Meet the 'new norm': same as the old norm

PYEONGCHANG, South Korea — Like a bad itch, the International Olympic Committee has a way of scratching on a recurring basis the in-house fiction that it can conjure up new ways to save astonishing sums of money in the staging of its franchise, the Games.

Here at its annual assembly, its 132nd session, the IOC unveiled its latest, a strategy it immediately dubbed the "new norm,” calling it a "Games changer."

This “new norm” outlines an “ambitious set of 118 reforms that reimagines how the Olympic Games are delivered.”

Buzzkill: this new norm is the same as the old norm, at least where it counts: in winning public opinion.

 IOC members at their 132nd session, at the Kensington Flora hotel near PyeongChang // IOC/Flickr

IOC members at their 132nd session, at the Kensington Flora hotel near PyeongChang // IOC/Flickr

This is plain from the very first sentence of the body of the news release: “The plan, which focuses on six recommendations of Olympic Agenda 2020 related to the organization of the Games, will provide cities with increased flexibility in designing the Games to meet long-term development goals … “

So we can stop right there. 

This is where the IOC hangs itself, continuously and, seemingly, eternally: “… to meet long-term development goals …” 

It’s why cities around the world, especially in western Europe, the IOC’s spiritual home, are shying away from bids for the Games. It’s why this new norm reverts to the familiar, absent the production of compelling evidence to the contrary — which seems extraordinarily unlikely, given that Games budgets in Tokyo for 2020 are supersonic, for Beijing for 2022 are an accounting fairy tale and even for Paris for 2024 are already threatening.

When it comes to the Games, the IOC has an optics problem: jurisdictions go through money as if it was white stuff at Studio 54 in the 1970s. 

Until that stops, and the only relief in sight would appear to be 10 years away in Los Angeles, where everything is essentially built now and organizers assuredly are going to find further ways to slash costs considerably, there can be no “new norm.” 

No way, no how.

It’s a curiosity, to be honest, why the IOC came out with this “new norm” notion. 

The logical explanation is that, having last year navigated the Summer Games double-allocation for 2024 to Paris and LA for 2028, it is now looking at what to do for the Winter Games for 2026, and perhaps 2030, knowing that its 2022 bid contest ended up with only two entries — Beijing and Almaty, Kazakhstan — when every other candidate dropped out, most over cost concerns.

With voters in western Europe turning down Games projects in referendums, Bach was asked at the news conference Wednesday night that wrapped up the IOC session if the “new norm” might help sell the Games, particularly in, say, Sion, a Swiss town considering 2026.

He offered a lengthy answer worthy of being entered into the record:

“This is very difficult to tell. It’s a potential, and there the candidature of Sion already has taken many options which [Agenda 2020] is offering into consideration, so they already benefit greatly from these reforms. But, you know, these referendums, in a number of western countries, they are not only decided on the numbers, just. What you can see in a number of western countries is that big projects which are orientated to the future have difficulties in winning referendums. This is — be it a new airport, be it a new motorway, in my country [Germany] even be it a new train station and many others, you see a certain tendency that the people expect a return on investment tomorrow, and not necessarily then in seven years or 10 years. They take all this into consideration. Then: ’It may be a little bit more noisy! Will it work? Will it not become more expensive than planned? Do we really need it?’ There are many arguments. There in particular to the Winter Games, on the occasion of such a candidature, climate change is being discussed. This ‘new norm,’ I think, can offer excellent arguments, but others will come into play. This is then up to the Swiss people … to decide.”

 From the IOC release touting the 'new norm': if you take out every buzzword in this graphic, what, really, does this mean? // IOC

From the IOC release touting the 'new norm': if you take out every buzzword in this graphic, what, really, does this mean? // IOC

Why are cities saying no to the IOC?

Since 1992, virtually every city in the world that has sought the Games has done so to replicate the Barcelona model — using the Games as a catalyst for far-reaching urban redevelopment. Barcelona was a middling town before the 1992 Summer Olympics. Those Games made it one of Europe’s leading lights.

This model worked great for the IOC until, to make a long story short, Beijing in 2008 ($40 billion, reportedly) and Sochi in 2014 ($51 billion, purportedly). Along with, say, Athens in 2004 ($12 billion, who knows) and Rio 2016 ($15-20 billion, same) and others.

There are two budgets at an Olympic Games, operational and capital.

The operating budget is what it takes to run the Games — that is, the sports festival. The IOC contributes a ton of money to make this happen. Plus, each local organizing committee can, and does, sell sponsorships. For instance, in Japan, as the IOC heard Wednesday, the Tokyo 2020 committee has already sold an astonishing $2.91 billion — billion with a b — in domestic sponsorships via 47 deals, with more to come; Tokyo 2020 also has struck 29 licensing agreements and is working on 12 more. 

Obvious observation: nearly $3 billion in sponsor-deal revenue is crazy good.

Also obvious, as any student of recent history knows: almost every Olympic organizing committee meets, or exceeds, the operating budget. 

That’s the easy part.

The challenge is on the capital — or construction — side.

But, again, this is why presidents, prime ministers, governors, mayors, city council members and other public officials want the Games. Why? Because an Olympics comes with a fixed seven-year (exception: Los Angeles 2028, 11-year) deadline. 

An Olympics is a public-policy godsend. It enables elected officials to propose and finish huge projects — metro lines, sewer lines, subways, airports — in seven years that otherwise would take 20 or 30 years, or more, or never get done at all.

The IOC knows it has a problem. There’s even a word for this in the Olympic space: gigantism. 

In 2003, the Canadian IOC member Dick Pound presented a report to the session — “Olympic Games Study Commission” — with 117 recommendations aimed at slimming down. That was the "new norm" in 2003. 

The "new norm" in 2014? Bach presented Agenda 2020, his would-be reform plan. So far, it has produced one meaningful element, the Olympic Channel. The others? Time will tell.

The 118 points in the 2018 "new norm" (one more than Pound 15 years ago!) are, in theory, linked to six points in Agenda 2020.

Back to Japan.

When Tokyo bid successfully for the Games, its bid called for an all-in budget of $7.8 billion — $3.424 for the organizing committee, and a capital budget of $4.38 billion. It’s right there in the IOC 2020 evaluation report, on pages 67 and 68.

Here is the disconnect with the 2018 “new norm.”

From Tuesday's news release:

“For example, a joint coordination process between national and regional government, the IOC and Tokyo 2020 has already assisted in reducing Tokyo’s revised venue budget by USD 2.2 billion.”

So if you didn’t know better, you’d go, great!

Right?

Except:

The day after the IOC published this statement, Australia’s John Coates, who leads what’s called a “coordination commission,” the IOC liaison group that checks in on Games preparation, reported to the assembly that the “version two” Tokyo 2020 budget, all in, after taking off another $1.4 billion from the combined operating and venue construction plans, is now, given current exchange rates, roughly $12.6 billion.

Math:

That is a 61.5 percent increase in the project.

If you owned a home and a contractor quoted you a price of $100,000, and then came back and said, after the job had started, oops, it’s now going to cost, $161,500 — how would you feel?

But wait — there's more.

On Jan. 26, Tokyo Governor Yurko Koike said the city would spend an additional $7.5 billion, bringing total Games-related spending to roughly $20 billion.

Math:

That is a 156-ish percent jump in the project cost.

And this is why taxpayers everywhere get so ripped at the IOC.

Of course, the IOC told Associated Press that $7.5 billion in spending was “regular administrative costs” that were “outside the overall Games budget.”

The governor was having none of that. She told AP that money was for “projects directly and indirectly related to the Games.”

Think, she said, about the expressway and the bullet-train from the 1964 Summer Games.

And, indeed, this is exactly — 100 percent — what IOC officials do all the time when talking about the impact of what happens when a Games comes to town: the new Athens airport, new transport in Rio, the biggest park to be built in decades in London and so on.

Oops. Messaging problem. As soon as that $20 billion number got out there, the parties in Tokyo got together and all agreed that the $7.5 billion assuredly fell outside the $12.6 billion — a budget that had been revised to ensure host-city operations were delivered in the most cost-effective manner — but, instead, reflected an opportunity the Games presented to invest for the future in costs associated with governing a major world city.

The problem is elemental: cake, both ways, etc.

In proclaiming that “new norm,” the IOC has itself cake and frosting: “designing the Games to meet long-term development goals … “

In China, where the marketing program is also going gangbusters — double the sum planned in the bid book, Bach said Wednesday — they know this full well: for Beijing 2022, the train line to take visitors up to the faraway mountains for the ski events (where there is little to no snow) is not going to be included in any accounting that anyone is going to know about. 

Bach on Wednesday night nonetheless suggested Beijing 2022 might set “a kind of benchmark for the application for this ‘new norm.’ “

During the assembly, Paris 2024 organizing committee officials on Wednesday promised the IOC “financial rigor.” 

Pierre-Olivier Beckers-Vieujant of Belgium, the Harvard MBA-trained executive who heads the new Paris 2024 coordination commission, told the assembly those 2024 Games offered the “first opportunity” to showcase “all the … benefits of Agenda 2020,” an opportunity to show “it is possible to organize remarkable Olympic games in a … cost-efficient manner.”

It can be done, Beckers said, with Paris 2024 proving an “inflection point in the history of the Games,” an “inspiration not only for the population … but also for future candidate cities.”

Just last week, French senators warned of expected delays to a massive expansion to the Paris metro network, which already faces multibillion-euro cost overruns. The “Grand Paris” project is central to linking transport hubs and Olympic venues. 

In mid-January, a French audit body said it had “serious doubts” about the project’s ability to open in time for the 2024 Games.

OK, then. 

Think, Beckers said, about breakfast, about your eggs and bacon. 

“If the chicken is clearly involved in the success of your meal," he told the IOC, "the pig is totally committed." 

He let that sink in, then said, “I am totally committed to the success of Paris 2024.”

The issue for too many taxpayers is simple: the perception the IOC is living high on the hog. 

That’s the norm. Full stop. There’s only one Games changer, same as ever, and it can’t get here soon enough: Los Angeles.