Olympics Money: About as Profitable as a Restaurant

Olympics money of $12 billion in 2016 will come in large part from Brazil’s tax base. An Olympics can make a profit but mostly they’re a big loss. Not only do most countries lose money on the Olympics, but most athletes make very little and even wind up in the red. A very few Cinderella stories like Michael Phelps or Ryan Lochte may make the Olympics seem like a dream come true, but for most it’s just business as usual. That said, the Olympics gives people hope and inspiration and can give a country an economic boost in terms of tourism, investment, aid and other income sources. From the fiscal evidence below, it looks like most countries see the Olympics more as advertising and goodwill than a money making proposition. In recent years the trend has been to ignore profit and spend as much on the Olympics as possible.

Olympics Money

The chart above shows that most extra money spent on the Olympics is lost. The blue-green line in the middle shows the growth of Olympic revenue. That growth is outstripped by spending and losses. The data is a bit misleading, since “Olympic” spending in many countries includes needed improvements to infrastructure.

Olympics Money Facts

For the top Olympics money facts check out the table below. For the nitty-gritty data, see the sections below the table.

Olympics Money Facts
Do the Olympics make money?Depends heavily on the country and the year. See the tables below for the Olympic money breakdown.
Most profitable Olympics ever1988 Seoul Summer Olympics, $300 million profit
Biggest money-losing Olympics ever2004 Athens Summer Olympics, $7 billion loss
Average cost of Olympics$3.8 billion
Average Olympic money result$600 million loss
Projected cost of 2016 Rio Olympics$12 billion
Projected profit/loss of 2016 Rio Olympics$4 billion loss, paid for by Brazil tax money
Which costs more money, summer or winter Olympics?Winter
What are the sources of Olympic money, in order?Broadcasting, host country tax money, ticket sales, money from other countries, licensing (see below)
Broadcasting revenue expected for 2016 Olympics$4 billion
Do Olympic athletes make money?Depends heavily on what country they're from.

Olympics Cost vs Profit/Loss Since 1948

Olympics Money FactsThe table below shows the hard numbers on nearly every Olympics since 1948. The most profitable so far was the 1988 Summer Olympics in Seoul, South Korea with a gain of $300 million. Those games cost $4 billion but brought in $4.3 billion in revenue. For a breakdown of where that revenue comes from see the section below the table. The most costly Olympics ever was the 2008 Winter Olympics in Beijing, China. According to most reliable estimates that Olympics cost $42 billion and brought in revenue of no more than $6 billion for a staggering loss of $36 billion. Treating that as an outlier, the average cost of an Olympics is $3.8 billion and the average result is a $600 million loss. Many Olympics do turn an actual profit, but the profit is small compared to the money put in, no greater than around 2% to 5%. In other words, any given dollar would be better off invested in a conservative stock fund. So why do countries do it? They hope to give a boost to tourism and other positive inflows to their economies.

Olympic Money: How Much Does the Olympics Cost?
OlympicsCostRevenueProfit or Loss
1948 Summer Olympics, London, UK$3,046,752N/AN/A
1956 Summer Olympics, Melbourne, Australia$8,640,000N/AN/A
1964 Summer Olympics, Tokyo, Japan$72,000,000N/AN/A
1968 Summer Olympics, Mexico City, Mexico$176,000,000N/AN/A
1976 Summer Olympics Montreal, Canada$1,250,000,000$350,000,000-$900,000,000
1980 Winter Olympics, Lake Placid, US$169,000,000$160,500,000-$8,500,000
1980 Summer Olympics, Moscow, Soviet Union$1,350,000,000$1,231,000,000-$119,000,000
1984 Winter Olympics, Sarajevo, Yugoslavia$110,900,000$120,900,000$10,000,000
1984 Summer Olympics, Los Angeles, US$700,000,000$950,000,000$250,000,000
1988 Winter Olympics, Calgary, Canada$1,000,000,000$1,032,000,000$32,000,000
1988 Summer Olympics, Seoul, South Korea$4,000,000,000$4,300,000,000$300,000,000
1992 Summer Olympics, Barcelona, Spain$9,300,000,000$3,000,000,000-$6,300,000,000
1992 Winter Olympics, Albertville, France$1,900,000,000$1,833,000,000-$67,000,000
1994 Winter Olympics, Lillehammer, Norway$1,100,000,000$1,200,000,000$100,000,000
1996 Summer Olympics, Atlanta, US$1,800,000,000$1,810,000,000$10,000,000
1998 Winter Olympics, Nagano, Japan$2,300,000,000$2,300,000,000$0
2000 Summer Olympics, Sydney, Australia$3,000,000,000$900,000,000-$2,100,000,000
2002 Winter Olympics, Salt Lake City, US$2,300,000,000$2,401,000,000$101,000,000
2004 Summer Olympics, Athens, Greece$9,000,000,000$3,000,000,000$6,000,000,000
2006 Winter Olympics, Torino, Italy$4,100,000,000$4,096,800,000-$3,200,000
2008 Summer Olympics, Beijing, China$42,000,000,000$6,000,000,000-$36,000,000,000
2010 Winter Olympics, Vancouver, Canada$6,400,000,000$3,800,000,000-$2,600,000,000
2012 Summer Olympics, London, UK$14,600,000,000$4,000,000,000-$10,600,000,000
2014 Winter Olympics, Sochi, Russia$22,000,000,000$4,500,000,000-$17,500,000,000
2016 Summer Olympics, Rio, Brazil$12,000,000,000N/AN/A

One third of all Olympics money comes from tax revenues from the host country. Another third comes from broadcasting earnings. Those have been growing steadily since the Olympics began, but they’ve taken a huge jump in the past decade.

Olympics Broadcasting Money

Related: How Much Money Do Olympic Athletes Make for a Medal?

Olympics Money Sources

Where does Olympics money come from? Primarily from four sources: Broadcasting, taxes from the host country, ticket sales and money paid by other countries. Licensing makes up a small percentage of the money inflows. The table and chart below show the breakdown.

How Does the Olympics Make Money?
Host Country Tax Money28%
Ticket Sales21%
Money from Other World Countries13%

The chart below shows a ballpark figure for the money made in any given year by that year’s most lucrative Olympics. We chose either winter or summer. The idea with this chart wasn’t to show the exact money brought in by every single Olympics since 1948. Rather, the idea was to show that in terms of the money brought in, Olympic income is growing exponentially. There are two things to be aware of when looking at this chart. The first is that the 2016 number is a projection based on earlier data and media estimates. It may very well not bear out. Finally, though it’s true that real revenue has been increasing exponentially, growth in spending on the Olympics has been outpacing growth in revenue. That shows the host countries aren’t focused on earning money from the Olympics but on making it the best it can be.

Olympics Money by Year

Winter vs Summer Olympics: Which Costs More?

Winter Olympics generally cost more than Summer Olympics. We say “generally” because the one big exception is the 2008 Summer Olympics in Beijing. Those Olympics cost an estimated $42 billion, though much of that cost is for urban projects that would have been paid for with or without the Olympics, like improvements to airports and new buildings in universities. Tossing that particular Olympics out as an outlier, the average cost of a Summer Olympics since 1948 comes in at $3.8 billion. The average cost of a Winter Olympics in the same time period is $4.1 billion.

Summer Olympics vs Winter Olympics: Which Costs More Money?
Summer Olympics average cost$3,783,979,117
Winter Olympics average cost$4,137,990,000

Related: Usain Bolt Net Worth: Oh Those Jamaica Tax Rates

How Much Do Olympic Athletes Make for a Medal?

One more Olympics money consideration is: How much money do the athletes make? There are a whole bunch of answers to this question. The first answer is that U.S. athletes make $25,000 for a gold medal. However, hugely popular olympians like Michael Phelps can make over $10 million a year in endorsement deals alone. Still other gold medalists like Katie Ledecky make very little because of amateur status that prevents them from signing endorsement contracts. The chart below shows the Olympic money breakdown by the highest paying countries that have actually won medals. Note that we only show seven countries in our table but most countries pay at least something.

Olympic Medal Bonus Money
Country Olympics Money
Azerbaijan (Never actually won a medal) $510,000
Italy $180,000
Russia $135,000
France $65,000
China $31,400
USA $25,000
Germany $19,500

Is Olympic Spending Out of Hand?

There’s been some speculation lately that countries are overspending on the Olympics. There’s no question that by and large the Olympics aren’t profitable for the host countries. Some countries like China justify their sky-high Olympics spending by saying it’s a political expense with no profit motive. While that may make sense in a country with high economic growth, what does it say for a country in recession like Brazil? Many have called out Brazil for spending so much on the Olympics (1.25% of its total budget in fact). That may be a valid criticism in a country with rampant poverty. Still others say the spending is needed to bring in foreign investment, tourism money and to get the public eye on Brazil’s problems.

If you liked reading about the Olympics money situation, try this post on how much money Olympic athletes make or this one on Michael Phelps’ net worth.