Mario Monti

The IOC's big bid problem

One of two Norwegian government parties voted Sunday against supporting Oslo’s bid for the 2022 Winter Games, Associated Press reported, in a three-paragraph story likely to be buried in the back pages of newspapers and de-emphasized by analytics monkeys at websites around the world. It’s 2014. It’s eight years until 2022. The International Olympic Committee isn’t even going to vote for the 2022 city until next year. Who could possibly care?

Everyone should care.

IOC president Thomas Bach leading the session in Sochi two days before the start of the 2014 Games // photo Getty Images

To put it another way — if you have even the most remote interest in the ongoing vitality of the Olympic movement, you should care.

To put it yet another way — the IOC has an enormous problem on its hands.

One notion here is to use the connotatively more neutral word “challenge” — as in,  the IOC has had a huge challenge for the last few bid cycles, and in particular Winter Games bid cycles, attracting enough interested and qualified cities.

Let’s be real, and the language has to reflect that reality.

The IOC has an enormous problem.

This big problem is of its doing, and is many, many years in the making.

The problem is complex.

It is various parts finance, governance, perception and (lack of, by the IOC) communication — with cities, states and nations saying the Games have become way, way, way too expensive; or they don’t like or don’t trust the IOC; or both.

Indeed, a 2008 survey by the British think tank One World Trust found that when looking at 30 corporations, inter-governmental agencies and non-governmental organizations, the IOC ranked 30th in what it called “accountability indicators,” suggesting it was the least accountable and transparent.

Ahead of the IOC on this ranking were such institutions as the International Atomic Energy Agency (29), NATO (28), Halliburton (26), Goldman Sachs (20) and Royal Dutch Shell (12).

In South Korea last Monday, at a good governance forum sponsored by the International Sport Cooperation Center, a Seoul National University professor, Min-Gyo Koo, reminded the audience of that survey, which in Olympic circles strangely has gotten little attention.

One of the panelists at the conference, Anita DeFrantz of the United States, now on the IOC executive board, a member since 1986, told the audience, “I cannot accept that we were behind Halliburton and Shell. That is not acceptable.”

Another panelist, Ivan Dibos of Peru, an IOC member since 1982, said, “”That No. 30 ranking could be looked at positively or negatively,” adding a moment later, “I take it as something positive and I rather prefer it that way.”

In the IOC’s defense, Koo said, at least the IOC made the top 30. Soccer governing body FIFA, he observed, didn’t.

This, then, is what it has come to — at least the IOC is on the list.

What it should be is this, as Koo also pointed out, the new IOC president, Thomas Bach, reminding one and all last December, albeit in the context of a dispute involving India’s national Olympic committee, “It’s about the principles … good governance for the IOC is a key issue. We need to be strict and to make sure the rules of good governance are applied.”

Governance is not sexy. But it is essential. And this should be a key focus of the IOC’s “Olympic Agenda 2020” process now working its way toward Monaco and the extraordinary session in December.

So should PR. The members of the IOC know it is a pass-through that keeps some percent of the money it takes in. Can they all say immediately what percent, to refute the perception the IOC is not some avaricious money-sucking beast? (It keeps roughly 10 percent, perhaps a touch less.) How many know the quadrennial Solidarity budget, which sends dollars back to developing countries for athlete development? (It’s $438 million for 2013-16.)

The same goes for finance — and the issue of how much the Games should cost.

The Sochi Games were, in hindsight, a success — but.

The $51 billion price tag for those Games is, in significant measure, its primary legacy, at least when it comes to the next couple bid cycles.

It does not matter — again and for emphasis, it does not matter one bit — whether that figure is true or not.

That is the number that is out there, and so that is the number everyone around the world believes.

It also does not matter — again, it simply does not matter — that the Games’ organizing budget was roughly a couple billion dollars and the rest went toward infrastructure.

The general public does not understand the difference between operating and infrastructure budgets. They don’t want to hear it. It’s all just money.

After the collapse of the Soviet Union, Russia had no winter sports facilities. Russia bid for the Games, and won. To get the job done, the Russians had to start from nothing. The short story of Sochi 2014 is that the Russians built two new cities, Adler and Krasnaya Polyana, from scratch.

That cost $51 billion.

The $51 billion question: who besides Russia has that kind of money?

China does. The 2008 Summer Games in Beijing purportedly cost roughly $40 billion.

This, then, is the problem.

Who in the world besides Russia or China has $40 or $51 billion just lying around? For a sports event that lasts 17 days -- even if, as the IOC consistently says, and virtually no one hears, most of that money is going toward roads, airports, metro lines, that kind of thing?

Big money. Big issues. Big problem.

It for sure does not help that Rio for 2016 is a hot mess.

Rio, too, is way, way, way over the initial infrastructure projections.

And despite the backtracking that IOC vice president John Coates engaged in after his initial comments last week — he’s now saying that, sure, Rio can “indeed deliver excellent Games” — it’s worth noting that in law school, they teach you in evidence class to pay attention to what people say when their message isn’t at risk for being shaped.

Coates, being an excellent lawyer, would surely know this.

What he said initially, of course, was that preparations for Rio — which he has visited six times as part of the IOC’s inspection team — were the “worst I have ever experienced.”

Sochi and Rio are the triggers.

The big problem facing the IOC, however, has been simmering for a long, long time. It is now finding increasing expression not just in Oslo but across western Europe, the IOC’s once and forever soul, which makes it all the more problematic.

In February, 2012, Rome withdrew from the 2020 campaign, the then-premier, Mario Monti, saying that a projected $12.5 billion was too much. Rome put on the 1960 Games.

In the afterglow of a European Summer Games in 2012, in London, arguably the best-ever Summer Olympics, voters in four -- and, now, maybe five -- separate countries have shot down Games bids:

In March, 2013, voters in Switzerland ended a 2022 bid for St. Moritz and Davos. St. Moritz staged the Winter Games in 1928 and 1948.

A few days later, voters in Austria rejected a Vienna 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, balloting in Germany killed a Munich 2022 bid.

Munich would have been the presumptive 2022 favorite. The city played host to the 1972 Summer Games; it had bid for and lost (to Pyeongchang) for 2018; Garmisch-Partenkirchen, about an hour south, had staged the 1936 Winter Games.

Ludwig Hartmann, a Greens Party lawmaker and a leader of the movement, called “NOlympia,” that led the opposition to the plan, said, “The vote is not a signal against the sport but against the non-transparency and the greed for profit of the IOC.”

Meanwhile, a leading German newspaper, Süddeutschen Zeitung, had run a column comparing the IOC to the mafia and the “North Korean regime.”

This past January, Stockholm pulled the plug on a 2022 bid, the City Council saying the project was too expensive. Stockholm staged the 1912 Summer Games.

Now, Oslo.

Nearby Lillehammer staged the 1994 Winter Games, lauded by many as the best-ever. And Oslo itself put on the 1952 Winter Games.

The global economic situation has already affected the 2024 Summer Games race, too: Mexico City, Toronto and two Russian cities, Kazan and St. Petersburg, have already pulled back for a variety of finance-related reasons.

This is not just an Olympic Games problem. This is an Olympic movement problem. Last month, Hanoi dropped out of staging the 2019 Asian Games, the once-every-four-years event attracting thousands of athletes, citing financial concerns.

In theory, there are five applicants still in the 2022 Winter Games contest: Oslo; Beijing; Almaty, Kazakhstan; Lviv, Ukraine; and Krakow, Poland.

Polish voters are due to vote later this month about the Krakow bid. Polls suggest a difficult situation.

Lviv is in western Ukraine; the eastern sector of that country is being ripped by armed conflict and the fate of the bid is highly uncertain.

That might leaves only three for 2022. Or would it be two?

AP reported the Progress Party vote Sunday against supporting Oslo’s bid is “likely” to put the city out of the race. In Norway, the Conservative and Progress parties rule in a coalition government; Progress Party members said the Games would affect the government’s ability to fund infrastructure projects, education, health care and tax cuts.

For 2018, the IOC managed only three Winter Games candidates: Pyeongchang, Munich and Annecy, France. And in the end, Annecy managed only seven votes.

For 2014, the IOC deemed only three bids worthwhile enough to pass along for a vote: Sochi, Pyeongchang and Salzburg, Austria.

The Oslo bid’s immediate future depends perhaps on whether it can still get the government to underwrite the needed financial guarantees, and whether those guarantees can be offered before the IOC’s July 8-9 executive board meeting. That’s when the 2022 list will be cut to the finalists — the cities that will actually go to a vote in July, 2015.

The IOC — and let’s also be clear about this — has a huge interest in seeing Oslo stay in the race. If the Polish referendum goes badly and if the situation in Ukraine continues to deteriorate, Oslo would be it for Europe for 2022.

For now, though, there’s this, from Atle Simonsen, the head of the youth wing of the Progress Party, speaking to Norwegian public broadcaster NRK: “Believing that the Oslo Olympics would cost under 50 billion kroner,” about $8.4 billion, ”is like believing in Santa Claus, when the Sochi Olympics cost 500 billion.”


Big problem: no Munich 2022

What is wrong with this picture? Vienna: no.

Rome: no.

Munich: no.

Even Switzerland, home of the International Olympic Committee: no.

The IOC has a huge disconnect on its hands. At issue, right or wrong, fair or not, may well be the IOC itself. Now: will the IOC recognize this disconnect, and be willing to do something about it?

In the afterglow of arguably the greatest Summer Games ever, London's 2012 Olympics, taxpayers in western Europe -- the IOC's base -- have now shot down three separate Games bids before they even got started, the latest Munich's presumptive 2022 Winter Games campaign, killed Sunday by Bavarian voters.

This past March, voters in Austria rejected a Vienna 2028 plan. Innsbruck just 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.

Just days before the Vienna balloting, Swiss voters in the canton that is home to the ski resorts of St. Moritz and Davos rejected a 2022 bid proposal. St. Moritz staged the Winter Games in 1928 and 1948.

In February 2012, meanwhile, the then-prime minister of Italy, Mario Monti, called off Rome's 2020 bid, though it was already well underway. Rome put on the 1960 Summer Games.

Monti pulled Rome out because of uncertain costs associated with the project.

That's always an issue. Environmental concerns are a factor, too. But now there seems to be something more at work,  the reputation of the IOC itself.

Munich had bid for 2018, won by Pyeonchang, South Korea. Since then, of course Thomas Bach, who played a key role in the 2018 bid, has become the IOC president, and a 2022 Munich bid would have been the presumptive favorite, Munich seeking to become the first city to stage the Summer (1972) and Winter Games.

The mountain resort of Garmisch-Partenkirchen, about an hour south of Munich, where some of the 2022 events would have been staged, played host to the 1936 Winter Games.

The bid needed to win elections in four communities were the Games would have been held. Instead, the campaign lost in all four, some badly.

Here is the money quote from Sunday's vote, from Ludwig Hartmann, a Greens Party lawmaker and a leader of the movement, called "NOlympia," that led the opposition to Munich 2022: "The vote is not a signal against the sport but against the non-transparency and the greed for profit of the IOC."

If you are tempted to dismiss the Greens as a fringe party, fine. But when a leading German newspaper like Süddeutschen Zeitung, the day before the vote, runs a column that compares the IOC to both the mafia and the "North Korean regime" -- if you are the IOC, you've got issues.

Fifteen years after the Salt Lake City scandal shook the IOC to its core, the organization has -- this is the truth -- undergone significant reforms. Juan Antonio Samaranch lived to see those reforms effected. Jacques Rogge carried them out.

After having written about the IOC full-time since nearly the day the scandal erupted, it is clearly the case that the overwhelming majority of those who are members now believe -- and wholeheartedly -- in its mission. They give outrageously of their time. Their commitment is profound, indeed.

And yet -- how is it that the image of the IOC can conjure such comparisons? A crime syndicate? A rogue state?

"We proved long ago, when I was with Meridian, the IOC's marketing agency, that consumers around the world love the Games and the Olympic brand. That is irrefutable," Atlanta-based Terrence Burns, now the managing director at Teneo Sports, said.

"We also conducted research about the IOC itself -- as an organization. The results of that were not so glowing …

"The IOC has an image problem -- fair or unfair, real or imagined -- it does not matter."

Just last weekend, Bach chaired a "summit" at IOC headquarters in Lausanne, Switzerland, with more than a dozen senior Olympic officials from around the world. Afterward, the IOC issued a statement in which the new president's agenda, ratified by those in attendance, was made crystal-clear.

The statement identified the "main topics of interest and concern" confronting the movement as these: the campaigns against doping and match-fixing, regulation of the sports calendar, autonomy of the sports movement and, finally, governance issues.

What's missing from that list is elemental. It's what Sunday's rejection by Bavarian voters underscores, and this is way beyond any potential reflection of the vote on Bach, because this is about way more than one individual.

The entire Olympic enterprise is hugely expensive. It depends on cities and countries wanting in.

In our world now, there will always be emerging countries with lots of money -- and the corollary, some measure of risk, possibly significant -- ready and willing to stand up and say, we want the Games.

Is a trend that produces mostly such countries for any given bid cycle in the best interest of the Olympic movement?

If the perception of the IOC in developed nations makes for a bid disincentive, or worse, isn't it thoroughly obvious that the IOC should be doing something about that? Some basic brand management? Some fundamental story-telling about what the IOC itself does?

Munich's defeat, for instance, could well mean no German bid for many years to come. Berlin, which played host to a tremendously successful 2009 world track and field championships, was thought by many to be a viable Summer Games contender.

Michael Vesper, director general of the German Olympic Sports Confederation, which goes by the acronym DOSB, said the rejection of Munich 2022 "clearly means that another Olympic bid in Germany won't be possible for a long time."

Burns, the former president and founder of Helios Partners, served on the winning Beijing 2008, Vancouver 2010, Sochi 2014 and Pyeongchang 2018 bids. He also managed golf's entry to the Olympic program and wrestling's return, and said of the IOC:

"This is an organization that does incredible good in the world, every day on every continent around the world, and no one knows about it. The IOC, for its own reasons, has mistakenly chosen to let the Games themselves be the arbiter of its image. In the consumers' minds, the Games do not equal the IOC in terms of appeal and affection. They are two different things."

The deadline for entering for 2022 is Thursday. Already declared: Oslo; Lviv, Ukraine; Beijing/Zhangjiakou; Almaty, Kazakhstan; and a joint bid from Krakow, Poland, and the nearby mountains of Slovakia. Stockholm is still thinking about it. The IOC will pick the 2022 site in 2015.

The 2018 race produced only three candidates: Pyeongchang, Munich and Annecy, France.

Some will review the early list of 2022 contenders and see a welcome uptick in the number of bids.

Reality check: the IOC is heading to Sochi for 2014 and Rio de Janeiro for 2016, and just awarded Tokyo 2020 with more than one member making it clear amid the 2020 vote, "No more experiments."

Look at the 2022 list again, and Oslo would appear to be your early front-runner. Norway has staged two Winter Games before, in Oslo in 1952 and Lillehammer in 1994. It has a huge offshore oil sector and so it likely can afford the Games, the Oslo 2022 budget already pegged at $5 billion.

But -- what kind of front-runner?

In September, only 55 percent of Oslo voters supported the bid in a city-wide referendum.

To be candid, 55 percent is not a happy welcome mat. Then again, that's better than pre-vote polls had suggested: a survey in the Norwegian daily Aftenposten had put support at 38 percent with 47 percent saying they would vote no, the remaining 15 percent undecided.

"I think that what just happened in Munich," Burns said, "was not a rejection of the idea of hosting the Winter Games, it was a rejection of the IOC itself. That's troubling to me personally because as an insider I have seen what goes on behind the curtain for almost 20 years, and I can tell you the IOC works hard, very hard, on behalf of sport. But no one knows about it.

"Think about it this way:

"Munich, or Rome, had an opportunity to truly make a powerful, positive statement to the world about sport and humanity, frankly on their own terms given the IOC's relatively hands-off approach -- e.g., Sochi -- and they took a pass. How many great cities can the IOC afford to 'take a pass'?

"Isn't it of value to the IOC to have a Munich or a Rome hosting the Games instead of somewhere you've never heard of? There is a mutually beneficial brand transition that takes place and London is a great example -- both the IOC and London greatly benefitted from each other's brand. But London bid for the Games [starting] in 2003 and won in 2005. Would they bid today? Could they?"