With hundreds of medals won and a lifetime of glory to follow for winning athletes, the 17-day-long Paris Olympics is officially coming to a close.
Athletes train for years, if not decades, in anticipation of the Games—as do its host cities. It’s no small feat to have 329 medal events across 32 different sports, about 10,000 athletes and even more while welcoming millions of visitors.
The stakes were high in Paris’s case as it was the event’s venue for the first time in 100 years. It hoped to do things differently by being the “greenest” iteration of the Olympics to date, turning to renewable energy sources, plant-based foods, and rented sports equipment.
Paris’s investment in the games didn’t stop there. The French capital undertook to tidy up the Seine River to use it for open-water swimming events—a move that, er, didn’t go to plan. It also built a new train line to help improve connectivity to the Olympic venues.
While Paris adopted a novel approach in some areas, it faced the same baggage that host cities inevitably struggle with: cost overruns.
The 2024 Games is estimated to have cost just shy of $10 billion, exceeding the planned budget by 25%, S&P Global Ratings estimates. That’s not as big of an overrun as the Olympics in Sochi (2014) or Rio (2016), but still reflects the tricky trade-off that cities must make when they accept the monumental task of hosting the Olympics.
“We do see a bigger overspend is in the infrastructure side of things, but also the operational side is not without its pressures,” said Alexander Budzier, a fellow in management practice at the University of Oxford’s Said Business School, who co-authored a study on the Olympics’ legacy of overspending.
In some ways, the Paris Olympics is at the cusp of a rethink about future events of this scale: should they stay as they are, or do they desperately need to change?
Paris’s struggles
In preparation for the Olympics, Paris decided to limit the number of new locations it builds to keep costs and carbon emissions under control. And so it did. But in the process, the city engaged in what some called “social cleansing” as it moved hundreds of people living near Île-Saint-Denis, where the Olympic Village is located, and elsewhere. The government has denied the move had any correlation with the Olympics.
The event seemed to be off to a weak start when the opening ceremony was marred by heavy rains, out-of-sync filming, and controversial acts that some took as a parody of the “Last Supper” painting.
The Seine’s readiness for an event of this scale has also been an issue. The river was contaminated until dangerously close to the Games’ kick-off. Then, athletes began falling sick after swimming in the river (although it hasn’t yet been confirmed whether the Seine is to blame).
Some of those hiccups are reasonable to expect and hard to plan for, said Ken Hanscom, who has been involved with the U.S. Olympics team and serves as the COO of ticketing platform TicketManager.
“A few bumps that were expected along the way. But I think the number of bumps that have been here [in Paris] have been very, very small,” Hanscom told Fortune.
The Olympic ‘hangover’
Cities have historically been “hungover” after hosting the Olympics. The Athens Olympics of 2004, while significant given its provenance, came with such a heavy price tag that it was believed to have ushered in Greece’s financial crisis.
Meanwhile, Rio’s Olympics eight years ago left the Brazilian capital with abandoned facilities after the Games. In Tokyo, corruption scandals have followed the city’s efforts to host the event and gain traction amid the COVID-19 pandemic.
Is Paris immune from these effects? Maybe not, but it’s certainly progressed from the mistakes made by some of its predecessors.
Concerns over costs, for instance, still linger even though the French capital has turned to cardboard beds and fewer new venues.
The paper co-authored by Budzier found that Paris was, in fact, 115% above its initial estimate in real terms. Those costs could otherwise have been spent on public services—a concern Budapest residents recognized and signed a petition for, resulting in Hungary dropping its 2024 Olympics bid seven years ago. The Paris Olympics had its fair share of critics for the same reason, although the event went ahead as planned.
Since the IOC launched Agenda 2020 to change how future Olympics are staged, cities—including Paris—have had to think more about how to make events sustainable. This has enabled progress, but it will take time before it's sustainable.
“The estimated costs of what this will take, go down. At the same time, the overruns are still there,” Budzier said. “It doesn't look like Paris, at this very moment, is economically benefiting from it [the Olympics], so the benefits will come later.”
There have been big successes through the legacy of the Olympics, too. For instance, when Los Angeles hosted the Games in 1984, it left the city with $223 million in profits. The London Olympics in 2012 was helmed as a model for how the Games can boost urban regeneration and create infrastructure that benefits local communities.
The 3 features of an Olympic success
So, what does it take for the Olympics to be successful? Hanscom, who has attended four of the iterations so far, named three things besides foundational elements, such as safety.
Firstly, staying reasonably within budget is a win. The Paris Olympics didn’t really achieve that, but it helped cap some of the big infrastructural and operational spending. This is also part of an ongoing, evolving effort to reconcile the numbers. Paris officials justify the costs as they plan to repurpose the Olympic Village units for housing after the Games, and the rewards of that can be hard to quantify.
Secondly, strong local participation means that everyone directly impacted by being in the host country or city immerses themselves in a grand sporting experience. In Paris, a large number of the spectators were expected to be French—a trend that Hanscom observed as well.
There were rumblings of unsold tickets and unbooked hotel rooms as fewer international tourists came to the city (that hurt Air France KLM’s revenue) ahead of the Games. But hey, at least the French came through.
Lastly, Hanscom highlighted that the Olympics put on a good show for in-person and TV viewers. The Olympics has suffered from a drop in viewership in recent years and has been desperate to reverse that. But this year, the opening ceremony became the most-watched event on French TV. Data shows that viewership figures have been up even globally.
So, on balance, Paris might have succeeded, Hanscom said.
“I think there's a progression that's happening about how they can continue to improve and evolve because now, when you also look at LA, I don't believe that there's not a single new facility that is being built,” he said. “It can always get better.”
The spotlight of hosting the Games can generate a positive “leverage effect,” Budzier points out.
“Hosting the Olympics allows you to do stuff that otherwise probably takes decades of public debate and piecemeal interventions in a city that you could just do,” he said.
Take the Seine River’s clean-up, for instance. Past French leaders had promised to make it swimmable again, but the deadline kept getting kicked further—until Paris committed to hosting the Olympics. The city spent $1.5 billion, making the river water less contaminated. Sure, the Seine wasn’t in its best form, but more was done to clean it up in the last few years than in the decades before.
The world is eagerly watching how the Los Angeles 2028 Olympics will do better by the tournament and its legacy. It’s optimistic enough, for now, that the idea of a successful iteration of the Games is evolving, slowly but surely.
