When a country and one (or more) cities are chosen to host the Olympic Games, what begins the day after the assignment is a long and very complicated organizational process that involves many different entities called upon to manage several billions of dollars (or euros, as in the case of Milano Cortina 2026). There are sports organisations, governments, local and regional administrations, sponsors who have to make many things work in a relatively short period of time, manage enormous public and private budgets, without being able to be late for the appointment and with the great and complicated task of understanding what will become of all this enormous work once the Games are over. Precisely defining the cost of the Olympics is very complicated, for the 2026 Italian winter games the cost is estimated at around 6 billion euros. But how are the costs distributed, what figures are we talking about, and who pays for everything?
Who organizes the Olympics and what are the roles of each entity
When we talk about the Olympics we often hear the acronym “IOC” mentioned: the International Olympic Committee (Comité International Olympique) is formally the owner of the Olympic Games and holds all rights related to the event. However, it is not the direct organizer of the Games, but instructs the designated city to organize them through an official agreement called “Host City Contract”, in which it determines a series of rules that must be followed to “deserve” the possibility of hosting the Games. At this point the host city establishes a specific committee that will take care of the actual organization (in the case of the next Olympics the Milano Cortina 2026 Foundation), established specifically to manage everything relating to the event, from communication to ticket sales, including security, hospitality, logistics, accreditation of athletes and spectators.
However, it is not the Foundation that manages everything related to infrastructure, because usually the construction of the facilities, the Olympic village and other structures involves the management of public funds and investments that will remain with the territory even after the Games, such as roads or buildings for example. In the case of the next Winter Olympics, the Milano Cortina Infrastructure Company (Simico SpA) was established, owned by the Ministries of Economy and Transport, the Lombardy and Veneto Regions, and the autonomous Provinces of Trento and Bolzano. The same pattern was also repeated at the Paris Games and in most of the previous Olympic events, placing a company in charge of the infrastructure alongside the organizing committee. The host city Committee therefore finds itself in a very short time having to hire an enormous staff, in the order of thousands of people, only to then cease to exist once the Games are over.
Who pays what and how the costs are shared
The financing of such a large and complex event involves public and private resources, in an often fragile balance. A good part of this funding comes directly from the IOC, which re-invests its substantial revenues in the organization of the Games, deriving from two main sources: the sale of television rights (61% of revenues) and sponsorship agreements with large companies that appear as official sponsors of the Olympic Games at a global level (30% of revenues).
The organizing committee can then raise further funding through agreements with local sponsors, sales of tickets to attend the events and merchandising. The necessary infrastructures (arenas, arenas, accommodation for athletes, roads, railways) are almost always publicly funded and will remain as an “Olympic legacy” to the territory. Public spending has historically been at the center of controversy, as it has a direct impact on the state budget. A case in point is the great controversy that arose around the construction of the new bobsled, skeleton and luge track in Cortina, with an expected cost of between 100 and 120 million euros.
In recent years, the IOC has made great efforts to promote Olympics that are increasingly sustainable and reduce the impact of public spending on the organisation, and the next Games are a great example of this: an event spread across the entire Alpine region which takes advantage of many existing structures. On the other hand, however, the IOC itself requires guarantees regarding the modernity of the infrastructures, making in any case large investments in restructuring and redevelopment.
When do the Olympic Games really cost and what influences the cost
According to the Organizing Committee, the total cost of holding the Tokyo 2020 Summer Games was 13 billion dollars: 7.9 billion for the construction of infrastructure, both temporary and permanent, and 4.8 billion for all operating expenses. However, various research bodies estimate the real cost of those Olympics at around 28 billion dollars, i.e. more than double the officially declared budget. This is because giving a figure on how much you really spend to organize an Olympics is very complicated and depends on what you choose to include in the calculation. According to a study by the University of Oxford, if only the costs relating to the sporting event such as facilities, organization and logistics are considered, the average figure is around 5.2 billion dollars for the summer Games, 3.1 billion for the winter ones (values adjusted to 2015).
One of the biggest problems, however, concerns the initial budget estimate, which is almost never respected, with sometimes disastrous results.
The case that is remembered as among the worst in history is that of the 1976 Montreal Summer Games: presented as a great low-cost opportunity for the city and for Canada, they exceeded the estimated budget by 720%, forcing citizens to pay additional taxes for 30 years in order to repay the enormous debt accrued by the city.
However, there are also virtuous cases: the most cited and successful is the Los Angeles 1984 model, when the city largely used already existing structures, drastically reducing investments in infrastructure, and closing excellent agreements regarding television rights and sponsorships: it is one of the rare cases in which the final balance of the Games was positive and not in the red. Another case study is that of Barcelona 1992: although with a very high budget (just under 10 billion dollars revalued in 2015), the city exploited the event to completely transform itself and go from an industrial city to one of the most important tourist destinations in Europe.
For the Milan Cortina 2026 Olympics, the latest estimates speak of costs close to 6 billion euros, of which approximately half will be allocated to public works that will be useful even after the end of the Games. Over 70% of the financed works will be allocated to sectors such as mobility, roads, rail transport and urban regeneration.
Precisely defining the cost of the Olympics is very complicated and is one of the most debated topics among economists who deal with large events. What are the costs? really to blame on the Olympics? Do the public employees (such as law enforcement) who work at the event represent an “Olympic” cost or are they just carrying out their daily duties? Should the costs for the construction of public infrastructures such as roads, railway lines and subways that improve the well-being of cities in the long term be attributed in their entirety to the Olympic organisation? A practical example: the Inalpi Arena in Turin, where the ATP Tennis Finals are held as well as numerous concerts during the year, was built for the 2006 Turin Olympics (inaugurated under the name PalaIsozaki), with a construction cost of close to 90 million euros. Is this a cost that should be completely included in the budget of the Turin Olympics or should it be amortized over the years? And in the case of the second option, in how many years? What if the facility had not been used as planned, as happened with the Cesana bobsleigh track, which closed in 2011 a few years after the Games? How should this cost be amortized? These examples make it clear that not only is it very complicated to establish the real economic impact of the Olympics, but how easy it is to read the data at will to obtain only the part that is most useful for one’s purposes.
Organizing the Games: risky bet or guaranteed investment?
It is clear at this point that organizing the Olympic Games is one of the most complex and risky undertakings that a country or city can accept. The organizational structure involves very different actors, public and private, and requires a combination of resources and strategic vision that does not allow errors or delays. The editions that have managed to be more “virtuous” are those that have minimized the creation of new infrastructures, as the Milano Cortina 2026 Foundation promised to do. On the contrary, when attempts have been made to make large investments and bring radical changes to the city, the result has often been that of costs and debts that are out of control. An exception to this reasoning are the countries that organized the Games with large public investments without any claim to “recover” the costs, as in the case of Beijing, China (Summer Games in 2008, Winter Games in 2022) and Sochi, Russia (Winter Games in 2014).
To truly know how much the Milan Cortina 2026 Games will cost, we will still need a lot of time, and we should prepare ourselves to read and hear figures that are probably very distant from each other, which, ironically, could all be correct, but born from different evaluation criteria.
