commission. https://stillmed.olympic.org/media/Document%20Library/OlympicOrg/Documents/Host-City-Elections/XXXI-Olympiad-2016/Report-of-the-IOC-Evaluation-Commission-for-the-Games-of-the-XXXI-Olympiad-in-2016.pdf Accessed 12 December 2017.
Mantelli et al, 2015. Mega-Events and Human Rights Violations in Rio de Janeiro Dossier. World Cup and Olympics Popular Committee of Rio de Janeiro. Rio 2016 Olympics: the Exclusion Games. http://www.childrenwin.org/wp-content/uploads/2015/12/DossieComiteRio2015_ENG_web_ok_low.pdf Accessed 19 January 2018.
Olympic News, 2017. Olympic games transport rio to a new level. https://www.olympic.org/news/olympic-games-transport-rio-to-a-new-level. Accessed 19 January 2018.
Ward-Henniger, 2016. Here’s a list of all the issues surrounding the 2016 Rio Olympics. https://www.cbssports.com/olympics/news/heres-a-list-of-all-the-issues-surrounding-the-2016-rio-olympics/ Accessed 12 December 2017.
Wieczner, 2016. The Olympics Could Mark Brazil’s Economy Hitting Bottom. http://fortune.com/2016/08/12/olympics-brazil-economy-rio-recession/ Accessed 17 January 2017.
Case study of Rio Olympics 2016: Learning activities
- What were the other cities that competed against Rio for the 2016 Olympics? 
- How long was the bidding process? 
- What was the predicted cost of the Games? 
- Outline the tangible and intangible benefits that Rio expected to gain from the Olympics. 
- Explain why Rio attracted criticism from some people at the time of the Games. 
- Suggest reasons why the cost of the Olympics overran its original estimate. 
- Evaluate the impact that the Games had on the infrastructure of Rio. 
- Suggest reasons why some favela dwellers are critical of the government’s decision to host the Olympics. 
Imagine that you work 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 Rio. Remember to attempt a counter-argument and rebuttal, and that this is a formal letter so you should be using formal ‘business’ language.