Salt Lake Winter Games Turn a Profit
The 2002 Winter Olympics in Salt Lake City generated a whopping $56-million overall surplus, organizers will announce today, testament to first-rate organizational and logistical plans and a vivid reminder of the financial possibilities inherent in staging the Games in the United States.
The net surplus, $40 million, will be divided two ways. Most of the money, $30 million, will go to the nonprofit Utah Athletic Foundation, which oversees facilities built for the Salt Lake Games. The rest, $10 million, goes to the U.S. Olympic Committee.
Salt Lake Organizing Committee officials also intend to spend $6 million on local park-related projects, and Mitt Romney, the outgoing chief executive officer, recently ordered the committee not to draw down $10 million in federal funds long ago appropriated--in effect giving that money back to the U.S. government.
The Salt Lake surplus underscores the unique nature of the U.S. method of staging the Games, which relies on a partnership between government and a privately run organizing committee.
Three times since the 1980s--Summer Games at Los Angeles in 1984 and Atlanta in 1996, and now Salt Lake in 2002--the U.S. has played host to the Olympics. Each time the organizing committee has finished in the black.
The L.A. Games registered a $232.5-million surplus. Forty percent of that money went to the Amateur Athletic Foundation, which has since given out millions in grants to youth and community sports activities.
The 1996 Atlanta Olympics ended with a slight surplus, about $10 million. Atlanta’s legacy, however, includes a stadium built for the Games and then reconfigured afterward for baseball, both at organizing committee expense.
The Salt Lake surplus is all the more remarkable because only three years ago, when Romney took over, in the midst of the worst corruption scandal in Olympic history, SLOC faced a considerable budget shortage. Salt Lake won the Games after wooing IOC members with more than $1 million in cash, gifts and other inducements.
A venture capitalist, Romney balanced the budget by cutting millions--eliminating all items deemed nonessential--and relentlessly wooing sponsors. Much of the surplus, $47 million, came from a contingency fund that largely went untouched during the Games. Another $3 million came from interest savings on bonds. SLOC recorded $6 million more in excess revenues, largely from booming ticket and merchandising sales.
“I think people just wanted to be part of the Olympics,” Romney said last weekend at a USOC meeting in Boston. He is now the Republican candidate for governor of Massachusetts and will resign his SLOC position today.
The U.S. model stands in contrast to that of Olympic hosts elsewhere, where local, regional or national governments often assume the role of the organizing committee. The Sydney 2000 Summer Games, for instance, were essentially run by the New South Wales state government. Earlier this month, the Sydney organizing committee announced it would finish with a $51-million loss after accounting for a $90-million payment to the Australian Olympic Committee for a fund supporting athletes.
The Olympic Games will not return to the United States until at least the summer of 2012. With four U.S. cities vying for those Games--New York, San Francisco, Houston and Washington--USOC President Sandra Baldwin noted, “We are the only country that consistently has made at least a small surplus on every Games we’ve held.”
U.S. chances of hosting the Games in 2012 depend on a variety of factors--among them, whether Vancouver wins the 2010 Winter Games. Games in Canada then would diminish U.S. chances in 2012. The International Olympic Committee will pick the 2010 site next year, the 2012 city in 2005.
Francois Carrard, the IOC’s director general, declined to comment Tuesday on U.S. chances. But he observed, “The fact that [the Salt Lake] Games went extremely well is certainly a very positive note for the future of Olympism in North America.”
The IOC was entitled to $4 million of SLOC’s surplus. It donated its share to the Utah Athletic Foundation, bringing the foundation’s total to be announced today to $30 million.
Carrard said, “It was absolutely natural to express our gratitude.”
The $30 million raises the foundation’s endowment to $70 million.
A few weeks ago, SLOC had delivered $40 million from a legacy fund built into its budget. Utah officials aim to promote Salt Lake as a premier winter-sports training base.
SLOC’s $56-million overall surplus, on revenues of $1.274 billion, does not take into account the considerable role taxpayers play in staging a U.S. Games.
For instance, security costs for the Salt Lake Games, much of it picked up by taxpayers, totaled more than $300 million.
The U.S. government provided nearly $400 million in direct funding for the 2002 Games; the state of Utah put up another $225 million. In all, the Games cost about $1.9 billion.
Some say the Olympic accounting should also include indirect costs, specifically an additional $1.1 billion in government funding allocated to highway and rail projects in and around Salt Lake that would have been done regardless of the Olympics but were accelerated because of the Games.