Will the olympic flame shine once more? : a study into the profitability of hosting the 2034 winter olympic and paralympic games in Norway

Abstract

The topic of this thesis is the project of hosting the 2034 Winter Olympic and Paralympic Games in Norway, studying its potential profitability. Subsequent to a recent project by the International Olympic Committee, known as the New Norm, the requirements for hosting the Olympics and Paralympics have undergone a revision. As a result, the many conditions faced by the Oslo 2022 Committee are not the same today. Our study consists of an analysis of the direct cash flow effects of the Olympic project, resulting in a static net present value as a measure of its profitability, as well as a discussion of real options and external effects, and their potential impact on the expanded net present value. The result of our analysis is a negative static net present value of NOK 2 930 123 000, leaving the project unprofitable. Our discussion regarding the expanded net present value suggests there is a potential for the project having indirect effects on the Norwegian economy which could justify undertaking it despite our main findings. This decision would depend on the magnitude of such effects, and requires a further economic analysis building on our results. In addition to the main findings, our study also suggests there is a potential for cutting certain costs due to the revisions made by the New Norm. Our analysis is based on estimates from previous Olympic budgets, and as a result their processes and strategies. Due to the lack of information and resources available to us, our study is unable to capture the full potential of the New Norm revisions for optimising processes such as the transportation and technology concepts, venue plan, etc. With access to this information, a planning committee would be better suited for conducting these optimisations, potentially increasing the value of the project to some extent. In summary, our results provide insight to and establishes a baseline for a further investigation of the costs and benefits of hosting the 2034 Winter Olympic and Paralympic Games in Norway.