THE ECONOMIC EFFECT OF HOSTING SPORTS MEGA-

EVENTS IN DEVELOPING COUNTRIES

Sports mega-events: What are they?

1. Attract a large number of visitors

2. Have a large mediated reach (availability via mass media)
3. Come with large costs
4. Have large impacts on the built environment and the
population
Some examples are:

. FIFA World Cup

. Summer and Winter Olympics
. Super Bowl (Rugby Competition)
. Asian Games
. Commonwealth Games
. Expo
What are possible gains of hosting a Mega-
Event?

. General infrastructure that are politically difficult to provide

without the strict deadline of an opening ceremony (roads,
airports, etc.)

. An increased number of tourists after the event.

. Promotion of a higher sports participation (health).

. New stadiums.

. Signal to investors that a country is ready to

welcome foreign investments.

. “Putting a country on the map” (politically and

economically).
BUT….

There are no gains without (large) investment!!!

Problems of Developing Countries :
They lack…
Sufficient Stadiums

Accommodations

Transportation Systems

Other Sports-related infrastructure

General infrastructure :
. Many hosts of mega-events are able to use their hosting as a catalyst to make
investments that would not necessarily be available to them at other times.

. Roads, hotels, redevelopment of old or unused buildings, increased security.

. The potential benefits from investments in a city’s infrastructure for the

hosting of a mega-event make it difficult to judge the financial success of
hosting such an event.
Impact on GDP :
. Normally, laborers and companies are more wealthy than before if the
GDP is increasing and the inflation is stable

. Hosting the mega-event is likely to contribute to the increase through

an inflow of foreign capital and developing infrastructures.

. Generate jobs, additional tax income and economic growth for the host
region
Tourism :
. Mega-events generate an inflow of capital from foreign countries to the host country
as tourists visit the country and corporation sponsorship rights.

. Cities and countries speculate that the global attention that large sports events
generate will attract visitors, not just for the event itself but also in the long run.

. Experts point to the ‘Barcelona model’, whereby the 1992 Summer Olympics were part
of a larger package of urban renewal that turned the city into a top tourist
Destination.
Infrastructural Catalyst :
. The large numbers of visitors, journalists, officials and athletes who descend on event
hosts place high demands on the urban infrastructure.

. Among the key requirements are high-capacity airports and public transport systems,
high-bandwidth information and communication technology infrastructure, a reliable
energy supply and hotel
accommodation in different service classes

. This is why some claim that large events can become catalysts for a city, ‘accelerating
its infrastructural development by up to 10 years’.
Negative Impacts of Hosting a Sports-Mega Event :

. The stock market of the losing country, which applies for holding events but
loses in the bidding process, is affected negatively.

. Hosting mega-events can cause a displacement.

> Forced residential displacement
> Population redistribution through market-mechanisms
> Could lead to an increase in housing prices by enforcing to move
local people
Conclusion :

. International sporting competitions are fun and, if done properly, hold the
promise of increasing understanding among different peoples and cultures
in our strife-ridden world.

. Yet, if done as spectacle, with concentration on grandiosity and ostentation,

these mega-events inflict unnecessary debt on their hosts and undermine
sustainability concerns.