The game is on the decline: will pay Brazil investment in the Olympics

Budget show

Creative Director of the Olympics Fernando Meirelles announced that the original four ceremonies — opening and closing Olympic and Paralympic games — has been allocated a budget of $113,9 million, but then more than halved, to $55.9 million Is 12 times less than the amount spent on the ceremony in London in 2012, and 20 times less than the cost of performance in Beijing in 2008. “When 40% of homes in Brazil have no sewers, you really can’t spend a billion reais on a show,” explained Meirelles.

According to independent surveys, data from which is cited by the Brazilian newspaper Politiken in late July, at least 60% of citizens fear that the Olympics will bring the country more harm than good — the opposite of the universal jubilation that swept Brazil in 2009, when she won the race for the right to host the Olympics. Change in attitude of the Brazilians is directly related to the state of their national economy.

In 2010, the GDP growth rate of Brazil reached a maximum in 25 years of 7.5%, beating expectations by the Central Bank. But now the country is experiencing the worst recession since the 1930-ies. In 2015, the economy fell 3.8%.

Sad experience

When applying to host the Games in 2009 the Brazilian authorities claimed that the budget would amount to 28.8 billion reais ($7.2 billion). But in the beginning of the year, Autoridade Publica Olimpica (the Brazilian Agency responsible for the organization of the games) reported that the costs will amount to 39.1 billion reais ($9,75 billion).

For comparison, the 2012 Olympics in London cost the organizers $16.3 billion, and the world Cup, held in Brazil in 2014, $15 billion.

“In real terms, exceeding the originally stated costs on average 156% is the largest figure for a similar mega-project,” — said in the study.

Discourage if the costs

A few days before the opening ceremony of the Games in different Brazilian cities have been mass protests. “After 30 days, all these huge houses and the area will be useless, as the authorities do not provide funds for their further maintenance,” feared by the Brazilians, reports CNBC.

In the process of preparing for the soccer world Cup, the government hoped that measures to improve the infrastructure for the championship, including transport facilities, will bring the economy $90 billion by 2019. However, the majority of the budget went to the construction of new stadiums.

Some projects were too ambitious. For example, the stadium “Amazonia” in Manaus is calculated on 44 thousand spectators, but at the local matches come only a few thousand people. Writes the Tages Spiegel, the cost of the stadium was €218 million, costs paid by the state, and now he has to pay to take on the construction loans for 20 years.

Return on investment in sports events must be considered in the long term, the Director of marketing and development of company Swiss Appraisal, Russia & CIS Asil al-Daher. “Despite all the costs, this is a promising investment, which attract the flow of tourists, create additional jobs, attract foreign investment, and most importantly, will retain all of the newly created infrastructure. We believe that $1 spent in preparation for the Olympics, will bring approximately $2.8 to 3.0 by 2030,” says al-Daher.

While the short term income from sponsorship, ticket sales and the rights to broadcast not only comparable costs, but are mainly in the international Olympic Committee, negotiated the expert. The audience of the TV coverage of Rio 2016’s too early to assess, however, for example, the American TV channel NBC has announced that the opening ceremony looked just 26.5 million Americans — 35% less than the opening of the Games in London in 2012. From Europe, given the difference in time zones, are also unlikely to see records for TV viewing these Games.