When Italy lit its Olympic flame on February 6th, it signaled the start of the long-awaited Milano-Cortina 2026 Winter Olympic Games. The torch has since been blown out. Athletes have gone home, the venues have gone quiet, and what remains is the thought of what these games actually delivered. Shaped by a narrative of “sustainability” and “flexibility,” rooted in the IOC’s Olympic Agenda 2020+5, which ended March of 2025, casting Milano-Cortina as a potential blueprint for future Olympic reform. The need for that reform was well established: for decades, Olympic host cities have suffered from the ‘winner’s curse’, a stark irony in which securing the bid left cities economically or socially worse off than if they had lost. For the first time in Olympic history, the games officially took place in two host cities, Milano and Cortina, supported by two regions (Lombardia and Veneto) and two autonomous provinces (Trento and Bolzano/Bozen). This multi-regional, cooperative model spanned a broader alpine region and stood in stark contrast to Montreal’s 1976 Olympics, often characterized by “space-age fascist” monumentalism and fiscal catastrophe. The 2026 Games aimed to break that cycle, but whether the same mechanisms that nearly broke Montreal had truly been left behind was another question.
Was the ghost of Montreal lurking in the Italian Alps?
In 2009, The National Bureau of Economic Research trademarked the “Olympic Effect,” one finding that the act of Olympic bidding, rather than hosting, predicts a 30% increase in national trade. While this statistic is frequently criticized for its age, bidding behavior has suggested its relevance has not diminished. Tokyo reportedly spent roughly $75 million USD to secure its successful 2020 bid and $150 million on its failed 2016 bid. Similarly, Jean Drapeau’s 1970 victory over Moscow and Los Angeles to secure Montreal’s Olympic bid functioned as a powerful signal: That Quebec’s bilingual province was ready to move from a national to a global stage. Yet it is precisely this desire to signal international openness, at any cost, that transforms the bidding process into a competitive auction, where cities promise the most extravagant and prestigious Games. Bids inflate, ambitions outpace budgets, resulting in inevitable cost overruns. Milano-Cortina’s bid, however, adopts a lens of fiscal transparency and democratic consensus, sharply distinct from the autocratic signaling of recent Games such as Sochi or Beijing. This bidding framework reflects a historical awareness of the financial burdens imposed by the pursuit of lighting an Olympic torch, one that fueled the burning money race of sporting prestige.
Montreal’s 1976 Summer Olympics approximately cost 1.21 billion CAD. Some argue these “costs” were actually accelerated infrastructure investments, including metro extensions and roadways that enabled long-term urban utility. Yet, etched into Montreal’s skyline is a “White Elephant”: the Olympic Stadium, or the “Big O”, stands as a lasting symbol of financial instability. Its suspended roof failed to meet engineering expectations, leaving the stadium structurally vulnerable and unusable under less than 3cm of snow. More broadly, specialized Olympic facilities have come to symbolize the long term maintenance burden faced by host cities long after closing ceremonies. In contrast, Milano-Cortina is taking a different approach; Olympic sustainability reports advised the use of existing facilities, heeding the lessons of Montreal’s 40 year debt hangover and the global consequences of Olympic overbuilding.
Can any host country’s finances earn a gold medal?
Historical data suggests not. Every Olympic Games since 1968 has exceeded its budget, with Montreal alone experiencing a thirteen-fold cost overrun. Milano-Cortina is not immune to this risk. In auction theory, the “winner” is often the bidder who most systematically overestimates an asset’s value. Montreal’s post-olympic fiscal downturn coincided with a broader economic shift, as Canada’s financial capital migrated from Montreal to Toronto following passage of Bill 101. While the Olympics did not cause this shift in isolation, the games amplified a multi-billion-dollar reallocation of over 300 companies. In this way, Montreal’s 1976 games will remain a historical event that illustrates how failed Olympic policy can permanently alter regional economic power.
Milano-Cortina’s Olympic bid of $1.5 billion USD has reflected an effort to counter this historical trend. Its operating budgets provided incentive for the IOC to pick Milano-Cortina as host with budgets reportedly 20% less than the two previous Olympic bids. However, it remains a question whether a dual-city model can truly offset the distributional consequences of winning the bid. Even with reform, the cost of signaling must remain sufficiently high to remain credible. If hosting becomes too inexpensive, it risks losing the prestige and predictive power that underpins its role as an indicator of trade liberalization and global openness.
The Olympics remain the microcosm of the world, whose villages, athletes, and rings symbolize unity in a deeply divided era. If the Milano Cortina sustainability model succeeds in avoiding previous financial trends, it may signal a new era of cooperative global engagement. Montreal, after all, did not remain indebted forever, retiring its Olympic debt in 2006 and reinventing itself as a capital of culture and diversity. The deeper lesson from Milano-Cortina is not simply that natural landscapes can substitute for concrete monuments, but that the bidding process itself can be reformed.
We can learn from Milan that cities need not auction away their financial futures to prove their readiness for the world stage.
And, If that reform holds, the winner’s curse may finally be what gets left behind in the Alps.
