Photo: Marcopako via flickr
The Olympic Games cost a lot. London’s final price-tag is thought to be £8.4 billion ($13 billion), 107% over budget.While it’s still in the balance whether the Olympics will be a money spinner for the city, there are some people who are definitely getting a payday. Let’s take a look.
While athletes at Olympics aren't paid for participation, some can earn money for medals (for instance, the United States Olympic Committee will pay $25,000 for a gold medal).
However, that's chump change compared to sponsorship money. For example, take US swimmer Ryan Lochte, who could make a huge payday if he performs well against rival swimmers (and teammate Michael Phelps). Lochte has five endorsement deals with Gatorade, Ralph Lauren, Gillette, Mutual of Omaha, and Speedo -- if he performs well enough for the bonuses in his contracts to hit, he could earn between $3 to $4 million these games.
Of course, if you're not famous or successful... tough luck we guess.
The Olympics represent an enormous security risk for a city, and London's Metropolitan Police Force is likely to be stretched to its limits -- and so, the private sector has to step in.
G4S, the world's largest global private security firm has been given a huge $355 million contract to head security for the Olympic games.
Regenerating an entire area of London has required a lot of cash. For example, take Sir Robert McAlpine Ltd, a private British engineering and construction company, which is carrying out construction of the Olympic Stadium.
With thousands of athletes, media members, committee members, heads of state, and technical officials, airlines and airports, especially Heathrow Airport, will be inundated with passengers. And that's not even taking into account the hundreds of thousands of spectators.
As such, airlines and airports are expecting an extremely busy (and profitable) period. It is estimated that on July 26th and August 13th, the expected busiest days for arrivals and departures, a 45 per cent increase in departing and arriving passengers will be experienced, including a 35 per cent increase in baggage.
A staple of all Olympic games are the futuristic, visually dazzling sports venues. With swimming increasingly becoming the sport to watch, millions of eyes will be on the Aquatic centre. It won't disappoint with famed architect Zaha Hadid as the chief designer.
Despite worse than predicted tourism interest and a subsequent slashing of pricing, London hotels will still be in high demand once the Olympic games begin, especially luxury hotels like The Langham where the cheapest rooms go for around $400/night.
As a sign of restaurant optimism, McDonald's will build a temporary 1,5000 capacity franchise employing 2,000 people. Estimates put the number of visitors at 3 million and 50,000 Big Macs are expected to be sold. For the six weeks spanning the Olympic and Paralympic games, it will be the largest McDonald's in the world.
McDonald's, also one of the largest sponsors of the games, is also banning nearby restaurants from selling fries.
The IOC may be a not-for-profit organisation but that doesn't stop them from making a lot of money. The leading advertisers including Proctor & Gamble, Coca-Cola, and Visa just paid the IOC $932 million for the worldwide rights to market their products during the games.
The USOC, in charge of training, supporting, and staging the competitions in preparation for the Olympics, makes a great deal of money (though it too is a non-profit) from the TV deal NBC struck with the IOC.
Of the $4.38 billion winning bid put in by NBC for the next four games, the USOC currently gets 12.75 per cent of the money accrued from U.S. TV rights deals and a hefty 20 per cent of global sponsorship revenues.
The Tube will experience a windfall of increased use and increased revenue during the games. Normally, the Tube transports about 3.5 million commuters a day. Estimates for the games put that number at an extra 3 million per day.
That's a lot of people, and a lot of extra tickets purchased.
Situated alongside the Olympic Park and the regional and international railway stations, this £1.8 billion ($2.78 billion), 1.9 million square foot shopping centre will employ 10,000 people and bring in a lot of revenue during the games.
Amazingly, shoppers must walk through the mall to get into the Olympic Park and with nearly 250 retail stores, 70 eateries, a 17-screen cinema, and the largest casino in Britain, temptation (and opportunities for the mall to make money) lies everywhere you look.
With the brand new 80,000 capacity Olympic Stadium in the Lower Lea Valley, a shopping mall, office buildings, housing, power and water systems, and increased transportation lines are all being built in an effort to prepare for the games and regenerate the area. What was once a run-down, disconnected, industrial district of London may soon become a vibrant, artistic, rapidly evolving and popular destination.
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