The Olympic ledger has changed: A structural shift in the economics of mega-events

An Olympics Split in Two

The 2026 Milan and Cortina d’Ampezzo Winter Olympics have not yet opened, but they have already set a record in Olympic history: this is the first time two cities have jointly hosted. But what deserves attention is not this “first” itself, but the methodology behind it. Preparations explicitly focus on long-term infrastructure and cutting unnecessary costs; materials from Paris 2024 are partly reused, and even medical equipment has entered the reuse list; even when construction delays occur, the direction of cutting spending has not changed.

These arrangements look like technical project-management choices. Seen over a longer time horizon, they are a phase outcome of a fiscal reckoning that has lasted nearly half a century.

From National Showcase to National Debt

For most of the twentieth century, hosting the Olympics was a burden for wealthy countries, not an opportunity for developing countries. The Games were concentrated in Europe and the United States; before the television broadcast era, hosts did not expect to profit, and public finances bore the costs, because large economies and mature infrastructure were able to absorb them.

The 1970s were a turning point. The scale of the Olympics expanded rapidly; in the 1960s the number of events increased by about one third, and the number of participants nearly doubled compared with the early twentieth century. At the same time, the shooting of protesters by security forces before the Mexico City Olympics and the terrorist attack on Israeli athletes at the Munich Olympics damaged the Olympic image, and public skepticism about taking on debt to host the Games rose. In 1972, Denver became the only chosen host city in history to refuse to host after winning the bid—a local referendum rejected additional public spending.

The 1976 Montreal Olympics became a symbol of financial risk. A budget estimate of $124 million differed from actual spending by billions; construction delays and cost overruns on the new stadium saddled taxpayers with about $1.5 billion in debt, which was not paid off until 2006. The stadium is still known as “Big Owe” today; in 2024 the Quebec government announced it would spend $870 million to replace its rarely used roof for the third time, while critics argued for demolishing it outright.

Los Angeles 1984 was the opposite case. As the sole bid city, it was able to negotiate extremely favorable terms with the IOC, relied almost entirely on existing venues and infrastructure, and, combined with the surge in television broadcast revenue, achieved an operating surplus of $215 million.Success brought a boom in the bidding market: two cities bid for the 1988 Olympics, rising to twelve by 2004. The IOC could therefore pick the “most ambitious” and most expensive bids. Researchers Robert Baade and Victor Matheson point out that after 1988, the number of bids from developing countries more than tripled—China, Brazil, Russia, and others were eager to use the Olympics to show the world their progress. What followed was a leap in the scale of the bill: the Sochi 2014 Winter Olympics cost more than $50 billion, about 85% of which went to building non-sports infrastructure from scratch; Rio 2016 cost about $20 billion; Beijing 2022 was estimated by Business Insider at $39 billion, while China’s official figure was $4 billion.

This disparity in the figures is itself part of political economy. When a project simultaneously performs the functions of diplomatic signaling, industrial mobilization, and social integration, cost accounting ceases to be an accounting problem and becomes a narrative problem. The tension between auditing and presentation means that public accounts are destined to be incomplete.

White Elephant Assets and the Temporal Politics of Debt

The ongoing costs after the Games are often discussed less than construction-period spending. Sydney’s Olympic Stadium costs about $30 million a year to maintain. Beijing’s “Bird’s Nest” cost $460 million to build and about $10 million a year to maintain; it sat idle for most of the time after 2008 and was not used again until the 2022 Winter Olympics. The venues built for the 2004 Athens Olympics have been almost entirely abandoned, and their expense is widely believed to have helped fuel Greece’s debt crisis.

Among operating costs, security is the fastest-rising item. After 9/11, Sydney’s $250 million in security spending for 2000 jumped to more than $1.5 billion for Athens in 2004, and afterward remained in the $1 billion to $2 billion range for a long time. Tokyo reportedly spent about $2.8 billion on pandemic prevention alone during the pandemic.

The hidden costs in the economic sense are more critical: the opportunity costs of funds that could have been used for other public priorities, and the decades-long squeeze that post-Games debt places on fiscal budgets. This is a temporal mismatch—benefits are concentrated around the event, the bill stretches decades into the future, and electoral cycles and debt-servicing cycles never align. Montreal took nearly three decades to pay off its debt, while Athens embedded an Olympic Games in the trajectory of a sovereign debt crisis.

The Failure of the Bidding Market

In 2019, the IOC reformed the bidding process, attempting to lower bidding costs, lengthen the bidding cycle, and relax geographic requirements, allowing multiple cities, multiple states, or even multiple countries to co-host. But in the subsequent cycles, bidders did not return. In 2021, Brisbane won the right to host the 2032 Summer Olympics without competition—the first time since Los Angeles in 1984.From a market structure perspective, this is a classic clearing failure: the supply side lowered its price and threshold, yet the demand side remained absent, indicating that the value proposition of the “product” being sold is itself outdated. The problem is not how much the IOC charges, but that the returns promised by hosting rights are no longer credible.

The Devaluation of Global Visibility

The real structural change is that what the Olympics sells has changed. It used to trade in scarce global attention. In the television era, there was almost no substitute for a city being seen by billions of people worldwide within a few weeks. Deficits could therefore be rationalized as brand investment, and that investment had clear political returns.

Today, the supply of global visibility has exploded. Social platforms, streaming, transnational sports leagues and major performances, cities’ own digital marketing channels, and the natural exposure brought by corporate supply chains are all diluting the marginal value of “being seen by the world.” When a country’s presence can be acquired through trade, technology exports, or capital markets, the premium on a national showcase declines.

At the same time, advanced economies have narrower fiscal space and rising demographic pressures, and the priority of public spending is shifting from symbolic capital to maintaining existing capital; emerging economies’ motivations are also changing—first-generation showcase infrastructure has already been built, and the marginal returns on continued additional investment are declining. With both sides receding at once, the bidding market naturally cools.

Distributed Hosting and the Restructuring of Infrastructure Logic

Two-city co-hosting and material reuse point to a new organizational model: downgrading the Olympics from a one-off peak investment to a service load that an existing urban network can bear. This aligns with the broader direction of global infrastructure investment—from building new mega-projects to renovating, reinforcing, and digitizing existing assets.

This may lead to three consequences. First, the upper limit on the scale of the event is compressed, the spectacle effect diminishes, and the IOC’s revenue model centered on broadcasting rights will come under pressure. Second, regional joint hosting may become the norm; it will redistribute the domestic geography of investment and attention while creating new coordination costs—the construction delays in Milan and Cortina are already a signal. Third, the criteria for evaluating inter-city competition change: victory no longer depends on who builds bigger, but on who can organize more credible delivery on existing assets.

A Colder Olympic Era

The Olympics will not disappear, but its function as a “certificate of national development stage” is receding. What remains is a technical competition over delivery capacity, fiscal discipline, and urban governance.

Montreal took nearly thirty years to pay off its debt; Athens used one edition of the Games to accelerate a debt crisis. What Milan and Cortina are attempting is to downgrade this spectacle—not downgrade it to unimportance, but downgrade it to affordability. In a world where fiscal constraints and geopolitical competition are tightening at the same time, this may be the only sustainable form for major events.