On July 5, 2005, the mayor of London, Ken Livingstone, took up his pen to make official his city’s agreement with the International Olympic Committee. The 2012 Olympics had not yet been awarded to London—it would be, the following day—but the I.O.C. insists that candidate cities sign an official Olympic contract before the vote is taken, while all the leverage remains on the committee’s side. The contract is an epic masterpiece of micro-management. Its supporting materials, a set of 33 “Technical Manuals,” take up more than four feet of bookshelf space.

As Livingstone prepared to sign, he paused for a moment. Then he looked up at the I.O.C.’s executive director, Gilbert Felli, who was standing by his side, and said, “My lawyers advised me not to sign this contract. But I don’t suppose I’ve got any choice, have I?”

“No,” Felli answered, “you haven’t, really.”

Livingstone told me later that he had just been joking, but second thoughts would have been understandable. The full stipulations of the Olympic contract, which were made public in December 2010 by an East London activist and researcher named Paul Charman, following two years of Freedom of Information requests, contain tens of thousands of binding commitments. To comply with its terms, London must designate 250 miles of dedicated traffic lanes for the exclusive use of athletes and “the Olympic Family,” including I.O.C. members, honorary members, and “such other persons as may be designated by the IOC.” (These traffic lanes are sometimes called “Zil lanes,” alluding to the Soviet-era express lanes in Moscow reserved for the politburo’s favorite limousines.) Members of the Olympic Family must also have at their disposal at least 500 air-conditioned limousines with chauffeurs wearing uniforms and caps. London must set aside, and pay for, 40,000 hotel rooms, including 1,800 four- and five-star rooms for the I.O.C. and its associates, for the entire period of the Games. London must cede to the I.O.C. the rights to all intellectual property relating to the Games, including the international trademark on the phrase “London 2012.” Although mail service and the issuance of currency are among any nation’s sovereign rights, the contract requires the British government to obtain the I.O.C.’s “prior written approval” for virtually any symbolic commemoration of the Games, including Olympic-themed postage stamps, coins, and banknotes.

Bending Blair’s Ear

In the beginning, almost everyone agreed that it would be a terrible idea for London to host the 2012 Olympic Games. In 2002, with the next year’s 2012 bid-deadline looming, the United Kingdom’s minister for culture, media, and sport, Tessa Jowell, received a one-page memo from an aide who argued strongly against it. If London lost, the country would be humiliated. (Paris, which had lost its last two bids to host the Games, was favored to win for 2012.) If London succeeded, the costs would outweigh the benefits and divert funding from other priorities.

But Jowell was coming off a happy summer. She had helped coordinate the Commonwealth Games (a kind of mini-Olympics for Britain’s former colonies) and also the Queen’s Golden Jubilee. Both were so successful that, as she recalled when I sat down with her in London, “when I got this advice, I thought, Hmm, I’m not sure that we’re just going to say that we can’t bid to host the Olympics. Look what we’ve just done.”

She arranged a series of one-on-one meetings with the other 22 members of Prime Minister Tony Blair’s Cabinet. They were, she recalled, “profoundly skeptical and hostile,” and indeed unanimous in their opposition. They feared a repeat of the swelling budgets and poor management that turned the building of the Millennium Dome into a public-relations fiasco. Jowell said that Gordon Brown, Blair’s chancellor of the Exchequer, told her, “We’re not going to be able to build schools or hospitals if you do these Olympic Games.” (Brown declined to be interviewed for this story.) When she hired economists to conduct a full-scale feasibility study, they too shot her down. “The quantifiable evidence to support each of the perceived benefits for mega-events is weak,” the study concluded. “They appear to be more about celebration than economic return.”