Postby Didier » August 12th, 2015, 2:30 pm
The thing about the Olympics is that costs aren't always comparable, and the big numbers thrown around don't necessarily mean that much. For starters, there are two distinct budgets, one for operating costs and one for long-term capital improvements. Also, importantly, the host country (and it's government) matters a lot.
Take Sochi, for example. The estimated cost is usually cited as being around $50 billion. That's not an indication that it cost $50 billion to host the Winter Olympics. It's an indication that a totalitarian country can build a modern city almost from scratch, including Olympic sports and transportation infrastructure, while using corrupt business practices, and at the end host a Winter Olympics, all for $50 billion.
In theory, the host city doesn't cover the operating costs. You know how NBC agreed to pay $7.65 billion for the U.S. broadcast rights to the 2022-2032 Olympics? And how Visa, Coke and McDonalds spend millions to use the Olympic rings logo? And how hundreds of thousands of people buy tickets? All of that goes into the operating costs. But yes, the city is on the hook if it goes over budget.
There's a legitimate question as to whether the IOC should cover long-term capital improvements, like improved or new transportation infrastructure. Of course, the answer to that question is that the IOC is never going to pay for your city to build a new train line.
So the point is, the Olympics are obviously expensive, and the nature of hosting an Olympics means the host city will likely have to pay for certain things. But in a country like the U.S. — where the Olympics are important, and our corporations largely bankroll the Games as is — hosting doesn't have to mean a $50 billion public expenditure. Boston 2024, for example, was budgeting for wide-ranging insurance policies to protect the public from just about anything that could go wrong in the operating budget. Los Angeles, should it bid, will likely have extensive safeguards in place as well.