Before settling into my sofa for a couple of weeks of watching the athletes slip and slide through Winter Olympics from Pyeongchang, I need to confess that the Games are a highly questionable economic proposition. One vivid illustration is that the $100 million new stadium in which the opening ceremonies will be held is going to be used four times in total–opening and closing of the Winter Olympics, opening and closing the Paralympics next month–and then it will torn down. Andrew Zimbalist goes through the issues in more detail in Tarnished Gold: Popping the Olympics Bubble , which appears in the Milken Institute Review(First Quarter 2018).

Building new facilities (or dramatically refurbishing older ones) is a major cost for the Games. Zimbalist notes that the previous Winter Games in 2014, “the IOC embraced an ostentatious bid from Sochi for the 2014 Winter Olympics where almost none of the required venues or infrastructure were in place. It became the most expensive Olympics in history, with Russia ponying up between $50 billion and $67 billion — though how much of that actually went into construction and operations is unclear.”

As it has become abundantly clear that that direct revenues that a host city receives from the Olympics–for example, revenues related to tickets and television rights–typically cover only about one-third of the costs of hosting, fewer cities are bidding to host the Games.The 2022 Winter Games came down to two bidders, Beijing in China and Almaty in Kazakhstan. Beijing “won,” as Zimbalist describes:

“The Beijing organizing committee pitched its bid to the IOC by noting that it would use some venues left over from the 2008 summer Olympics. But China went along with the IOC’s penchant for creative accounting by excluding the cost of the high-speed railroad that will link Beijing to the downhill and cross-country ski areas (54 miles and 118 miles from the capital, respectively). That project will run to about $5 billion and have little value to the region after the Games are over.