The cost of the Olympic Games (Summer and Winter) have been studied by Oxford scholars Bent Flyvbjerg and Allison Stewart. They found that over the past 50 years the most costly Games have been London 2012 (USD14.8 billion), Barcelona 1992 (USD11.4 billion), and Montreal 1976 (USD6 billion). Beijing 2008 may have been more costly or not; the Chinese authorities have not released the data that would allow verification of either position. Cost here includes only sports-related costs and thus does not include other public costs, such as road, rail, or airport infrastructure, or private costs, such as hotel upgrades or other business investments incurred in preparation of the Games, which are typically substantial but which vary drastically from city to city and are difficult to compare consistently.
Flyvbjerg and Stewart further found that cost overrun is a persistent problem for the Olympic Games:
- The Games overrun with 100% consistency. No other type of megaproject is this predictable regarding cost overrun. Other megaprojects – in construction, infrastructure, dams, ICT – are typically on budget from time to time, but not the Olympics.
- With an average cost overrun in real terms of 179% – and 324% in nominal terms – overruns in the Games have historically been significantly larger than for other types of megaprojects.
- The largest cost overruns have been incurred by Montreal 1976 (796%), Barcelona 1992 (417%), and Lake Placid 1980 (321%), all in real terms.
- The data show that for a city and nation to decide to host the Olympic Games is to take on one of the most financially risky type of megaproject that exists, something that many cities and nations have learned to their peril. For example, cost overrun and debt from Athens 2004 substantially worsened Greece's financial and economic crises 2008–12. Montreal took 30 years to pay off the debt from the 1976 Games.
Finally, Flyvbjerg and Stewart found that over the past decade, cost overrun for the Games has come down to more common levels for megaprojects. For the period 2000–2010 average cost overrun was 47%, whereas before that average overrun was 258%. However, London 2012 has reversed this trend with a cost overrun that, at 101% in real terms, is back in the three-digit territory. Going forward, the challenge for planners and managers of the Games will be to get cost overrun and costs back under control, and to reduce them further, conclude Flyvbjerg and Stewart.
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