Every four years, there’s always some global sporting extravaganza happening. Whether it’s the Summer Olympics or the World Cup, all eyes are on the host country or city. This year, it’s the turn of the Winter Olympics to hog the limelight. Hosting one of these major events is always prestigious, but as many of us are probably aware, it can also be a massive drain on public finances.
The Milano Cortina 2026 Winter Olympic Games have just concluded. According to reports, the total projected costs, including infrastructure, are expected to reach between €5.7 billion and €6.7 billion ($8.5 billion and $10 billion). Host country Italy expects to generate roughly €5.3 billion through tourism and immediate spending. That’s a shortfall, and no one will know the true benefits for a few years.
So, here’s a quick look at how much it really costs to organise a Winter Olympics and whether it’s worth investing in for the host countries and cities.
Real Price Tag Of Winter Olympics
Understanding Olympic costs requires distinguishing between operating budgets and total costs. The operating budget covers organising the actual Games, including venue management, ceremonies, and day-to-day operations. Total costs include everything else: building new facilities, upgrading infrastructure, constructing roads and rail lines, security, and long-term maintenance.
For Milano Cortina 2026, the operating budget is approximately €1.7 billion. But Italy’s total investment reached closer to €7 billion when you include infrastructure projects like upgraded transport systems and renovated sporting venues. This pattern repeats across Olympic host cities because whatever gets announced as the budget is rarely what gets spent.
The 2014 Sochi Winter Olympics represents the extreme end of Olympic spending. According to a study on hosting the Olympic Games, by the Council on Foreign Relations, Russia’s total costs reached approximately US$55 billion when it hosted the Winter Olympics in Sochi in 2014. That made it the most expensive Olympics in history, summer or winter. Originally budgeted at US$12 billion, costs increased 4.5 times from the initial estimate. Of that US$55 billion, about US$16 billion were sports-related costs, with the rest going to infrastructure and regional development.
Meanwhile, Beijing’s 2022 Winter Olympics reportedly cost around US$39 billion, though China claimed the figure was only US$4 billion. And Vancouver’s 2010 Winter Games, considered relatively modest in budget, still cost several billion dollars but turned a profit, making it a rare success story.
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Why Costs Always Exceed Budgets
Every Olympic Games, without exception, has experienced cost overruns. According to the same study by the Council on Foreign Relations, the average cost overrun for Olympic Games is 156%. Montreal’s 1976 Summer Games holds the record with a massive 720% overrun. The city took 30 years to pay off that debt. Sochi had a 289% cost overrun, while Lake Placid’s 1980 Winter Games (in the US) overran by 324%.
Several factors drive these overruns. First, bidding cities systematically underestimate costs to make their proposals more attractive to the International Olympic Committee (IOC). By the time reality sets in, though, contracts are signed, and construction is underway. That essentially makes cancelling any proposal politically impossible.
Second, the seven-year preparation period between winning the bid and hosting the Games allows that budget to balloon. Projects expand, and inevitably, security concerns escalate. Requirements are always changing. What seemed sufficient during the bid phase will look wildly inadequate years later.
Third, corruption and inflated construction costs plague many host countries. That’s no surprise in a place like Sochi, where Russian opposition figures claimed up to US$30 billion of the budget disappeared through kickbacks and embezzlement. Building anything in Russia for the Sochi Games typically costs three times more than similar facilities elsewhere – a weird anomaly that likely suggests massive graft.
The Revenue Side Of The Equation
Host cities generate revenue through several channels. Broadcasting rights bring in substantial money while ticket sales contribute additional income. Corporate sponsorships help fund operations, and tourism spending during the Games will always provide a short-term economic boost.
For Milano Cortina 2026, organisers expect €1.1 billion from tourist and operational staff spending during the Games, plus another €1.2 billion from continued tourism flows over the following 12 to 18 months. An additional €3 billion is attributed to infrastructure investments that may benefit the region long-term, according to a report by Banca Ifis, an Italian bank.
The problem is that even substantial revenues rarely cover costs. Research examining 43 Olympic Games and World Cups from 1964 to 2018 found that profitable events showed a conjunction of lower-than-average costs and higher-than-average revenues. Having just one without the other proved insufficient. Moreover, any profits were significantly smaller than losses from other events. Not a single event with costs above approximately US$5 billion reported a positive return on investment. This matters because modern Olympics routinely exceed that threshold.
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Only A Few Success Stories
There are some success stories, though. For example, the Los Angeles 1984 Summer Olympics marked the last time a host city turned a substantial profit without creative accounting. The city used mostly existing facilities and leveraged corporate sponsorships, finishing with a US$215 million operating surplus. As mentioned earlier, Vancouver’s 2010 Winter Games also managed profitability, though on a much smaller scale.
These successes share common characteristics. They used existing infrastructure rather than building from scratch and they also controlled costs aggressively. These Games took place in wealthy, developed nations that already had existing (and mature) tourism industries. From the get-go, they had realistic budgets to work with.
Seoul claimed a profit from the 1988 Olympics but excluded US$1.5 billion in government spending on stadiums, roads, and facilities. Including those costs, Seoul barely broke even. Then there was Barcelona – for the 1992 Summer Olympics – which also made a profit and successfully revitalised parts of the city, but benefitted from tourism growth that probably would have occurred anyway.
Bottom Line For Host Countries
The financial case for hosting the Winter Olympics is weak for most countries. According to another large scale study carried out in 2022, average losses of US$1.5 billion and negative 37% returns on investment (ROI) reflect the systematic overestimation of benefits and huge underestimation of costs.
Wealthy countries with existing infrastructure, realistic budgets, and strong tourism industries can potentially break even or achieve modest profits but that’s exceedingly rare. Los Angeles and Vancouver demonstrated that but, unfortunately, they remain exceptions rather than the rule.
For developing countries or cities requiring extensive new construction, the economics are particularly unfavourable and the debt burden can last decades. Maintenance costs for underutilised facilities drain public budgets while a lot of the time, the promised tourism boost never materialises. While it certainly offers host countries and cities a certain level of prestige, hosting an Olympic Games doesn’t tend to make much fiscal or monetary sense when looking at the data and history of hosting.
