Hosting the Olympic Winter Games in 2002 was an incredible experience for Utah. It would be wonderful to do so again, and 89 percent of Utahns scientifically polled agree.
I found Jay Evensen’s column surprising — opining that perhaps we should not host again — and missing a fundamental understanding of budgets and Olympic Games management.
He correctly cites concern over costs. He writes the following: “Virtually every bid city talks about holding down costs, but those costs find a way to rise. Sochi spent an estimated $51 billion in 2014, with little, if any, oversight. That wouldn’t happen here, but it’s naïve to think there won’t be unexpected, and perhaps unnecessary, costs.”
Mr. Evensen’s implication seems to be that we have a risk of overspending and losing money, necessitating the need, then, to tap into taxpayer money.
In fact, Mr. Evensen is correct that cost is a central concern from the cities that are choosing not to pursue hosting the Games. The residents of Calgary recently voted 56 to 43 percent against moving ahead to pursue hosting the Olympics in 2026. The projected budget for Calgary was $5.11 billion in Canadian dollars, or $3.88 billion in U.S. dollars. This high level of expense requires significant contributions from all levels of government, totaling $2.2 billion U.S. dollars. The citizenry correctly asked the question, “What is the return on that investment?”
In stark contrast to Calgary or any other city bidding for the Olympic Winter Games, our forecast budget for hosting again is an austere $1.4 billion — a fraction of what other cities have spent. We have existing and active venues, infrastructure, compact geography and experience from hosting the 2002 Games, making the hosting experience far more predictable and significantly less risky than last time.
Our budget also includes a contingency of $60 million and a modest additional sport endowment/surplus of $50 million, giving us a nice cushion. We have a reasonable probability of generating more revenues than forecast, leading to a larger surplus, which could be used for expanding our sport endowment and legacy for our community. Our budget contemplates zero funding from state and local governments, only requiring federal costs to provide security.
Budgets are not managed by the IOC; they are managed by the host city. In 2002, our operating entity, the Salt Lake Organizing Committee for the Olympic Games, generated a $100 million surplus and paid back to the state of Utah $59 million, which had been invested in early venue construction. And for those Games, we had to build the venues. Most of the surplus went into an endowment to fund the ongoing operation of the legacy Olympic venues, which has been a model to the world.
Overspending? Not on our watch. We counted every penny and still delivered incredible Games.
We formed an Olympic Exploratory Committee in October of last year that conducted significant work in examining the question of hosting again from just about every angle. We developed a comprehensive report, including a thorough budget I personally oversaw. In addition, while our focus was not on economic development, section 8.3 of our report cites Natalie Gochnour of the Kem C. Gardner Policy Institute, who completed a study on the economic impact of the 2002 Olympic Games, which was estimated at $6 billion. This stands in stark contrast to what Mr. Evensen cited.7 comments on this story
When we look back on 2002, we see an Olympics that had a $100 million operating surplus, an economic impact of perhaps $6 billion, an incredible legacy of active venues for use by our community and aspiring Olympians, and memories for a lifetime. Going forward, Salt Lake City is in a completely different position than any other city in the world to host an Olympic Winter Games. We have all the key elements already in place, with a modest budget requiring no state and local funding, while having the opportunity to extend and expand our legacy. But more importantly, our community came together in 2002 to welcome the world in a celebration of sport and unity. It was magical. We now have the opportunity to host the world again and expose a new generation to the experience of a lifetime.