Cost-benefits of sporting events

Cost-benefits of Sochi StadiumsThinking about the cost-benefits of sporting events…Just looking at sports-related spending alone, the cost of the Sydney Olympics was $4.2B. The London Olympics have been estimated at $14.8B. The equivalent figures for the winter olympics in Sochi are more than 3 times London and 12 times Sydney. It just keeps snowballing, if you follow the drift.

These mega-projects are often driven by political objectives. The tangible benefits accrue to a relatively small group of well-organised interests. However, the costs and risks are spread across a much larger number of tax payers.

How would these events change if the interested parties were funding them?  How well are the benefits estimated and are they tracked. The Business Cases would make interesting reading.

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2 comments on “Cost-benefits of sporting events
  1. Andrew B says:

    I refer you to this item, People can draw their own conclusions.

    My expectation is that such large activities are beyond benefit estimation / realisation models and are in a category of their own, ie “nation building”, “city defining” etc, ie political will.

  2. darilyn says:

    Thanks, that’s a great link and I think it strengthens the point made.
    It is critical that endeavours requiring such a large commitment of taxpayer funds are subjected to benefits management practices. I think you are saying that “nation building” or “city defining” is a non-tangible or non-quantifiable benefit. This is often used as an excuse for not doing a proper Business Case.
    Value management techniques can be used to assess whether we will achieve a return,and more importantly, whether it is worth the investment, compared with competing demands on funds. With value management (an aspect of benefits management) we can compare initiatives that offer financial and non-financial benefits. Using such an approach, we would define what we mean by “nation building” and derive measures from that. For example, will successful nation building result in more tourism, higher long-term employment rates, more housing availability, greater public transport capacity (and demand) and so on. Once we have defined what we mean by these generic terms, it turns out that they are often measurable.
    It is not unreasonable to track these measures and the extent to which the mega-project contributed and decide whether we got benefits expected. That’s what the benefits estimation and realisation models are all about.

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