06/28/2024 – 10:20
France is facing a bill of almost 9 billion euros (53 billion reais at current prices) to host the Paris Olympic Games, but senior officials consider that the financial repercussions could be more “psychological” than economic.
Less than a month before the Games’ opening ceremony on July 26, ministers and financial analysts are juggling numbers to calculate the costs and profits of the sporting spectacle.
So far, French authorities have forecast a cost of nearly 9 billion euros for the Games, although the final figure will take some time to be confirmed.
Costs are always hard to predict or confirm. The Tokyo Olympics, delayed by a year to 2021 due to Covid-19, cost an estimated $12.9 billion (R$71 billion), according to Japanese auditors.
The Greek Ministry of Finance estimates that Athens-2004 cost 9.1 billion dollars (50 billion reais), although some independent estimates put the bill at almost 15 billion (82 billion reais), the same cost as London-2012.
– 9.5 billion dollars –
The Olympic Games Organizing Committee (COJO), driven by ticket sales, sponsors and funding from the International Olympic Committee (IOC), has a budget of around 4.4 billion euros (25 billion reais).
The public company Solideo, which built the Olympic Village north of Paris, has a similar budget.
But the final bill will also depend on spending on Olympic bonuses for subway drivers, police and emergency services, as well as the overall cost of security.
This week, the government allocated another 33 million euros (195 million reais) to the organizers of the Paralympic Games, which are facing difficulties with ticket sales.
So far, the government and local authorities have earmarked around 2.4 billion euros (14.2 billion reais) for the Games, mainly for building infrastructure.
But the first president of the French Court of Auditors estimated that the final cost to public coffers could be double that amount.
Bruno Cavalier, chief economist at financial services group Oddo BHF, said “direct state involvement is relatively limited” and that the Games will not “radically change” France’s public debt, which is around $3. 2 trillion (17.7 trillion reais).
– “Psychological” impact –
According to the Center for Sports Law and Economics (CDES), which monitored the Games for the IOC and COJO, the event will produce between 6.7 and 11.1 billion euros – between 40 and 65 billion reais – in economic benefits for the Paris region.
However, it specifies that these benefits will be spread over 20 years.
In February, consultancy firm Asteres estimated that the Olympics would bring in 5.3 billion euros (31 billion reais) in additional tax and social revenue.
Deutsche Bank said in a study this month that “countries hosting the Olympic Games or the FIFA World Cup rarely obtain a positive economic or even social return from what are often massive publicly financed investments in new stadiums. and public infrastructure.”
The bank also estimates that the short-term boost to investment and employment is “limited” unless the host country is in recession.
For the governor of the Bank of France, François Villeroy de Galhau, Paris-2024 will have a more “psychological” impact than an economic one.
But he said that if France can improve its image in the world thanks to the Games, it can expect new investment.
– “This created jobs” –
In the short term, some companies are already trying to make a profit.
Underwear maker Le Slip Français is producing thousands of briefs, swimsuits, pajamas and other items in Olympic colors, according to its general manager, Lea Marie.
“This has created jobs in our factories” and for the company’s 80 subcontractors, she said.
Companies involved in Olympic construction also benefited.
According to CDES, construction and renovation companies expect to increase their revenues by up to 3 billion euros (17.7 billion reais) because of the Games.
Tourism is estimated to earn up to 3.6 billion euros (21.2 billion reais) with the 15 million visitors expected for the Olympics, two million of them coming from abroad.
Oddo BHF predicted that companies in media, entertainment, drinks and alcohol, consumer goods and transport will benefit from the global event.
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