Touchy on Sochi: Russian bear off the (costly) Olympics wagon

Observers of Putin know that Peter the Great is one of his key talking points, such as in his February 2024 interview with former Fox News host Tucker Carlson, so the 2014 Winter Olympics were a PR success, but this only lasted for a fortnight. What did that $60bn expenditure bring to Sochi and Russia in terms of economic return?

The initial estimate for Sochi 2014 was $12bn, but the late Russian opposition leader Boris Nemtsov and Leonid Martynyuk, a journalist and opposition activist, claimed early on that Putin's "personal project" would come at a far bigger cost for the country.

Nemtsov and Martynyuk calculated that the main Olympic Stadium in Sochi eventually cost $230m but could only seat 40,000 people, meaning the cost-per-spectator was almost $20,000, an astonishingly high figure.

To make matters worse, many of these facilities would remain empty once the Olympics closed. In an article, the pair said Sochi as a city had a population of up to half a million people, while the Olympic buildings could sear around 200,000.

Clearly, the stadiums… are going to go empty," they said. "Zhemchuzhina, the only previously existing large soccer stadium in Sochi, was filled to its capacity of 10,000 fans only once—during its opening." A year later, Nemtsov was assassinated.

Sochi 2014 in numbers

The Russian Government grows uncomfortable whenever the costs of the 2014 Sochi Games are brought up. Kremlin spokesman Dmitriy Peskov warned against conflating the "pure costs" related only to the Olympics with those spent on infrastructure.

This may have helped International Olympic Committee (IOC) spokesman Mark Adams to say in February 2015 that Sochi 2014 had made "an operating profit" of $53m. When the BBC reported this, it said Adams used a total Games cost of $41bn, despite official Russian calculations at the time putting the cost at more than $45bn.

The cost of infrastructure maintenance for Sochi 2014 is also a point of confusion. In an investigative piece published earlier this year, Sports.ru quoted Krasnodarskiy Krai Governor Alexander Tkachev.

He claimed that it would cost only 7 billion Rubles (around $182m in 2014) to maintain that infrastructure over the first three years. Yet his own Deputy Governor, Alexander Saurin, said it would $260m for just a single year.

In their exposé, Nemtsov and Martynyuk said oligarchs Oleg Deripaska and Vladimir Potanin had invested in the infrastructure that would serve the Games, but then demanded 100% government guaranteed-loans because they knew they lose money.

"Thus, if you make the necessary calculations, it turns out that the overall amount of state capital investment in the programme for preparation of the Games is 96%," they wrote. "The Olympics are being built at the taxpayers' expense." The investigation from Sports.ru confirmed this.

"The private ski resort Rosa Khutor, belonging to billionaire Vladimir Potanin, is not making a profit despite the active season and its expensive ski passes," it said. Rosa Khutor was built from 2003-11 and hosted the Games' alpine skiing events. Potanin owns a giant nickel and palladium mining and smelting company.

The Fisht Stadium in Sochi—the centrepiece of the Games—is now the home of the Sochi Football Club and remains the property of the state. The club pays rent but a TASS interview in 2022 revealed that it is taxpayers who keep it afloat.

Deputy Minister of Sport for the Krasnodarskiy Krai region, Sergei Myasischev, said stadium maintenance cost around $11m at the 2022 exchange rate.

Rejecting the Olympics

Just ten years after Putin welcomed the world to Sochi, his attitude towards Paris 2024 is very different. Banned from sending a delegation under the Russian flag, the Kremlin's official position was that each athlete or federation should make their own choice about whether to go to Paris for the Games.

Yet there were clear messages that could not be ignored. For instance, no Russian channels agreed to broadcast Paris 2024. The last time that happened was 40 years ago, when the Soviet Union boycotted Los Angeles 1984.

When the high-speed rail network in France was plunged into chaos on the day of the opening ceremony in what was called "a massive attack," French Sports Minister Amélie Oudéa-Castera said it was "probably coordinated". Asked if Russia was behind it, she said: "Maybe." The Kremlin denied this.

Peskov later said a segment from the opening ceremony that was likened to the Last Supper of Christ was "completely disgusting." He also criticised the IOC.

"Based on our experience from 2014, we know that the whole script must be agreed in advance with the IOC. The peculiarities of the French Republic have been familiar to us for a while now, but for the IOC to approve this for such a massive, global audience… it is hard to believe."

In a clear indication that Russia is further distancing itself, it has launched new international sporting events such as the first BRICS Games, held in Russia's south in June 2024, and the Friendship Games, originally scheduled for September 2024 but now been moved to 2025.

In terms of athletes and countries, these would be a fraction of the size of the Olympics, but at least Russia's investment in the BRICS Games was much more modest, at around $70m.

Whether this was because Moscow's massive investment in Sochi 2014 has not yet been fully digested, or whether the PR return from the BRICS Games would not be as handsome, one thing is for sure: Russia no longer wants to play with the West.