Olympic Winter Games always more expensive than promised

The Olympic Winter Games in Sochi are over, and it is time for the final calculations. These will most definitely be higher than what the organisingation committee promised to the IOC in 2007. The initial budget was 7.7 billion euro for both the organisational and infrastructure costs, but that amount is likely to have increased to at least 40 billion.

An unimaginable amount which Sportgeschiedenis, a Dutch sports history website, calculated before the start of the Games, and found that it is about five billion euro more than the costs of all previous Winter Games since 1924 combined.

The IOC has got the message, because before the start of the Winter Games IOC president Thomas Bach said that this could not continue. "We don't want the bid cities spending so much money into the projects by so many extravagances in high-tech performances for each presentation and I think a lot could be done in this sense," he said according to AIPS. Bach’s statement joins a long tradition of official warnings from the IOC, as these have been issued for half a century.

Exploding costs

Sportgeschiedenis has analysed the costs of from the Olympic Winter Games since 1924. The initial budgets of all 22 Games are compared with the final costs. The differences between these amounts are huge: The final costs were in most cases much higher than the budget promised by the organisers before the event.

Below, the table with all budgets from previous Winter Games can be found. The costs have been recalculated to euro and corrected after inflation. In the case of the Winter Games in 1924, 1928 and 1952 not all costs were found, but when looking at articles from that time, one can conclude that the costs for these Games were also higher than expected.

Blackmailing and theft

Foolish measures have been taken to cover and cover up the cost overruns over the years.  Lake Placid, for instance, had a budget of 75 million euro for the 1980 Winter Games but spent 373 million. In panic, millions of dollars were taken from a fund for the fight against unemployment.

Grenoble used the infrastructure needed for the 1968 Winter Games as a manner of blackmailing. Three months after the IOC had assigned the event to the French, the organisersation rang the bell: “If we do not start improving the roads within two months with, it is too late. We need a new station, an airport and new roads to Lyon and Geneva.”

They already knew that in Grenoble the year before, but the blackmailing was successful. The expenses increased so much that they were still not fully paid in 1992 when France again hosted the Winter Games, this time in Albertville.

The 1998 Winter Games in Nagano tops everything. The Japanese had an initial budget of 1.17 billion euro, but spent around 14.6 billion euro. The final cost is an estimate, as the complete administration of the event was burned.

For more details about all the Winter Games go to the Sportgeschiednis website: http://www.sportgeschiedenis.nl/financieel-dossier-olympische-winterspelen.aspx

Cost overruns of sixty billion euro

If we sum up the initial budgets of all the Winter Games in the table above, the total amount comes to around 16 billion euro. The final expenses amounted to around 75 billion euro, almost five times as much. That is almost sixty billion euro more than promised.

The average five times increase in costs is now also verifiable at this year’s Sochi Games, whose budget quintupled over seven years. These Winter Games are not the exception, as the IOC claims, but a confirmation of the cost orgies.

Infrastructural costsThe huge difference between the initial budgets and the final costs is due to the fact that the first budgets serve a political and propagandistic goal. The population has to be convinced of the need for the Winter Games and thereafter the IOC.

In July 2003, for instance, Vancouver 2010 presented an initial budget of 1.5 billion euro. However, the final budget amounted to five billion euro and the costs were funded partly by taxes.

The cost overruns in Vancouver were largely due to infrastructure costs for entrance roads and airports. This is the case for almost all Winter Games, which experienced a large increase in infrastructure costs during the preparations.

As such, this is not a problem because a country will also benefit from these new roads and airports after the Winter Games. Therefore, it is not quite fair to include these construction costs in the cost of the two week event. However, this does not change the fact that almost all organisers presented an initial budget that was way too low for organising the Winter Games successfully.

The IOC is powerless

Bach announced earlier this month that measures will be taken against these expensive Winter Games, but this has been on the IOC’s agenda for the IOC for over half a century. In 1969, the IOC published a document regarding this issue with cooperation by the Dutch IOC-member Van Karnebeek. In 1972, it was IOC president Avery Brundage who stated that these amounts were irresponsible. His successor Lord Killanin said in 1976 that the IOC did not wish that these amounts of money were wasted on Winter Games.

The IOC appears powerless to break this pattern. In four years, we will see whether Bach has managed to change things: Will the 2018 Winter Games still be five times as expensive as the South Korean organisers promised in 2011?Note: For the research I mainly used quotes from Dutch newspapers from last century. All costs are estimated, but the conclusion remains that most of the Winter Games in the last 90 years were much more expensive than the organisers said when they started.

Jurryt van de Vooren is a sports historian, editor at Andere Tijden Sport (Other Times Sport) and owner of the website sportgeschiedenis.nl on sports history. This article is translated and adapted from Dutch into English by Play the Game with kind permission from the author.