Integrity and the IOC bid process

Attending the National Sport Law Institute’s annual conference last Friday, I came away with many thoughts on how to become a better sports lawyer. One thought permeated throughout every speaker and panel–integrity and good governance.

Fast forward a few days and I noticed that The International Olympic Committee launched a new initiative designed to aid and streamline the process of bidding for the 2026 Winter Olympics.
The Candidature Process 2026 main feature is to foster long-term development goals of the nation.

It has been reformed and redesigned to enable cities and NOCs (National Olympic Committees) to have even more sustainable, feasible and cost-effective Olympic Winter Games, and to align with their local, regional and national long-term development goals.

Further, this also includes a recognition of the organization’s obligation to the host country as its visitor and claims it will be responsible for $925 million U.S. dollars to help cover costs for the games.

The IOC even states that good governance and equal process is a principle foundation of the sporting and Olympic movements.

It is a first step–and not an insignificant one–for the IOC itself toward bidding cities and the process. However, I am more than a bit skeptical based on recent IOC history that this is the cure-all for what ails the Olympic movement.
Costs for the games themselves have skyrocketed as shown in this spreadsheet:

Source: Council on Foreign Relations

As you can read from the chart, the estimates are about one-third what the actual dollar amounts are upon completion of the stadiums, infrastructure and lodging for the games. Although the Sochi games skew the numbers (the actual cost was five times the estimated cost and there is no true estimate from Nagano), it’s instructive to look at the overall trend. What this table highlights is the lack of truth to taxpayers in the real cost of hosting an Olympics. Even if the cost is very high (especially for these mega-events), the IOC being up front about the true price puts at least faith into the bidding process.

Conversely, bidding cities must be more realistic about what they are paying for and have a plan for preventing cost overruns. Greece is the ultimate example of this discrepancy. It bid on the Games for 1996 and ultimately got them eight years later. The bid factored in some elements of infrastructure, but then needed to dramatically overhaul security and infrastructure once the events of Sept. 11, 2001 occurred. Caught flatfooted after three years of limited planning for the games, Greece nearly bankrupted itself trying to get everything ready and had no plan for what to do with the infrastructure post-Games. Instead of a $3 billion budget, Greece spent upwards of $16 billion (which included permanent athletic facilities, not temporary structures) and the resulting difference became a contributing factor in its economic crisis.

This trend continues today and not even a $900 million contribution by the IOC itself will be enough of a stop-gap should this scenario continue. Further, there are issues at play regarding the Olympics’ place in modern sport given the issues that plague the event in general and in specific situations such as Greece, the human rights issues in Beijing (2008) along with the corruption and deaths in Rio (2016) that also touch on governance issues within the IOC and NOCs.

What needs to take place is a hard look at the governance structure of not only the IOC but also National Olympic Committees. This is everything from how the structure is formed to the leadership working within it. Local governments are evaluating the IOC’s structure and the tide is slowly turning against hosting these large-budget events. In recent years, several European cities citing austerity and a lack of integrity by the IOC, backed out of the bid. Most notable among the European cities to withdraw a bid was Oslo, Norway, which was seen as the massive front-runner to the 2022 Winter Olympics bid. This left two less-than-ideal cities to host the Games: Beijing, China and Almaty, Kazakhstan. Beijing was ultimately awarded the games despite a lack of natural snow.

The IOC bought itself some time and can consider itself fortunate when Paris (2024) and Los Angeles (2028) decided to take on the Summer Games. Both are large cities that already have most of the athletic structures in place, thus allowing its focus to be squarely on infrastructure improvements. Again, this is a leap of faith that both Paris and Los Angeles’s Olympic Committees act in the best interest of the area and not just simply line their pocketbooks.

Sport around the globe is a massive industry–arguably the third largest behind government and health care. It has an importance in the lives of people that goes beyond the wins and losses. Hosting the Games, it’s argued, puts that city and/or country on the map for three weeks by raising its profile and generating enthusiasm in the region. It’s why emerging countries (Brazil, South Africa in the 2010 FIFA World Cup, Qatar in the 2022 World Cup), along with centralized governments (China, Kazakhstan, and Russia) and European nations (Germany, France, United Kingdom) all put its best foot forward in bidding for these mega events.

However, the downside is ever present when attempting to bring these events into one’s country. This downside chisels away at the faith of people in organizations like the IOC or the NOCs because taxpayers do not want to be taken for a ride like other countries were. Others are harsher in their assessment, saying the Games are a terrible investment for a country.

Give IOC President Thomas Bach credit for this at least: he does recognize the need to re-establish trust in the IOC, especially in European nations and verbalized it.  In July 2017, he acknowledged the populist movements that are holding the IOC more accountable within the bidding process.

“We have given some arguments to this public skepticism and mistrust.”

Now it is on Bach and the NOCs to make sure this mistrust is not permanent.