Hosting the 2012 Olympic Games will cost London an estimated �1.796bn.
Where will the money come from, and how will it be spent?
Consultants Arup recently published a report analysing the financial implications of the bid.
They say the Games would bring in about �1.3bn in direct revenue. That includes about �864m from ticket sales and a contribution from the International Olympic Committee. The other �430m would come from selling land no longer needed after the Games. Arup says the Games would cost �779m to put on: �403m to build new facilities, �325m to buy land in East London, �167m investment in athletes to boost medal chances and �109m risk money.
If the bid goes ahead it will cost about �13m, with the government weighing in with �6m and the rest coming from private sponsors. Assuming those figures to be correct, Arup estimates the maximum funding the government would have to spend if the Games were to go ahead as risk money would be �494m. The risk funding would be used to bridge any gap between cost and income.
Arup believes that if the Games come to London they would generate significant revenues. Additional tourism could generate up to �610m and the tax yield from 9,000 new jobs could see the Games make a profit of �82m. Sydney made a profit of �3.3bn in 2000.
In addition the European Union could provide up to �1bn because the project would help regenerate run-down areas. 
MMIX
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