SBJ/20090907/This Week's News

Tab for Chicago ’16 bid near $50M

The price tag to bid for an Olympic Games continues to escalate.

Chicago has spent $48.2 million on its bid to host the 2016 Olympics — 37 percent more than the $35 million that The New York Times reported New York spent in 2005 on its bid for the 2012 Games.

The cost of Chicago’s bid between July 2006 and June 30, 2009, was disclosed last week in a Stewardship Report released by bid organizers. Organizers raised $72.8 million to cover expenses through private contributions. Chicago expenses are expected to increase over the last month of the bid. The International Olympic Committee will select the host of the 2016 Games on Oct. 2 in Copenhagen, Denmark.

Chicago 2016 major cash expenditures
July 2006 through June 30, 2009
Expenditure Amount
Salaried employees and contractors $9,471,822
Employee benefits $1,089,275
Olympic Games venue and operation experts $4,651,636
International relations $3,017,037
Public relations $1,147,348
Airfare and hotel/housing accommodations $2,827,399
Advertising and messaging $3,493,994
Film production $1,721,190
Merchandise $1,506,817
Event services $3,626,943
Payments to USOC $5,000,000
Total of all expenses $48,268,628
Source: Chicago 2016 Stewardship Report

The cost of bidding to host an Olympics has risen steadily since the late 1990s as a result of technical requirements the IOC endorsed in the wake of the Salt Lake City bid scandal and increased demand to host the Olympics, which cities view as a major marketing and tourism event.

“The Olympic Games are the ultimate municipal lottery ticket,” said Terrence Burns of Helios Partners, which consulted for Sochi, Russia, on its bid for the 2014 Olympics. “The global awareness, the prestige and the Olympics’ ability to accelerate existing or planned infrastructure development is unequaled by any other event. The larger the prize, the more expensive it is to play.”

The greatest expense for Chicago’s bid was concentrated on subject matter experts, firms and individuals with technical expertise in areas such as international relations and venue development. Chicago spent approximately $11 million on those experts “to ensure [the] bid is technically and operationally sound.” Among those experts, the biggest recipients were public relations firm Hill & Knowlton ($3.1 million), architecture firm Skidmore, Owings & Merrill ($1.2 million) and HOK Sport Facility Group (now Populous) ($1 million).

Staff compensation was the second-greatest expense. Chicago spent $9.4 million on employees and contractors. Approximately 10 employees were paid more than $100,000, including Chief Operating Officer Dave Bolger ($300,000), President Lori Healey ($250,000), Chief Bid Officer John Murray ($250,000) and venues and operations expert Doug Arnot ($250,000).

The organization spent $9.2 million on outreach to promote its bid. The largest expenses in that category included advertising ($3.4 million), event services ($3.6 million) and film production ($1.7 million).

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