Jul 30, 2021 · 17m · founders-journal
4 Business Lessons from the Olympics
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Alex Lieberman breaks down the staggering economics and budget overruns of the Olympic Games, using the structural failures of host cities to derive four essential business lessons on optionality, expectation setting, incentive alignment, and marketing attribution.
Statements from this episode (9)
Every Olympics since 1960 has exceeded its projected budget
“Every Olympics since 1960 has run over budget by 172% on average, and no Olympics, zero, zilch, have ever run under budget.”
Olympics have the highest average overruns of any global megaproject
“The Olympics are the highest overrun on average of any mega project in the world.”
Montreal exceeded its 1976 Olympic budget by 720%
“1976 games, Montreal overspent its original budget by 720%, and the city spent the next 30 years paying off debt from those games, a lot of which was paid by taxpayers.”
Tokyo Olympic costs ballooned from $7.4 billion to over $28 billion
“Back in 2013, when Tokyo was putting together its bid for the Olympics, it originally forecasted around 7.4 billion dollars of cost for the games. But today, officials say the true budget is somewhere around 15.4 billion, and government auditors are actually p…”
Only one city has ever walked away from hosting the Olympics
“There's actually been one city in the history of the Olympics that did walk away from the Olympics, but other than that, it's never been done.”
Olympic host cities are legally obligated to cover all cost overruns
“Also, unlike other projects, say, in construction, host cities are literally legally obligated to cover the cost of overruns. They don't have an option.”
83% of Japanese residents opposed hosting the Tokyo Olympics
“You know, just using Tokyo as an example, 83% of people who live in Japan believe the Olympics should not take place in the country.”