The Games of the 27th Olympiad

Recently we found ourselves reading a most fascinating book on the bid that Australia made for the 2000 Olympic Games.

To this parochial observer it was one of the greatest sporting event ever staged.

(This official historical summary brings back so many good memories of 16 days of magic)


The endorsement of a National Olympic Committee is required by the Olympic Charter in support of a city’s bid for the Games.

The contract for the endorsement of the Australian Olympic Committee for Sydney’s candidature for the Games was signed by the President of the Australian Olympic Committee, the Mayor of Sydney and the Premier of New South Wales on Wednesday 1st May 1991.

Sydney won the right to host the Games on Thursday September 23rd 1993 after being selected over Beijing (by two votes), Berlin, Istanbul and Manchester in four rounds of voting at the 101st International Olympic Committee (IOC) Session in Monte Carlo, Monaco.


In 1999, the New South Wales Audit Office (an independent body that reports directly to the Parliament) reviewed the processes used in the preparation of the estimates (of costs and revenues) to host the Games. The review also commented on certain risks to the success of the Games.

It noted that “risks may arise as a direct result of hosting the Games for example, disruption to the Games because of world events such as war, or the level of an ongoing risk may increase for example a transport failure, because of the Games.”

The staging of any Games was considered to impose additional risks to Government, its agencies and the population over and above “normal” risk that exists in a non-games period.

These extra risks were likely to arise because of more intense operating conditions, more resources in use, more activities being undertaken and to some extent the inexperience of personnel engaged in the delivery of the Games and associated logistics.

The significant but temporary increase in the population of Sydney was seen as bringing an added pressure to service delivery.

Law enforcement agencies for example, were expected to be under pressure to manage responsibilities associated with the Games and the intake of visitors and at the same time to maintain community policing.


The New South Wales Government guaranteed to underwrite the cost of staging the Sydney 2000 Games.

The guarantee referred to the revenues and costs of the Sydney Organising Committee for the Olympic Games (SOCOG) and games related costs incurred by other agencies of the Government.

The guarantee was given by the then Premier of New South Wales as part of Sydney’s bid in a letter to the president of the IOC.

Apart from cancellation of the Games, harm to the Olympic Family and terrorism, the main exposure in underwriting the cost of the Games was seen as budget reliability.

The main risk management technique used by the Government and SOCOG to control these exposures was a regular and rigorous budgeting process combined with a transparent approach to monitoring the achievement, or otherwise, of the revenue and expenditure streams.

SOCOG had assessed its risk exposure based on a probability model that identifies weighted operating risks, macro economic exposures and the operational contingencies of staging the Games.

SOCOG adopted an incremental or staged approach to insuring its exposure to risk. It had insured risks in regard to its buildings, public liability, workers’ compensation and some specific test events and supporting equipment.

SOCOG had entered into contracts with overseas companies and received revenue from and incurred expenditures with those companies denominated in currencies other than the Australian dollar.

Most significant were SOCOG’s revenues from broadcast rights and the IOC international marketing program which were denominated in US$. Broadcasting rights revenues alone amounted to over $1b.

To meet this risk the Government gave a guarantee on exchange rates in regard to revenues receivable by SOCOG of up to US$737m

The Audit Office noted that “risks created by the Games are significant, diverse and complex.”

It concluded that the Government, through its agencies, was managing those risks in a reasonable way even though “certain risk have not been quantified.”

SOCOG’s response to this was:

it should be noted that it is not feasible to quantify and include all risks associated with the Games. Some risks are extremely remote. (We) will, when financial risks appear likely to be realised, update estimated costs on an ongoing basis.

As a bit of auditing trivia – SOCOG’s auditors were Arthur Anderson.

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