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Dropouts from 2026 Winter Olympics bidding race show impact of IOC reforms is yet to reach the public

The IOC is undertaking a range of reforms designed to make bidding for and hosting the Olympics less costly and less complex. Jonathan Dyson asks whether any progress is being made, including in the current 2026 Winter Olympics bidding race, and looks at what more needs to be done.

  • The New Norm contains 118 initiatives designed to create Games which are more flexible, easier to operate and less expensive
  • But 2026 Winter Olympics bidding race is bedevilled by familiar problems
  • Key challenge now is to convince the public in referenda of the value of the Games to a host city

As bidding to host the 2026 Winter Olympics enters its final stretch, just two candidates remain: Stockholm and Milan/Cortina.

In November, Calgary became the ninth successive Olympic bid city to lose a public vote, highlighting long-held concerns about the challenges facing cities in bidding for and hosting the Olympics – in particular the costs associated with such a huge event.

Coming out on the wrong side of public opinion – again – will have greatly frustrated the International Olympic Committee because it happened in spite of the significant changes it has made to the process of bidding and hosting the Games.

These efforts were encapsulated in ‘The New Norm’, a set of 118 reforms presented at the 132nd IOC session in February 2018 in Pyeongchang.

The IOC maintains that the reforms are having a positive impact on the current race and that the reason they haven’t saved bids in public referenda reflects a failure only to effectively communicate their ethos.

“Both Stockholm and Milan/Cortina have declared that without the New Norm reforms they would not still be in the race,” Christophe Dubi, IOC Olympic Games executive director, tells SportBusiness.

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The New Norm

The New Norm emerged out of Olympic Agenda 2020, the strategic roadmap for the future of the Olympic Movement that was agreed at the 127th IOC Session in Monaco in December 2014 and comprises 40 recommendations to be achieved by 2020.

The New Norm develops from six of these recommendations:

1. Shape the bidding process as an invitation
2. Evaluate bid cities by assessing key opportunities and risks
3. Reduce the cost of bidding
4. Include sustainability in all aspects of the Olympic Games
12. Reduce the cost and reinforce the flexibility of Olympic Games management
13. Maximise synergies with Olympic Movement stakeholders.

Dubi says that the idea behind the 118 New Norm reforms is to “take the general spirit and direction given by Olympic Agenda 2020, going into the details so that it materialises in implementation.”

“Some of the measures are very strategic,” he says. “And then you have a number of the detailed measures that are at the other end of the scale but have also a profound effect. Each of them has either a direct relation to simplifying the equation or a direct cost effect.”

Reform #29, for example, is a strategic change designed to help deliver on Recommendation 1 of Agenda 2020 [Shape the bidding process as an invitation]. It calls for the “maximum use of existing facilities and temporary / demountable venues as well as competitions or venues outside the host country for reasons of sustainability”.

Through reform number 29, OCOGs are “strongly encouraged” to develop temporary venues in “the most cost-effective way … weighing the cost of the technical solution against the revenue-generating potential for the events it will host”.

In addition, new permanent venues “should be considered only if a viable business plan is presented detailing proven post-Games demand, funding and future operational usage, including operator”. For mono-functional venues “no permanent construction will be required,” with competitions moved instead to “the most suitable existing venue … even if located outside the host city / country”.

Examples in the 2026 race are the cross-country venue in Stockholm and the multi-sports hall in Milan, both new permanent venues that Dubi says have viable business plans. The sliding track in Sigulda, Latvia, which forms part of Stockholm’s candidature, was chosen as the most suitable existing venue – even though it was outside the host country – to avoid unnecessary permanent construction.

Dubi notes that the Interested Cities in the 2026 race on average plan to use 80 per cent existing or temporary venues, compared to 60 per cent among the Candidate Cities for the 2018 and 2022 Winter Games.

The IOC President’s Dinner ahead of the Pyeongchang 2018 Winter Olympic Games. (Photo by Andreas Rentz/Getty Images)

Micro reforms

Looking at some of the micro reforms, Dubi says that while some of these might seem mundane, they can also have a significant impact in reducing cost and complexity.

Number 97 encourages OCOGs to “simplify food and beverage services, especially warm menus for some stakeholder groups. Where kitchen facilities must be fully designed and built, warm food will be provided only to certain Games clients”.

“Why this, you might ask? Well we don’t want to build a temporary kitchen in the mountain if it’s not already present,” says Dubi. “A temporary venue means renting of the equipment, it means energy, it means a complex food supply chain – this is complexity. In terms of cost, yes it makes a difference but in terms of complexity it’s night and day.

“We’ve been looking at every single element of Games organisation to find either simplification or massive cost reduction.”

Other similar reforms include No. 33, which aims to reduce the rental period for venues used during an Olympic Games, and No. 79, designed to reduce the cost and complexity of transport arrangements by combining the use of OCOG-dedicated resources with robust and available public transport.

IOC figures suggest initial Games operating costs projected by the Interested Cities for 2026 are on average 15 per cent (approximately $300m) lower than those of the cities in the two previous candidature processes.

In general, the reforms are designed to ensure that “the Games adapt to a city or a region, and not the other way around. It means that decisions are based on a long-term interest and not driven by short-term needs”.

Implementation

As part of the implementation process, the New Norm initiatives have been incorporated into the host city contract and its technical appendices – which together form the framework for organising an Olympic Games. The changes will apply from the 2026 Winter Olympics onwards.

Dubi stresses that for each change to the requirements, the IOC will liaise closely with the OCOG on the cost. “If we change a requirement – for example with technology where sophistication is increasing constantly – that has a financial impact on an OCOG, we would have to have their consent. And we have to agree whether they can absorb it or whether it’s the IOC that will contribute financially. And that’s very important, because it means that we cannot change anything unilaterally.”

An example was the Big Air event in the 2018 Winter Olympics in Pyeongchang, where the IOC stepped in to pay for the new venue required by the addition of the new sport to the Olympic programme.

Jonas Boesiger of Switzerland during the Snowboard Mens Big Air Finals in Pyeongchang. (Photo by Nils Petter Nilsson/Getty Images)

As a further measure to assist OCOGs with cost, the IOC is no longer asking for an unlimited financial guarantee from a host city’s government. Instead the IOC is only asking for a Games delivery guarantee, and a contingency delivery plan. Dubi claims every Games of the past 20 years has either broken even or returned a profit. This view is corroborated in a joint study by Johannes Gutenberg University and Panthéon Sorbonne that tried to assess the true costs and revenue overruns of editions of the Games between 2000 and 2018.

He also notes that the IOC is now taking on a larger proportion of the operational costs of hosting the Games. In the 2013-2016 quadrennium $2.36bn was distributed to support the staging of the Olympic Winter Games in Sochi 2014 ($833m) and the Olympic Games in Rio 2016 ($1.53bn). For the 2025-2028 quadrennium, it has already been announced that the contribution to support the hosts in staging the Games will increase to $2.725bn ($925m to the 2026 host city and $1.8bn to LA 2028).

The IOC is trying to reduce costs for candidate cities by shortening the bidding process, first to a year and then, in June 2018, to eight months. It is also trying to end candidates’ dependence on bid consultancies by providing more support and expertise, for instance through more frequent visits to potential host cities.

The IOC released updated information during its latest executive board meeting in Tokyo in late November claiming that the projected budgets for Stockholm and Milan/Cortina are on average 75 per cent lower than the average budgets of the 2018 and 2022 Candidate Cities.

Communication

The biggest challenge for the IOC now appears to be changing perceptions about the Games and the cost of hosting them.

Olympic hosting and bidding experts tell SportBusiness they are in favour of the New Norm, but question the success of the IOC’s communications.

“It is clear now that the IOC understands the issues at hand and is taking steps to address the situation,” says Terrence Burns, executive vice president, global sports at marketing agency Engine Shop. “The hard part seems to be explaining it to the rest of the world.”

For Lars Haue-Pedersen, managing director of Burson-Marsteller Sport, the IOC’s problem is the language it uses.

“The IOC has done a great job with The New Norm and cutting the costs,” he says. “But it’s still a very expensive exercise to host the Olympic Games. The IOC is now talking about costs being much lower. But they still talk about costs. The word cost is mentioned constantly.”

Dubi argues that more concrete evidence about the value of the Games is now available. He notes, for instance, that Pyeongchang 2018 had a surplus of at least $55m, while a study released on November 6, by the Universities of Mainz (Germany) and Paris-Sorbonne (France), highlights the distinction between the costs of hosting the Games and the costs of infrastructure.

The study compiled a comprehensive list of expenditures and revenues of the Olympic Games from Sydney 2000 to Pyeongchang 2018. While it still found cost overruns, among its conclusions were that for all 10 Games editions, the costs of organising the Olympic Games (OCOG budget) were usually covered by revenues, made up almost entirely of private resources and the IOC’s contribution.

But as the IOC’s losing record in referenda shows, that message isn’t getting through to the public.

Dubi says: “The ‘no’ side has one message: that your taxes will rise, which, whether it is true or not, resonates with anyone. So we have to be very sophisticated on the promoter’s side to explain what’s in it for the people.”

As a result, the IOC is trying to promote societal and environmental benefits more heavily, while working more closely with, and being more present, in candidate cities.
Dubi says the impact of the IOC’s new approach to communication has already been seen in the race for the 2026 Winter Olympic Games. In Calgary, he notes, many local media commentators towards the end of the campaign expressed the view that hosting the games would be a great deal for the city.

He believes that the no campaign won in Calgary because this argument emerged too late. “It was very clear that most of the $1.8bn proposed in the bid would be spent in the local economy. But this came very late on to the table, simply because the various levels of government, although being very generous in the end, could not provide some of the financial backing early enough.”

Of the outcome in the Calgary referendum, Robert Datnow, co-founder and joint managing director of The Sports Consultancy, thinks that the IOC would benefit from a standardization of the methodology used to measure the economic, media, and social impacts of the Games.

“These impacts need to be defined,” he says. “I think the IOC could do well, as others, to look at the major professional services providers who are looking in this area to create standard methodologies which are designed to capture the tangible as well as the intangible social impacts of the world’s major events.

“By social impact, I mean asking questions about the participation and grass roots impacts of hosting a major event like the Olympic Games. And what is caused by the event, in terms of increases in participation?”

Iain Edmondson, director at the International Association of Event Hosts, says: “I do think the IOC management are making genuine, meaningful and pro-active steps to address the balance of equity between the rights-owner and the host city. However, currently in many markets they are suffering from damaged brand perception which is taking time to repair.

“The next Winter Games would benefit from strong leadership from a sophisticated and experienced host city who can help demonstrate the IOC’s vision set out by the New Norm, thereby rebuilding trust in the brand.”

Dubi concedes that more work needs to be done in persuading the public in a bidding city that the cost of the Games is not prohibitive.

“People do understand that the games have changed, but they still want more proof, and we have to bring more proof. If that is what is needed to convince people in their referendum, then that’s what we have to bring.

“It’s virtually a crusade that we have here ahead of us. Because the cost of the Games has been talked about for such a long time, to persuade anyone with a new narrative will take time and effort and convincing arguments and proof. And this is what we are doing. This is what we have started with 2026.”

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