The cost of hosting the Olympics should perhaps include the induced subsidy to produce a high medal count.
The government has said it will provide the first £20m of the £80.1m earmarked for elite British athletes competing at the London 2012 Olympics. The £20m is the first installment on a funding package that runs from 2009-2013.
As to the remaining £60m the government is still hopeful that some of it can be raised through fundraising via the recently launched Medal Hopes plan. Given the current economic climate this seems unduly optimistic.
I'm not sure if Government promises spur private contributions or crowd them out. Might make for an interesting cross-country comparison. Here's more on the somewhat controversial British plan.