What do you think about $380m for noping out of the Commonwealth Games

It is simple math, the penalty for not hosting vs the cost of hosting. It seems thing was going to have a negative cost much more than the penalty so they decided to withdraw. People who are angry are thinking with their heart, not their head (or will just whinge about anything)

The people complaining are the same ones that would be angry if the games went ahead and cost $7 billion.

The confidentiality clause is an absolute disgrace, and anyone who isn’t suspicious should be. This is a fine over a sporting event, not something related to national security. Plus, it’s PUBLIC MONEY. Confidentiality clauses shouldn’t even be an option.

They might as well end the press conference with your high school bully saying “there’s nothing shady going on here, I swear. Trust me, bro.” It would have the same air of legitimacy.

Having said that, by pulling out of hosting the games and agreeing to pay a massive fine, I think they picked the lesser of two evils. Sorta.

Whether you like Dan or not I think this is the correct call. I believe Dan was counting on some federal funding to make this happen and that Albo probably pulled it in favour of a surplus.

So instead of spending the extra couple of billion, we would also need to spend the couple of billion we should have gotten federally and we got screwed instead.

On that though, I think Dan needs to appoint a successor and plan to retire.

Whether you like Dan or not the original decision to sweep in like a hero and host the games was a reckless political play that's cost us dearly.
- He committed to it how many years ago?
  It's actually a great idea if it weren't for the financial crisis were in. It should have been an opportunity to bolster regional areas in a non sports rort way.
Victorian Labor has a nasty habit of signing up for things they can’t afford, and then hoping the federal government foots the bill.
Also, this should really put into perspective how small the $5M settlement for COVID lockdown is in the scale of things.
- Im sure they actually discussed it beforehand, no hoping here.
  And it was affordable until inflation and crippled building industry kicks in.

I posted this a while ago - it's about the olympics but I think a lot of the conclusions are relevant. Personally I back the logic of a known loss now, rather that doubling down and facing an uncertain and likely worse loss during an already difficult time.

https://www.cfr.org/backgrounder/economics-hosting-olympic-games

It sucks about the withdrawal fine but if it stopped greater expenditure… I think there’s a lot of core things that could more urgently use the money

First time someone's ever pulled out in regional Victoria.

but then I think sunk cost fallacy

It's important to remember precisely what the sunk cost fallacy means, because it's not necessarily completely intuitive.

The sunk cost fallacy requires you to ignore any time or money already spent. But you still evaluate any potential future costs compared to the benefit.

With any event like the Commonwealth Games there are obviously non-financial aspects, but for these purposes we can either ignore them or assume they have been somehow quantified and put into a dollar-equivalent figure.

So the calculation to decide whether or not to keep the Commonwealth Games going is:

Take the cost of continuing to host them (building infrastructure, etc.). Ignore any already-spent money. Call this C₁.
Take the cost of not hosting them (the $380 MM compensation, plus intangibles like reputational damage, etc.). Call it C₂.
Take the benefit of hosting them (direct income from tourism, health benefits from increased sporting participation, plus any intangibles). Ignore any benefits already locked in, like infrastructure that has already been built or is going to be built regardless. Call it B.

Note that because it's politicians making this decision, they'll also be factoring in the political optics into this decision. If they think most Victorians don't want the Commonwealth Games, that would be an increase to C₁ (the cost of hosting the Games is increased as people think your Government is out of touch and count that against you). Some Victorians might also be in favour of hosting them, which would be an increase to B.

Then you just evaluate:

B > C₁ - C₂

If that's true, keep the games. If it's false, cancel them.

Note that at day-0 (before signing on to the games) C₂ would be 0, so you would be doing a simple "are the costs of hosting them bigger than the benefits we'd get?" But since some obligation has already been entered into, there is a higher hurdle to cross before it makes financial sense to cancel them. Note also that it means if the cost of pulling out was greater than the cost of continuing on, the right-hand-side of the inequality would be negative, and thus even if there were zero benefit, it would still be worth doing. Imagine, for example, if the charge for pulling out was some nonsensically high value like $100 billion.

So, I'm an American and I'm trying to figure out what's going on here. Let's see if I get this right, the Commonwealth games are basically a mini-olympics held among former British colonies + uk (and minus USA). Victoria, AUS was supposed to host it, however due to increasing costs, Victoria had to back out. Because Victoria has decided that it'll cost to much for them to build the facilities to host the games (because Victoria is paying for this, not Commonwealth Games), they are now being fined? So Victoria is spending all the money here, and then when they decide they don't want to spend the money after all, they're getting fined? That seems kinda bullshit. I mean, I know there's a cost associated with relocating the games, but it's not like they (the Commonwealth games) were the ones paying for the venues and whatnot, am I correct?

The fine's kinda bullshit, kinda understandable. It takes a lot to get these games into place, and vic was chosen over other bidders, only to turn around and say fuckoff. So i get why they have fines as a concept
But this was immediately snapped up by qld, and it was bailed on due to clear financial logic and Covid has also happened so fuck off with your fines. Extraordinary circumstances.
- this was immediately snapped up by qld
  One Mayor in Qld immediately proposed snapping it up. The Premier, Prime Minister, and the other Qld mayors made it very clear that this was not going to happen, or at least would not happen with their support. The rest of SEQu is already focussed on the 2032 Olympics.
  As of right now, the 2026 Commonwealth Games do not have a host.
It's quite simple. They signed a contract with the Commonwealth Games Federation. Now they want to back out of that contract. Backing out of a contract usually means incurring some sort of penalty.
the Commonwealth games are basically a mini-olympics held among former British colonies + uk (and minus USA)
It's for members of the Commonwealth of Nations, not all of which are former colonies. The United States of America isn't a member of the Commonwealth and therefore isn't invited to participate.
Most contracts have terms for non performance of the contract.
It's no surprise. They made that decision to pull out knowing it would cost a bundle in compensation. And it's (allegedly) still saving billions.

While I enjoy the Commonwealth/Olympics Games, I think that pulling out is the best thing for us (heh) because just how much money government bodies sink into these games with us getting nothing out of it. Sure there might be more tourism, but so many buildings built for these games just become decrepit and unused. So while it does foster comraderee and tourism, in the end it'd be such a waste. And with our cost of living crisis and other crisis' post-Covid, it just feels like... a waste.

Every country is fighting for the Olympics or Fifa ecause it's rife with corruption. It's not our fault the commonwealth games is not corrupt enough to happen here.