THE WINNER ’ S CURSE : Why is the cost of sports mega - events so often underestimated ?

Grenoble taxpayers were not very happy to pay local taxes up to 1992 for covering the financial deficit from the 1968 Winter Games! The 1976 Summer Olympics in Montreal outperformed Grenoble Winter Olympics in terms of deficit: the latter was so deep that Montreal taxpayers had been repaying the debt until 2006, for thirty years. After Montreal's financial mess, the number of candidate cities wishing to host such sports mega-events dropped, and since the 1984 Games in Los Angeles the watchword of local Olympics organizing committees (LOOC) and the IOC became “the Games will pay for the Games”. Such watchword was incentive enough to trigger a new increase in the number of candidates to host the Olympics but not enough to cure the financial mess disease. After having claimed for seven years that the Games will pay for the Games, the 1992 Winter Olympics in Albertville resulted in a $ 60 million deficit 2 . Were those three exceptions proving the rule that sport mega-events usually are organised at a reasonable and correctly anticipated cost? Unfortunately it is not so. In the same vein, when the 2012 Summer Games had been allocated to London in July 2005, the expected and advertised cost was in the range of £ 2.4 billion. By the end of 2008, the cost estimates ranged from £ 9.4 billion to £12 billion. Some press articles have suggested that the promoters of London candidature had deliberately underestimated the Olympics bill in