The views expressed in this editorial are solely those of the author and do not necessarily reflect the opinions and views of ESC United, its editorial board, its readers, or any other person, entity, or organization.

Eurovision is expensive. The contest this year cost about €30 million to host. Malmo cost a modest €12 million. According to the New York Times, Azerbaijan spent an astronomical 800 million U.S. dollars (€588 million) on the contest, including the Crystal Palace and other infrastructure, although other sites report the cost at about €200 million. Germany spent €25 million. Norway spent around €28 million. Russia spent €30 million.

It’s not just hosting that is expensive. This year at least four countries withdrew because of financial concerns – Bosnia, Bulgaria, Cyprus, and Serbia. In previous years other countries have withdrawn because of finances, e.g., Andorra, Portugal, and Montenegro. Reportedly Hungary withdrew in 2010 at the IMF’s request.

Costs and Benefits of Hosting Eurovision

Azerbaijan spent millions building the Crystal Palace.
Azerbaijan spent millions building the Crystal Palace.

Hosting Eurovision, as the numbers above suggest, has enormous costs and it’s unclear if the benefits make up for these costs. There were reports that Ireland couldn’t afford to host the contest after winning three times in a row. In 2012, the Spanish singer said Spain couldn’t afford to host if she won. Occasionally I think we’ve all suspected that a country didn’t really give it their best effort to win. As Thomas Schreiber, an Entertainment Manager for ARD, said, “The Eurovision Song Contest is not the kind of event that you organize if you want to earn money.”

Hosting has obvious benefits – increased tourism, publicity, hotels, etc. The semifinals make the contest longer so people stay longer and spend more. The tourism director in Malmo said the 30,000 Eurovision fans spent about €20 million on hotels, food, and shopping, which is a net positive for Malmo. On the other hand, Denmark has a net loss of €2.75 million. Hosting has intangible benefits like improving a country’s image, which can translate into tangible benefits like tourism in the future. I don’t know if Azerbaijan’s tourism has increased since Eurovision, but the clips between songs made Azerbaijan look amazing.

Part of the problem is who bears the cost of hosting and who gets the benefits. The broadcaster pays for hosting the actual contest (hence the rumors about RTE going bankrupt in Ireland) but they don’t receive the tourism money that hotels, restaurants, and shops do. Similarly, the city needs to accommodate all the fans – e.g., increase public transportation and security – and these costs may not be fully recouped, so taxpayers likely fund part. Hosting can be a net positive, but it’s problematic that the parts of society that bear most of the cost aren’t the same as the ones who get much of the benefit.

Costs and Benefits of Participating
Countries pay to participate; they have to promote their entry; and pay for hotels and airfare, which is expensive. Ireland spent €226,000 to send Jedward in 2011, including about €70,000 to the EBU to participate. For countries with huge budget deficits, it’s hard to justify participating because it’s hard to quantify the benefits. With winning the contest we know there are benefits for tourism and nation branding, but do these benefits extend to all participants?

I don’t know if participating increases tourism, but I think it has soft power and can help with a country’s image. Participating means that a country is part of the European community and that might be important for a country’s image. Also, as an American with limited knowledge of the world, my first impressions of some countries came from Eurovision. I knew Armenia was a country before 2010 – that was (sadly) the extent of my knowledge. After Eurovision 2010, I learned they had apricots – not earth-shattering knowledge but it was a start. In 2011, Serbia scored major brownie points with me because their song Čaroban was great and still is one of my favorites.

Serbia’s 2011 entry, Čaroban.

These may just reflect my lack of worldliness, knowledge, and culture, but I believe Eurovision can change perceptions – not necessarily in a huge way; it won’t make or break a country’s image or solve the world’s problems, but it has an effect. It’s hard to put a price on that because it might be a small, objective fact, e.g., Armenia has apricots, or it could be subjective, like the fact that I had a positive association with Serbia because of Čaroban. That effect is important – not because countries should want to impress me with their songs or that it matters at all what I think/know about each country – but because by participating countries become familiar to viewers. That familiarity matters even if it’s just for three minutes and in a ridiculous kitschy kind of way.

How to Make Eurovision Cheaper?
If a country wants to participate in Eurovision but can’t or is afraid of winning because it’s expensive that’s a problem. If countries can’t afford to host then they won’t want to win, which brings down the quality of the competition. If countries can’t afford to participate then we’ll have fewer entries, which isn’t as much fun, and with fewer countries paying to participate someone has to make up that price difference.

An example of Eurovision and advertising as a way to bring in money
An example of Eurovision and advertising as a way to bring in money

Eurovision should be more accessible, but I don’t know what the solution is. The only idea I have is one I feel sacrilegious suggesting and that’s to commercialize Eurovision more. In the U.S., for example, a 30-second Superbowl ad goes for $4 million. I don’t know if Eurovision would get that much for a commercial, but still if you have 10 minutes of commercials in the 3-hour program that could reduce costs. (I’ve watched Eurovision on the BBC and Eurovision’s website, neither of which have commercials during the show; other countries may have commercials, but I don’t know how it works everywhere.)

Sponsorships could decrease costs. Eurovision has sponsors, but they could have more to cut the host’s costs. Every sports team in the U.S. has dozens of sponsors – Infiniti is the official luxury car of my beloved Boston Red Sox; New Balance is their official footwear; Jet Blue is their official airline; CVS is their official pharmacy – you get the idea.

I like that Eurovision is not very commercialized. Coming from the U.S. where everything is commercialized it’s refreshing. This isn’t an ideal solution, but I don’t know what else there is. When it comes down to it, I’d rather see a commercial (or more commercials if some countries already have them) during the show than have countries drop out. And I’d rather have companies sponsor Eurovision than have countries afraid to win because they can’t afford to host.

It’s a slippery slope. Commercialization might undermine the spirit of the event. I don’t know if it’s ideal to have hosting Eurovision become profitable because then we might see cheating. But hosting Eurovision shouldn’t be a huge burden or something countries avoid and finances shouldn’t prevent so many countries from participating. I don’t know what the right balance or solution is, but the costs of the contest shouldn’t prevent countries from realizing the benefits.

What do you think: is cost a problem and, if so, what should be done about it?

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