A four-nation re-think of the IOC bid process


A city campaigning for the 2010 Winter Games spent, on average, $9.5 million. That would have been in 2003. A city bidding for the 2018 Games averaged $34 million. That was in 2011, just eight years later. Yet approaching four times more. That’s just one of the many illuminating facts about the Olympic bid process in a far-reaching report released Tuesday as a project linking four prominent western European national Olympic committees. In recent months each — Austria, Germany, Switzerland and Sweden — saw Winter Games bids die before they ever really got started.

Chinese shoppers walk by a 3D mural outside a Beijing mall -- the Beijing capital, which staged the 2008 Summer Games, now one of three 2022 Winter bid cities // photo Getty Images

The simple reason why, of course, is Sochi, and the $51 billion figure associated with the 2014 Winter Olympics. That number has freaked out voters and governments alike. Layered on to that is public mistrust of the International Olympic Committee itself.

But as the report says, to assign blame to that number and to that element of mistrust alone would be an “oversimplification.”

Things, especially Olympic bids, can sometimes be complex. And so the impetus for the report, it says, is to try to do something constructive after would-be bids from Vienna (for 2028) and then Munich, the St. Moritz/Davos region and Stockholm (all 2022) died.

Then, of course, as it notes, in May the bid from Krakow, Poland, got shot down (also 2022). Beyond which, too, the bid from Oslo, which just last week got passed through to the 2022 finalist stage, may be barely hanging on — the IOC noting in a working group report that its own polling numbers found only 36 percent support in Norway for the project.

The IOC also put Beijing and Almaty, Kazakhstan, through as 2022 finalists. It will select the 2022 city in July, 2015.

The four-nation review got underway in February amid those Sochi Olympics, with two meetings there; another meeting took place May 13 in Frankfurt, Germany.

The “crucial” intent, the report released Tuesday says, is “to strengthen the confidence of the public in the Olympic movement.” The “overall aim” is to “rethink the bidding procedure in order to reduce complexity and increase transparency and flexibility for potential bid cities.”

The document, entitled "The Bid Experience," is punctuated not only with intriguing facts about the bid process but with a series of recommendations aimed at informing IOC president Thomas Bach’s “Olympic Agenda 2020” review and potential reform process, now underway and working toward an all-members session in Monaco in December.

It is an open question, of course, whether the IOC will adopt any or all of the recommendations.

One does not, however, have to search far and wide to understand the significance of this report. It was  produced in part by the current IOC president’s former national Olympic committee. It comes loaded with interesting and intriguing proposals and recommendations. It is written in English for easy downloading around the world. And it is timed, even if coincidentally, so it can be read for the Agenda 2020 “summit” meeting of key stakeholders in just a few days at IOC headquarters in Lausanne, Switzerland.

In sum, the report asks for four things: “more support in bidding”; “more certainty in process”; “more partnership in risk”; “more flexibility in scale.”

What that means:

First and foremost, as Bach himself made plain amid last week’s meeting of the IOC’s policy-making executive board in Lausanne, the IOC faces an extraordinary communications challenge in explaining the “budget structure of the Olympic Games.”

The report says such explaining that structure has seemingly proven “utterly impossible.”

Frankly, it’s not.

It can be done in two easy paragraphs.

First, there is the operational budget of the Games. This budget is what it costs to put on the Games. For the Winter edition, this usually runs to roughly $1.5 to $2 billion.

Second, there is everything else. This is variously called the capital or infrastructure costs. This includes needed sports venues, support infrastructure and, moreover, what a city, state, region or nation decides it wants to build — for public policy reasons — using the Olympics as catalyst.

This second element is at the root of the wide-ranging perception of the Games as a bottomless money pit.

Addressing the communications aspect of the operational budget first because, honestly, it’s easier:

What is so perplexing, indeed confounding, is that the IOC itself now puts up a sum approaching half that $2 billion. It doled out $750 million to the organizing committee in Sochi; that sum will be $850 million in Pyeongchang, South Korea, host of the 2018 Winter Games. How is it that message isn’t getting out?

Seriously: who wouldn’t want — by the time 2022 comes around — nearly $1 billion? Another interesting, can’t-be-denied fact is that the IOC traditionally likes repeat bidders. Pyeongchang, for instance, won for 2018 after coming up short in 2010 and 2014. But, as the report observes, for 2022, for the first time since the campaign for the 2006 Games, won by Torino, Italy, there is not even one repeat bidder from the prior cycle. Not one.

Clearly, the IOC has not done a sufficient job in recent years of explaining the benefits of a Games to taxpayers and governments, and particularly throughout its traditional base, western Europe.

Indeed, given a nearly $1-billion head start and the economics of a modern Winter Games, it would seem almost impossible for an organizing committee not to make — this is the preferred term of art in the Olympic sphere — a “surplus” (not a “profit,” though they are exactly the same).

And yet that message is — obviously — not getting across.

As the report says, the IOC “should better explain and clearly show the financial contributions it makes to the organizing committees of the Olympic Games,” because that would “ease the national public discussion about the cost of the Games and at the same time help to promote a better image of the IOC.”

As for infrastructure:

The communications challenge is that for years the IOC has done virtually nothing in addressing, much less helping, its purported partners — from bid stage to franchisees actually putting on the successive editions of the Games — explain why or how various infrastructure or capital projects might or might not be worthwhile in the near- or long-term.

To that end, the report suggests the IOC might think about co-funding a communication campaign — perhaps with funds from the Olympic Solidarity program, which come from on-the-rise IOC broadcast rights  — as soon as a city plunges in. That, though, the report stresses, would mean a huge paradigm shift — all involved, perhaps including the IOC itself, would have to see the IOC “not as a counterpart but as a partner for interested cities.”

Fascinatingly, the report shows that just 54 percent of all necessary venues actually exist when a city decides to bid. What that means is that bid cities planned to spend an average of about $400 million for Winter Games sports venues. The venues mostly missing? Ice halls. The problem? Who needs big ice arenas after a Games?

The dilemma? It’s a “lesser of two evils” game, the report says. Temporary venues are simply not cost-efficient, at $1,000 per seat; then again, building and dismantling runs even higher. The answer? More flexibility from the IOC, the report suggests. Soccer games at the Summer Olympics are scattered about a host nation. Why not the same for ice hockey at the Winter Olympics?

As for the delicate subject of the IOC voting itself, the report notes, as everyone involved with the process has long understood, the IOC’s so-called “technical evaluations” — that is, its reviews of a city’s facilities and operational capabilities — can sometimes mean little if nothing when it comes to balloting itself.

Cities with low technical grades have not infrequently emerged as winners — see Sochi 2014 and Rio 2016. Dryly, the report says, “This may, however, be related to the strict prohibition for IOC members to visit bid cities during the bid process,” a subject that may be revisited during the Monaco meeting.

The report says it may be “necessary” to “reconsider” how bid cities are selected. It asks:

What if the IOC split the candidate city vote into two equally weighted parts?

One — representing the technical evaluation, with a ranking of all bid cities?

Two — the vote of the IOC members?

That, while surely provocative, is not the most striking set of observations and recommendations in the report.

This is:

“Sustainability,” the report says, is now a buzzword. The IOC talks a lot about it. It even has its own get-together, the IOC World Conference on Sport and the Environment, and gives awards for sustainable initiatives. But, the report says, those awards focus mainly on environmental impact.

That’s not enough, the report says.

Most businesses now have a corporate social responsibility department. The IOC?

Point: the IOC has reached out to the United Nations in multiple ways over the past year. Counterpoint: as the UN’s Environmental Program wrote, according to the report, the Sochi 2014 project marked a “general economic development in which environmental aspects [played] only a minor role.”

It is “very important,” the report says, that “sustainability is understood in the broadest sense possible, including not only environmental but also social, ethical and economical sustainability and thereby also human rights.

“The IOC has to clearly define not only its understanding of sustainability but also its values and goals in this context.”

Further, the report says, the IOC should implement a “comprehensive and transparent” monitoring process — to make sure its defined sustainability, those values and goals, are being maintained during “all phases of bidding, planning and staging” of an Olympics.

It is “crucial” — that word again — that there be “sanction possibilities” for the monitoring body to wield. Again, the report makes plain, this is a credibility issue: “The criterion sustainability, already a critical fact in the public perception, needs to become a ‘hard fact’ within the bidding procedure,” not only part of the bid documents but of the host city contract as well.

Finally, a big-picture point:

Of course, national Olympic committees agree to the Olympic charter. Within the Olympic world, that’s a given. It’s also the case that the IOC can not force country X or Y to “obtain the charter and to value ethical standards and human rights,” for it has no such authority.

But, the report adds in a thought-provoking notion, it is “responsible that the Olympic Games do so.”