Why Winning the Bid Can Be the Biggest Loss
In 2015, Boston was the leading candidate to host the 2024 Summer Olympics. City leaders had spent years lobbying for it. Within months the campaign collapsed under local opposition and Boston walked away. Hamburg put its bid to a public vote soon after. Voters said no. Rome pulled out in 2016 citing fiscal problems. Budapest followed in 2017 after a petition forced the threat of a referendum. Of the five cities that originally wanted the 2024 Games, three quit before the IOC ever had to choose. Only Paris and Los Angeles were left standing, so the IOC gave the Games to both at once, one for 2024 and one for 2028, because it no longer had enough willing candidates to run an actual contest.
The Winter Games tell the same story in a more extreme form. Six cities entered the race to host the 2022 Winter Olympics. By the time voting happened, four had withdrawn: Oslo, Stockholm, Krakow, and Lviv, on top of Munich and a joint Swiss bid that never made it past local referendums. That left Beijing and Almaty, the only two candidates from countries where the public doesn’t get to vote no. The IOC handed the Games to Beijing.
That is the opposite of how the story used to go. For most of the twentieth century, cities fought hard for the right to host, and losing a bid was treated as a national disappointment. Now walking away is treated as a win.
When Hosting Was a Prize
For most of the postwar era, hosting the Olympics was one of the few ways a city could buy itself instant global relevance. Tokyo used the 1964 Games to announce its return as a modern industrial power, building the country’s first bullet line in time for the opening ceremony. Seoul used 1988 the same way, timing the Games to coincide with its transition out of military rule and using them to signal to investors that the country had arrived. Barcelona used 1992 to rebuild its waterfront and its international image at the same time, a transformation still cited today as the rare case where the infrastructure genuinely outlived the party. Losing a bid stung. Toronto, Melbourne, and Detroit all lost multiple Olympic bids across the twentieth century and treated each loss as a real setback.
Los Angeles in 1984 became the template everyone believed they could copy. With only Tehran briefly in the conversation before dropping out, Los Angeles had leverage it rarely gets and used it to refuse new construction almost entirely, leaning on existing venues and private sponsorship instead. It turned a profit. For twenty years afterward, cities kept bidding on the assumption that a well-run Games would pay for itself the same way.
Two things eventually broke that assumption. The first was cost. The second was that global exposure, once a scarce resource only a handful of events could provide, quietly became nearly free. In 1988, Olympic broadcast footage might have been the first extended look much of the world got at a host city. Today, anyone can watch a city in high definition on their phone without an Olympics being involved. That likely weakened one of the strongest arguments for bidding in the first place, and it happened slowly enough that most cities kept bidding for years after the argument had stopped being true.
The Cost Problem Was Never New
Researchers at Oxford’s Saïd Business School have tracked Olympic costs back to 1960, and every single Games on record has run over its original budget. Their most recent analysis puts the average cost overrun at 172 percent in real terms, with Summer Games running higher than Winter Games. That is a bigger average overrun than any other category of large public project the same researchers have studied, including nuclear plants, dams, and rail lines.
The individual numbers are stark. Montreal’s 1976 Games were budgeted at roughly 120 to 130 million Canadian dollars and ended up costing about 1.5 to 1.6 billion, a bill Quebec finished paying off through a special tobacco tax in 2006, thirty years later. Sochi’s 2014 Winter Games were estimated at around 12 billion dollars and are now widely put at 50 to 55 billion, the most expensive Olympics ever held, Summer or Winter.
Part of the reason this keeps happening has a name: the winner’s curse. When cities compete for a prize like this, the winning bid tends to be the one built on the most optimistic assumptions about cost and timeline. Reality catches up later. It doesn’t help that the deadline can’t move. A bridge or a hospital that runs late just runs late. An Olympics that runs late does not happen, so the opening ceremony arrives on schedule no matter what it costs, which removes the normal discipline that keeps most public projects from spiraling.
Paris 2024 is a useful test case, and a genuinely mixed one. The organizing committee’s own operating budget, funded mostly by sponsors, the IOC, and ticket sales, closed with a small surplus. But that operating budget doesn’t capture the full construction and infrastructure spend the Oxford researchers track. On that broader measure, they calculate a 115 percent overrun, lower than most recent Summer Games but still more than double the original number.
What Peak Demand Leaves Behind
Olympic venues are built for one specific problem: hosting a global audience for two or three weeks. Cities are then left maintaining infrastructure sized for a peak that never comes again. Athens built venues for 2004 that now sit derelict. Rio’s Olympic Park was largely abandoned within a year of the 2016 closing ceremony. Sochi’s facilities reportedly cost close to a billion dollars a year in upkeep for stadiums with little ongoing use. Building for a two week peak instead of a city’s actual long run demand is, structurally, an inefficient way to spend public money.
What Actually Changed Was the Politics, Not Just the Cost
Cost overruns are not new. Montreal’s disaster happened in 1976. What changed is that voters started noticing, and started getting the chance to say no. Hamburg’s bid died in a referendum. Budapest’s died because a petition threatened one. Boston’s died under sustained local organizing before it ever reached a formal vote. The mechanism was different each time, but the underlying shift was the same: citizens started asking what else that money could buy.
That question, once rare, is now the default one. Billions for stadiums invites an obvious comparison to housing shortages and aging transit systems, and that comparison has become politically hard to avoid.
This isn’t a story about democracies being incapable of hosting well. Los Angeles, Paris, and Barcelona all ran Games that are widely seen as successes. The pattern is narrower. Modern democratic politics, with referendums, an investigative press, and organized opposition, makes it much harder to commit tens of billions of dollars to a project with an uncertain payoff. Governments that don’t face those constraints don’t face the same problem. Both finalists for the 2022 Winter Games came from non-democratic systems, after a string of Western cities had already withdrawn. That is not a coincidence.
The Second Force: Governments Simply Have Less Room
The political explanation is real, but it isn’t the whole story. Global public debt is on track to reach roughly 100 percent of world GDP by the end of this decade, up from under 84 percent before the pandemic, according to the IMF’s most recent fiscal monitoring. Borrowing costs have stayed elevated even as central banks have started easing, because markets are pricing in years of large deficits, aging populations that push up healthcare and pension spending, and rising defense budgets competing for the same fiscal space.
That matters for the Olympics in a specific way. A city or country deciding to bid isn’t just weighing prestige against cost in the abstract. It’s weighing an open ended, historically 172 percent over budget commitment against a fiscal backdrop where the money has never been tighter and the debt has never been higher. Referendums did not create that backdrop. They just gave voters a formal way to react to it. Even governments that never had to hold a public vote are quietly bidding less, for the same underlying reason. There is simply less slack in the budget than there used to be.
The IOC Didn’t Tweak the Auction. It Abandoned It.
By 2019, after watching city after city walk away, the IOC changed how hosts get chosen. Instead of running a competitive bidding war between multiple cities, it now runs something closer to a private negotiation, quietly courting a single preferred candidate through what it calls targeted dialogue, before bringing that one option to a vote with no real alternative on the table. For most of Olympic history, the entire mechanism for choosing a host was an auction: several cities competing for one prize, with the winner decided by the promises they were willing to make. The IOC didn’t adjust the auction’s rules. It walked away from having an auction at all.
There’s a quieter shift hiding inside that decision too. The IOC isn’t just choosing hosts differently. It’s choosing different kinds of hosts. Brisbane won the 2032 Games as the only city under serious consideration, with roughly 80 percent of its venues already existing or temporary. Los Angeles is leaning on the same approach for 2028, staging the Games without building a single new permanent venue. The Olympics used to be something a city built itself around. Increasingly they are something a city has to already resemble before it is allowed to bid.
Here is the part that should give reformers pause. Paris 2024, held up as a model of restraint, used existing or temporary venues for 95 percent of its needs, a higher reuse rate than Brisbane is promising for 2032. It still ran 115 percent over its construction budget. Oxford’s researchers, looking specifically at the reuse strategy, found it has not meaningfully reduced overruns for either Tokyo or Paris. Reuse lowers the starting cost. It does not fix the mechanism that makes Olympic budgets balloon once the schedule is locked and the world is watching.
The Larger Pattern
For most of the last century, the assumption behind big public projects ran in one direction. Build the stadium, the airport, the pavilion at the world’s fair, and the economic and political benefits would follow from the symbolism itself. Prestige created prosperity. That assumption has quietly inverted. Prosperity now has to justify prestige, and projects that can’t clear that bar struggle to get built no matter how much prestige they promise. World Expos have faced the same shrinking interest, and cities have grown warier of bidding for major tournaments generally, for many of the same reasons that killed Boston’s and Hamburg’s Olympic bids.
Paris did almost everything the reformers asked. It reused 95 percent of its venues, ran a disciplined operating budget, and still cost more than double what it promised. That is the real lesson sitting underneath a century of Olympic bidding data: reuse fixes the venues, not the mechanism. Governments everywhere are now weighing prestige projects against housing, healthcare, and energy at a moment when borrowing has never been more expensive, and the Olympics happen to be the clearest, best documented casualty of that trade off so far. They are unlikely to be the last.
