$51 billion, and now these three


LAUSANNE, Switzerland — As the Rolling Stones so memorably put it, you can’t always get what you want, and that’s worth keeping in mind as the International Olympic Committee announced Monday that it was passing the only three cities remaining through as finalists for the 2022 Winter Games — Oslo, Beijing and Almaty, Kazakhstan. The Stones also said you get what you need. Is this, really, what the IOC needs? Just three cities in the entire world want the Winter Games, and only one in western Europe, the IOC’s traditional home — and that one, Oslo, is not yet a solid bet to even make it to the finish line next July?

This much is entirely clear: this situation is entirely of the IOC’s making.

It ought to offer cause for deep reflection and much soul-searching.

IOC President Thomas Bach announcing the three 2022 candidate cities

There are two central challenges confronting the IOC.

One: the perception of how much the Games cost. The other: the way the IOC itself is too often seen.

It's also the case that Thomas Bach, the IOC president, understands these matters, and acutely. It's clear from his language and his signals over the past weeks and months that he knows three things: one, that perception has become reality; two, that in confronting perception, he is also confronting the realities of a communication challenge; and, three, that it may well take time to turn things around.

At issue, first and foremost, is the $51 billion figure associated with the 2014 Sochi Games. That figure has severely affected potential Winter Games hosts in established economies and markets. Whether that figure is real or not, whether it is misinformation or misinterpreted or not — it does not matter. For now, for all the amazing performances on the ice and snow, a primacy legacy of Sochi is $51 billion.

Beijing 2008 cost $40 billion, it is believed. London 2012 cost $14 billion. Rio 2016 is now on track to cost at least $17 billion, and climbing.

To put it in a context that’s easily understandable, the collection of these numbers have voters and governments freaked out.

The very first warning sign surfaced in the 2020 Summer Games campaign. In February, 2012, Rome withdrew, the then-premier, Mario Monti, saying that a projected $12.5 billion budget was too much.

Then, though, came London. Those Games rocked. You’d think that would spur massive interest across western Europe, right?

Instead, in March, 2013, voters in Switzerland ended a 2022 bid for St. Moritz and Davos. It’s not as if they don’t love the Games there, either: St. Moritz staged the Winter Games in 1928 and 1948.

A few days later, voters in Austria rejected a 2028 plan. Innsbruck put on the 2012 Winter Youth Games; it staged the 1976 and 1964 Winter Games. And Salzburg bid for the 2014 and 2010 Winter Games.

Last November, German voters killed a Munich 2022 bid. Munich probably would have won for 2022 easily. The city played host to the 1972 Summer Games. It had bid for and lost (to Pyeongchang, South Korea) for 2018; Garmisch-Partenkirchen, about an hour south, had staged the 1936 Winter Games.

This January, Stockholm pulled out of the 2022 campaign, the City Council saying it was too expensive. Stockholm staged the 1912 Summer Games.

In May, voters in Krakow, Poland, voted no on 2022. Too expensive, they said by a whopping margin.

Oslo put on the 1952 Winter Games. Lillehammer staged the 1994 Winter Games; the IOC will go back to Lillehammer for the 2016 Winter Youth Games.

The Oslo bid is hanging on, if barely, waiting to see if the Norwegian government will — later this year — put up certain financial guarantees.

An opinion poll commission by the Oslo 2022 bid committee at the beginning of 2014 showed 36 percent support in all of Norway for the idea of hosting the Games. That is, in a word, dreadful. The IOC likes to see 70 percent or better.

An IOC poll in Oslo and the surrounding municipal areas, released Monday as part of its 2022 working group report, again came back with 36 percent support. A full 50 percent were against the Games.

Compare and contrast: 65 percent support in Almaty (not fantastic but edging toward tolerable) and 77 percent in Beijing.

The reason for the 36 percent figure in Oslo is easy: $51 billion.

In the abstract, it makes perfect sense that Russia, in the aftermath of the breakup of the Soviet Union, had to create new winter sports facilities. Seriously: it had to to go other countries just to hold its own national championships.

This was one of the primary reasons why the Russians, in 2007, bid for 2014.

The disconnect is why $51 billion.

The Russians didn’t just build sports facilities. They built two new cities from scratch — Adler, for the ice venues, and Krasnaya Polyana, up in the mountains. All that took massive infrastructure.

Whether or not there was corruption that went with all that construction is of course a question open for potentially considerable discussion. The books in Russia are not open in the same way they might be in, say, the United States.

The 2014 Games — that is, the operating budget — cost nowhere near $51 billion. It was roughly $2 billion.  The Sochi 2014 committee two weeks ago put out a news release touting a $261 million profit — though government subsidies given to the committee totaled at least $420 million.

If you’re counting, that “profit” amounted to roughly 0.5 percent of $51 billion.

This leads into the next challenge.

Basic math.

Any Olympics features two separate budgets.

The IOC has, seemingly forever, not been able to explain the difference between operational and capital budgets.

This, though, is the conundrum, and the IOC kinda sorta wants to have it both ways. It is absolutely the case that one of the reasons so many mayors, governors and prime ministers want an Olympics is elemental public policy. A Games imposes a fixed deadline: you can get done in seven years what would otherwise take 20, 30 or more.

It’s most helpful to the IOC for it to focus on the “operational” side, so that if Country X wants to spend like mad on metro lines, roads, airports and more, that is a matter for the people and government of Country X.

The problem here is the tipping point of $51 billion. If $40 billion in 2008 didn’t do it, $51 billion in 2014 for sure did. That creates a perception problem worldwide for — the IOC.

Which leads directly more broadly to the next challenge.

The IOC has long dealt in crisis communication. Think, for instance: are the Games in Rio going to happen?

One of the reasons the IOC is in the fix it is in now is plain: its communication strategy, day-to-day, is almost non-existent.

The IOC, over the past 15-plus years, has launched winning campaigns such as “celebrate humanity.” It has touted the Olympic values: “friendship, excellence, respect.” But if I were to walk out of the classroom where I teach at the University of Southern California and cross Exposition Boulevard to the Los Angeles Memorial Coliseum, center of the 1932 and 1984 Games, and ask 10 people what the IOC stands for, the bet here is I would get a blank stare.

That has to change.

The more than 100 IOC members frequently get rapped for being fat cats who care only about five-star hotels and limousines. Maybe. Or maybe they are, for the most part, exceptionally smart people who are hugely qualified, volunteering of their time and energy, giving up weekends, holidays and family time to try, little by little, to make the world a better place through sport. Why isn’t that story being told?

In their countries, the IOC members can and should be incredible resources. Yet for the most part they aren’t being used. Why not?

It’s not like they are lacking for ideas. When they got together for their meeting in February in Sochi, they flooded the president, Thomas Bach, with 211 “interventions,” as comments and questions from the floor are called in IOC lingo.

In the public perception, though, the members are seen as distant and remote. And you wonder why the IOC has an image problem?

Bjorn Daehlie, the Norwegian cross-country ski champion who is now a businessman, in Lausanne Monday as part of the Oslo 2022 team, said of the talks underway now in his country relating to the bid and, ultimately, the financial guarantees, “I’m confident these discussions which are taking place now are important discussions. We needed these discussions. They thought all this money went into a big sack in Lausanne and these guys were driving in these black cars spending this money. So this is, I think — this is, huge, positive.”

He added, “I think a lot of other countries need to learn more about the work the IOC does for sport in general.”

Bach visited Norway a few weeks back, ostensibly to review Lillehammer's 2016 preparations.

"If you listen to Mr. Bach between the lines, he wants all countries to be able to host the Olympic Games," Daehlie said Monday.

Which, as the IOC moved the three cities on to become 2022 finalists, should lead in a straight line to the next issue.

The IOC must reinstate bid visits by the members.

As a reaction to the late 1990s Salt Lake City scandal, the IOC banned such visits. That was understandable then. The time has come now to allow the members to see the cities.

For one, it’s patently absurd that reporters — who are allowed to follow the IOC evaluation commission around — can know more about the cities than the members. The stakes are too high.

For another, now that NBC and the IOC have struck a $7.75 billion deal through 2032, it’s not as if there isn’t money available for the IOC to fund such visits. Take the financial incentive away from the cities.

Most importantly, however, there is no way that Bach can travel the world and hold out the IOC as a paragon of good governance and credibility if his own members can not be trusted to visit the cities bidding for the right to stage the Games.

It’s that simple -- though whether the members themselves will, ultimately, see it that way is entirely uncertain.

The bid-city issue is part of Bach's far-reaching “Agenda 2020” program, which is working its way toward an all-members review in December in Monaco.

In his comments Monday, the president said the IOC’s policy-making executive board was “impressed by the legacy plans” of each of the cities and noted that “it is good to see” that, at the outset, each understood the key difference between operating and capital budgets.

He also said the IOC sought to "encourage sustainability and the feasibility of the organization of the Olympic Games."

He said, “So we have a very good choice.”