When Utah voters last year approved the state's bid for the 1998 Olympic Winter Games - and agreed to spend $56 million in tax dollars for required facilities - they were told the Games would cost about $400 million, with much of the money to come from television receipts and corporate sponsors.
When the Utah Olympic Committee made its formal bid for the Winter Games this week to the International Olympic Committee, the package had ballooned to nearly twice the original size. Estimates put the cost at perhaps $750 million.What has happened here?
Some opponents of the games are grumbling that if Utah gets the bid when the game site decision is announced next June, the state will be financially liable for an Olympic event twice as expensive as voters were told. But it isn't like that at all.
The difference between the $56 million down payment in tax dollars and the actual cost of hosting the Winter Games has always been expected to be made up by revenues from broadcast rights and corporate sponsorships. That hasn't changed in the least.
In making a $750 million bid, the Utah Olympic Committee wasn't suddenly going wildly extravagant or being guilty of misleading the voters in the 1989 referendum about the cost of the Games.
What happened was that the IOC - the International Olympic Committee - disclosed that television and corporate revenues apparently are going to be much larger - several hundred million dollars larger - than originally expected.
That being the case, Utah had to upgrade its bid to compete with other countries - Japan, Sweden, Italy, the Soviet Union and Spain. Those nations undoubtedly also expanded their packages in view of the larger-than-anticipated income estimates.
The lack of details before the bid was made is somewhat troubling, but the reasons are understandable. The bid was prepared with private, donated funds; no tax money was involved, so secrecy was possible.
The Utah Olympic Committee kept its bid confidential so that competitors like Japan would not find out in advance and adjust their bids accordingly.
Now that the IOC has the bids in hand, the need for secrecy is over. Bid committee members returned from the IOC meeting in Lausanne, Switzerland, and explained details of the bid to the Salt Lake City Council Thursday night.
Despite the $750 million bid, Utahns in charge of the operation say they will be frugal. No money will be spent before it is actually in hand from TV or corporate sponsors. If the money fails to materialize, the expanded plans can be scaled down. Thus, the $56 million in tax money already approved remains the only state liability.
The estimated numbers on Olympic revenue can be expected to continue to change between now and 1998. Eight years is a long time ahead to make rock solid financial predictions, but right now the prospect looks good. The extra money would allow construction of much better Olympic facilities.
Any profits from the Winter Games would be divided between the IOC and the state, with the state getting the major share. The first of the state's share of any profits would be used to reimburse the state for as much of its original $56 million investment as possible.
In the meantime, the larger Utah bid and the anticipated $300 million or more in extra revenue actually provide much more flexibility for the state, perhaps reduce some of the financial obstacles, and increase Utah's chances for the Games.