Terrence Burns ©2018

I’ve often said that the IOC’s needs a “new narrative” as it pertains to the Candidate City bidding process. We’ve all read and heard the news: many cities are rejecting the idea of hosting the Olympic Games. Why? Well, the two main reasons are 1) a fear that the Games will be too costly for the Host City with no usable legacy, and 2) the negative image or reputation of the IOC as an institution.

I am not writing to castigate any group, city, or person who cleaves to either or both of the above notions; rather, I am writing to attempt to illustrate that times have changed and there is indeed a new perspective in Lausanne.

My message: the IOC does have a new narrative and part of it is money matters.

Like most things of consequence in life, the idea of hosting an Olympic Games comes down to a number – and more importantly, is that number believable? The truth is, there is really no definitive case study that represents a singular way to measure the true cost of hosting an Olympic Games

It’s not a secret nor is it news that the budgets of Bid Books and the reality of hosting a Games have often been miles apart. Scope creep, budget creep, naivete and the flat-out intervention of something called “reality” are just four of many causes for this gap.

What to do? Well, the IOC have listened, and they’ve acted. Before you roll your eyes, hear me out, please.

I’ve been working with Olympic bids for 18 years. The IOC’s process for most of those 18 years led to cycles of cities over-promising based on the pressure and belief that new venues and new infrastructure was better than existing venues and renovated infrastructure. Who’s to blame? Does it really matter?

So, here we are in the 2026 race for the Winter Games, and cities have dropped out – but often citing the same old reasons. Well, things have changed.

Let’s look at the cost of the Games. Even though some have scoffed at it, the IOC has overhauled the bid city process to make it more inclusive, less costly, more creative, less restrictive and less onerous on the city and its citizenry. The IOC is finally engaging with the “NoOlympics” people and others, as they should, to attempt to set the record straight on the new approach.

Did you know the IOC no longer requires a “Guarantee” from the city to cover any shortfalls in the Games budget? That’s right: no more “blank check” clause.

Did you know that the IOC will provide $925m to the 2026 Host City for its operating budget to host the Games?

Did you know that the IOC will and is sending teams of technical advisors and experts to cities interested in hosting the Games to help them 1) understand if they are capable of hosting an Olympic Games, and if so, 2) what do they need to do in order to prepare to bid?

And, did you know that the IOC does this on their own dime? It doesn’t cost the cities a penny.

Did you know that the Games themselves are actually self-funding? WHAT? Yes.

The balance of the budget beyond the IOC’s contribution is paid for by television broadcast revenues, sponsorship revenues, ticketing revenues, licensed merchandise, and other marketing revenues. Security for a Games in very expensive and that cost is subsidized by the state in most cases; yes, that means the security costs are borne by taxpayers but amortized over the national population, not just the Host City.

What does this mean for the people of a city contemplating a bid for the 2026 Winter Games?

It means that the money for the Winter Games budget is not money diverted from other city projects such as housing, transportation or social services – the money needed for the operation of the Games comes from the marketing of the Games and the IOC. Period.

What about needed infrastructure costs? And by that question, I assume you mean, costs like Sochi’s? Yes, the Russians spent a reported $50b on the Sochi Winter Games, but they did it because they chose to do so, not because IOC required them to do so. Basically, the Russians built a new city for the 2014 Winter Games.

Would the IOC approve a bid like Sochi’s today? Highly doubtful (I should know, I worked on the Sochi bid). We move on…but before we do, I think that citing Sochi’s $50b cost as a reason to say “no” to the Games is disingenuous; it is not comparing apples to apples.

The “new reality” of the cost-of-the-Games bottom line is this:

• The IOC are now providing services and expertise to prevent cities from ever building “white elephants” again. Why? Because it hurts the Olympic brand in the long run.
• The IOC are no longer just the franchisor in the Olympic equation, they are a true partner. Why? Because they have steadily increased the amount of their own money they put into the Games while decreasing the financial demands on the Host City.
• The operating budget of the Games is self-funded by the IOC’s contribution and the Organizing Committees’ marketing of the Games, not from public coffers. And,
• The IOC are now insistent that any new venues or infrastructure which may be needed to host a Games must have true and measurable sustainability and be part of a long-term plan for the city. If it is not, the IOC asks the city to look at temporary or facility re-use options.

So, 2026 cities – use your head and do the math.

If all or most of the venues needed to host a Games exist, or are already planned for long-term legacy purposes or will be temporary, you should bid.

If you believe that hosting a Games is good for the development of youth sports long-term, you should bid.

If you believe that the Games can be a unifying experience for your nation, you should bid.

If you can afford the Games without taking public funds away from needed expenditures in health, education, and housing, you should bid.

It’s that simple.  Do the math, then make your decision. But make sure it’s a decision made that is based on calculated, prudent, optimism, and not on hysterical, misrepresented fear.