First Person: What Does It Cost to Host the Olympics?

Hosting a modern Olympic games is a multi-billion dollar undertaking for cities and countries, with potentially equally large benefits and returns.

The costs to host the Olympics depend on many factors, including the use of existing infrastructure, as well as corporate sponsorship and underwriting. The 2004 Athens Games cost about $11 billion, and the country never really recovered, as it added to the country's huge debt. The 2012 London Games are being funded with public money, and the government has budgeted about $5.3 billion for the games. The 2000 Sydney Games were budgeted at $1.75 billion, but ended up costing twice as much.

To host the Games, cities must create a whole infrastructure including stadiums, athlete housing villages, sports venues, as well as roads and transit connections to serve it all. The $11 billion dollar figure for the Athens Games doesn't even include infrastructure projects like roadways, subway connections, bridges and train lines. Cities also now face enormous security budgets to make sure the Games are safe from attack.

Host cities hope to gain many things by hosting an Olympic games. They hope to gain respect, for being able to create the infrastructure and execute the large event. It also shows, at least superficially, how well the host country is doing.

Governments and Olympic host cities hope to gain visibility and recognition for their country and for tourism. An Olympics brings a worldwide audience, who can watch the games and think how beautiful that country is and possibly plan a vacation there.

Cities also hope to gain revenue, from the games themselves and the attendees. Olympic games bring millions of visitors who want to watch the events and participate in the spectacle. All those people need hotel rooms, taxi cabs, restaurants and other local businesses in which to spend their money. The income that flows into a local economy by hosting an Olympics is enormous. All this revenue for the local community also flows into government coffers in the form of taxes. All those visitors pay hotel taxes, sales taxes and other fees that go to the government.

Local businesses and governments can also negotiate sponsorships and exclusive deals with various corporations and other.entities. The host city also hopes to generate revenue by using and re-using the facilities and infrastructure created for the games. This has been a problem in Beijing, finding a new use and generating revenue from the large "Bird's Nest" stadium created for the 2008 Games. The 2008 Beijing Games reportedly cost $33 billion, which included the infrastructure updates including a new airport terminal, light railway, new roads and all the venues.

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