Olympic costs

By Felix Salmon
September 23, 2009
today's WSJ:

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When a number in the newspaper seems too outrageously large to conceivably be true, don’t believe it. For instance, from today’s WSJ:

The campaigns by the four bid cities, Rio, Chicago, Tokyo and Madrid, are heating up. Mr. da Silva has already approved some $240 billion in funding for the Games and offered the federal government’s financial guarantee to cover shortfalls in the organizing committee’s budget.

The Olympics are expensive, but they’re not that expensive — $240 billion would amount to more than 12% of the continent-sized country’s $2 trillion GDP.

The actual Olympic costs are $14.4 billion, and that includes $11.6 billion in construction and infrastructure costs — renovation of airports, roads, subway lines, that kind of thing. And the whole package has been incorporated into Brazil’s monster $240 billion federal investment program, 57% of which is public funds.

Most of the costs of the Rio Olympics, then, are a necessary part of the city’s (and country’s) regeneration in any event, they’re not Games-specific. The organizing committee’s operating budget is $2.8 billion, or about 1.2% of the number in the WSJ. That’s a much more realistic number to look at.

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