There is one thing at the moment that is keeping people united on a single note these days and that is undoubtedly the Olympics 2012 fever. This summer season Olympics 2012 is attracting huge audience as enjoying being on the peak these days. While there are still confusions about which country will take the medal this year, the event itself is an enough reason to divert people’s attention towards its cost and expenditure. We discussed about the medals only initially, and this time it is even bigger. Smart earning Methods studied deeply and present here the actual story behind the London Olympics 2012 investments and expected output.
As soon as it was announced that London would be hosting 2012 Olympics games, it made the host more confused as the costs of hosting the event skyrocketed. According to the sources, the talks about money began just after the announcement. From funding and sponsorship to the cost of tickets and the effect on the UK economy, everything about money became the talk of the town. The private funders vanished leaving behind the government holding the fiscal bag all by themselves. Now this was a tough situation to tackle with initially, however, you’d be more surprised to know about the cost of the entire event that audiences all over the world are lost in.
The cost of hosting Olympics
The London Olympics 2012 needed £11.3billion for making this event a big hit. They got £9.3billion from public sector funding and £2billion from the London organizing committee of the Olympic and Paralympics games. This huge amount of money was divided in building venues and infrastructure for £5.3billion, elite sport and Paralympics funding for £400million, security took £600million, regeneration of lea valley used up £1.7billion, a contingency fund took £2.7billion and vat got £800million.
From where do locog’s gets its cash?
Locog- London organizing committee of Olympic and Paralympics games is a privately funded committee. It received quite a big share of £700million from the international Olympic committee (IOC), £700million from local sponsorship and £600million from ticket sales and merchandise for organizing and running the event. We shared the breaking news on the opening ceremony highlighting its expenditures that took about £40million from the government and £40million from locog. Despite of such difficult scenarios stated above, the show was a hit, with a huge audience with a profit, triple that of the actual cost. Just Imagine!
The IOC’s cash
International Olympic committee gets its funds through global sponsorship and broadcast deals to organize summer, winter and youth Olympic Games. The sponsors usually get exclusive marketing rights for their money. In the current four years, IOC has generated about £640million in sponsorship revenue, which is itself great enough!
Sponsors are the source of energy of every event. Isn’t it? The three local sponsors of Olympics 2012 summer season are tier one, two and three. These sponsors get special privileges such as protection and certain marketing rights under the London Olympic Games and Paralympics games act 2006 and the Olympic symbol (protection) act of 1995.
How money is utilized
Whenever one gets the money in hand, several questions are being raised about it. The same happened with London. The costs and budget of the event was a subject of controversies as most of the money came from the government, it was asked frequently whether it will be beneficial for UK or not.
According to the lloyds banking group, London 2012 will give UK economy a £16.5billion boost by 2017. This will benefit the construction and tourism benefitting the most.
Though there is also a chance of setback in the economy of UK as a humongous amount of money is washed away in building the infrastructure and making strong security a reality. London can also lose its tourists as not everyone is a game lover so people might opt for staying out of London if London chooses to be a centre for games.
Long lasting benefits
The benefits of this event will be reflected in the long run when this newly improved transport system, sports facilities, construction and infrastructure will be utilized by the common people.
Most of the GDP is linked to the games which stems from construction projects such as the development and building of sites and venues occurring before 2012. It approximately affects 57% of the GDP. Tourism from games is likely to deliver 12% of the total contribution to the economy and hosting it would probably give 6% contribution.
Of all the benefits Olympics might give, the most important one is that it provided employment to about 130,000 people as part of the Olympics team.
All in all, everything being spent on London Olympics 2012 is surely going to payback positively to all the British in the coming years.
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