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The Winter Olympics problem—nobody wants them

Beijing has won the right to host the 2022 Winter Olympics. Now all it needs is some snow.

A message of congratulations is projected onto the Bird's Nest Olympic stadium as people gather after Beijing was chosen to host the 2022 Winter Olympics in Beijing July 31, 2015.
Damir Sagolj | Reuters
A message of congratulations is projected onto the Bird's Nest Olympic stadium as people gather after Beijing was chosen to host the 2022 Winter Olympics in Beijing July 31, 2015.

China's capital—a city with scant snowfall and a limited winter sports experience—was chosen last week to host the Games, beating out Almaty, Kazakhstan. While Beijing boasts sparkling facilities left over from its 2008 Summer Games, the International Olympic Committee's decision perplexed many observers.

But the governing body may not have had a choice. Despite the IOC's efforts to make bidding and hosting more appealing, some of the stronger possible host cities have shied away in recent years.

Beijing's only competition came from Almaty, a city in a mountainous region of oil-rich Kazakhstan, which has a population of about 17 million. Oslo, Norway—the previous favorite to host the games—withdrew a bid in October amid government and public opposition. Stockholm and Krakow, Poland, also pulled earlier bids.

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"What you're increasingly seeing is where there is a lot of democratic input in government, nations are saying 'no,'" said Mark Dyreson, a professor of kinesiology at Penn State University who studies sports and society. "It's really hard to get a handle on how much the Olympics truly cost."

The IOC's Olympic Agenda 2020 reform initiative—approved late last year—aimed to make bidding easier and less costly. But enthusiasm about hosting remains muted, despite China's willingness to shell out huge money for the games.

Costs are difficult to calculate due to limited information and exchange rates. But costs of the 2014 Winter Olympics in Sochi, Russia, and the 2008 Summer Games in Beijing may have topped $40 billion each, according to widely reported estimates.

"Smaller, relatively wealthy countries realize they're not going to gain as much from the publicity. The deck is now somewhat stacked in favor of countries who feel they have something to prove to the world." -Gordon Hylton, professor, University of Virginia

Despite lingering concerns about China's human rights and environmental record, the IOC stressed that Beijing's Olympics plan will fall in line with its broader ideals and cost-cutting strategy. Beijing's proposed investment in Olympic villages, venues and other infrastructure is projected at about $1.5 billion, while the IOC will funnel another $880 million into the project.

"Beijing 2022 has a strong and visionary project that seeks to incorporate winter sports into people's lives with the ultimate goal of improving overall fitness and health," the IOC said in a statement to CNBC.

Beijing has a "strong plan" to ensure that snow blankets the outdoor venues, which will be set up in locations outside the city, the IOC said. It added that "every Winter games relies on snow-making to some degree."

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But Dyreson and other observers are not convinced that hosting the Olympics will become any less expensive or cumbersome. That may continue to drive some bidders away.

"Smaller, relatively wealthy countries realize they're not going to gain as much from the publicity," said J. Gordon Hylton, a law professor at the University of Virginia who has studied sports law history. "The deck is now somewhat stacked in favor of countries who feel they have something to prove to the world."

Brazil—a country that increasingly seeks to assert itself on the world stage—has faced a share of challenges ahead of its 2016 Summer Olympics in Rio de Janeiro, among them reports of water pollution at swimming and boating venues. The project overall will cost about $11 billion, according to The Guardian. (Disclosure: CNBC's parent company NBCUniversal will broadcast the Rio Olympics.)

Still, the Beijing Games can hold some benefits for China and others despite the potentially huge costs. For one, a successful Winter Games could boost the ski industry in the northern parts of the country.

China's winter sports sector lags behind those of the United States and much of Europe. But with the event, China hopes to open new streams of tourism, according to the IOC.

"They have a regional concept intended to create a winter sports market for more than 300 million people in Northern China and accelerate the development of a new sports, culture and tourism area," the IOC said.

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Also, despite recent struggles for the world's second-largest economy, companies cannot discount the Chinese market's importance, said David Carter, executive director of the Sports Business Institute at the University of Southern California. Another Olympics offers more opportunity to reach China's growing middle class, he added.

"This is an important long-term consumer and business model for people to reach," Carter said.