Economics of Olympics

The economic benefits of the Sydney Olympics total US$6.5 billion, 2.5 times the figure for the Seoul Olympics. Australia is known to have created 90,000 jobs by hosting the Games. According to a Samsung Economic Research Institute (SERI) report titled "The Economics of the Olympics" released Wednesday, the Sydney Olympic has attracted 1.5 million more tourists and an expected profit of US$2.7 billion. The analysis at SERI quoted a report by Andersen Consulting and stated that the economic benefits of the Sydney Olympics were 2.5 times higher than the 2.6 billion dollars gained by the Seoul Olympics in 1988.

Moreover, the report asserted that as the Olympics has positioned itself as the world's leading event, many companies from all over the world are using it as an opportunity to market their products to a global audience and to enhance their brand image. Olympic marketing is known to have begun with Coca-Cola during the 1928 Olympics in Amsterdam, when the company gave out free drinks from the U.S. to the participating athletes. Coca-Cola then went on to form a long-term sponsorship contract with the International Olympic Committee in 1996, barring its competitor, Pepsi, from the Games.

There were incidences where the Olympics made a brand image known worldwide. A textile company in Japan known as Brothers Industrial Co., increased its overseas brand image from 10-15% to 60-70% after participating in the 1984 LA Olympics as a sponsor. The institute further asserted that Korean companies should also regard the Olympics as an opportunity to market their products worldwide by benchmarking sports events used by companies from advanced nations.