The Olympics and Paralympics in Paris were the grand finale for a European summer filled with all-star sporting events: from the European Football Championship in Germany to the traditional tennis tournaments in Paris and Wimbledon, from Formula One racing to the Giro d’Italia and the Tour de France. And economic impact, both direct and indirect, is still a goal for many of the organizing committees or public authorities that finance similar events.
The total budget for the 2024 Paris Games was €8.8 billion, which was €2 billion over the 2019 estimate of €6.8 billion. And as for infrastructure, the Olympic Village will be turned into housing that will go on the market (€646 million, of which €542 million from the State), and then we have the new walkway between the Stade de France and the Olympic Aquatic Center, as well as the new swimming pools at Seine-Saint-Denis.
In addition to the direct impact of tourism (from €1.4 to €3.6 billion), there’s the post-Games phase to consider too (2025-2045), which will bring a potential boost to tourism in the Île-de-France.
The success of the Olympics for the French isn’t something to measure by the total turnover generated, the medals awarded, the tourism or the investments. According to statements from the Minister of Sport and the Olympics Amélie Oudéa-Castéra, France will open four new swimming centers in the capital and 16 more in the Île-de-France. The local authorities in the Ile-de-France and the City of Paris have drawn up a “swimming plan” with the aim of “eliminating 75% of water pollution by 2024” caused by inefficient sewer pipes. The idea is to make the Seine swimmable, once pollution has been drastically reduced thanks to the Games.
This decision was visionary. In 2023, the Organization for Economic Cooperation & Development (OECD) published a guide for measuring the impacts of cultural, sports, and business events, broken down into economic, social, and environmental dimensions. These impacts are inspired by recent directives pertaining to sustainability, applying the European Sustainability Reporting Standards (ESRS) as the new method for informing about business performance.
What’s needed, in fact, is a pluralistic view of measurement. Specifically, the first margin of an event is usually negative, if we calculate the expenses in terms of cash flows of a given organizing committee, often with a public authority picking up most of the tab.
In any case, if we differentiate between expenses and investments for a second-level margin, we need to consider the medium to long term impacts of the infrastructure built for the event itself (new arenas, theaters, and stadiums, for example) and infrastructure in the ecosystem of tourism (expanding an airport, a subway system, and so forth). Unfortunately, if you make the wrong investments, you won’t generate any value. Just think of the useless “cathedrals in the desert,” those white elephant projects built with no notion of economic sustainability: the World Cup stadiums in Brazil, and to some extent the stadiums built for the same event here in Italy in 1990.
The third margin encapsulates the principles of ESRS and the OECD in terms of the non-economic impacts that these events can emerge. In other words, the surrounding area can
acquire certain intangibles that would never have happened without the “big bang” of the event itself. So, the event becomes a catalyst for resources and attention that paves the way for dramatic headway in the cultural dimension of a community, primarily along social and environmental lines. We’re talking about playing more sports, learning to organize events, inspiring the new generations, encouraging volunteering, and opening up even more to international cultures.
From this standpoint, events become the main tools for growing economies as far as social content that can transform and improve the quality of human capital, which in turn can embody sustainable economic development for the entire area. This is precisely why we can say that, if it’s well planned and well run, an event is forever.
Originally published in Fortune Italia
