PracticeConsultingOlympics – The price of going for gold and glory.

Olympics - The price of going for gold and glory.

The Olympics bring millions to an economy, but the Sydney bid is not

With the 2000 Olympic Games in full swing, attention has focused on the performance of the athletes on the track, in the field, in the pool and in the huge variety of peripheral events.

But the behind-the-scenes financial shenanigans of recent Olympic bids, particularly those involving Sydney and Salt Lake City, provide an equally entertaining if less savoury fare.

Allegations of corruption have not, however, been levelled at Manchester’s attempt to host the games. Bill Enevoldson is a partner with KPMG and was financial director for the Manchester bid for the 2000 Olympic Games.

‘Manchester had previously bid for the 1996 games, subsequently won by Atlanta,’ says Enevoldson. ‘The 2000 bid followed on from that.’

The 2000 bid was more serious than that of 1996, which lacked full government support. For the 2000 attempt, the government contributed £70m for building new facilities, including the Velodrome and the Manchester Evening News Arena, the largest indoor arena in Europe.

‘The then prime minister, John Major, and John Gummer, the environment minister, played a significant role throughout the process,’ Enevoldson says. The Manchester bid was unquestionably realistic, with the city only being eliminated following the rejection of Berlin, leaving Beijing and Sydney as the final two contenders.

The primary problem for Manchester was that of image, with inevitably negative comparisons with Sydney or Beijing. In addition, if the International Olympic Committee (IOC) were to award the games to the UK, London would be their more obvious choice of venue.

‘Ultimately, that was probably the deciding factor. There was never any question about money or our ability to organise the games,’ continues Enevoldson.

The budgets and financial issues involved in both the Manchester and Sydney bids were remarkably similar. The television rights income, which accounts for over half the total income the Games generates, would be approximately the same if the Olympics were held in either Manchester or Sydney.

The Sydney Olympics has not remained immune from the whiff of corruption.

Earlier this year, Dick Pound, the IOC vice-president, said it was time for Australia to move on from carping and scandal to stage the best Olympic Games the world has seen.

‘A year of crisis and scandal is over and we’re now ready for the stage when all of Australia will say, ‘We’ve had our fill – now let’s get on with making the games as good as the world thinks they’ll be,’ he said.

He added that the IOC’s response to the crisis of 1999 would go down in its history as one of its most positive episodes – a process that made significant and extensive progress possible within a remarkably short period.

Pound’s high hopes for the Sydney Games has also been fuelled by the IOC’s first global image repair campaign, which was launched in January 2000.

The Aus$225m campaign, which included worldwide radio and television advertisements, is expected to result in record audience attendance for the 2000 games.

Pound claims the crises – involving bribery and corruption allegations over the Salt Lake City and Sydney bids – that dogged Australian IOC officials and Sydney’s Olympic Games Organising Committee (SOCOG) in 1999, were overplayed in Australia. He said they were ‘local distractions which got totally out of proportion’ by ‘a particularly savage domestic media’.

The furore over ticket sales was ‘just a sign that Australians want to go to the games,’ and it was overly simplistic to see it as a ‘tickets-for-the-rich’ scheme.

‘You could sell 100,000 tickets for the swimming finals and Australia should be pleased about the number of tickets SOCOG has kept for Australians.’

He also defended disgraced Australian IOC member Phil Cols, who he said was ‘hung, drawn and quartered’ over corruption allegations surrounding the Salt Lake City bid.

‘I don’t think he deserved the treatment he got. He was no worse than some of the other people who got caught up. He was just very naive to think those people in Salt Lake City were his friends.’

Difficulties in getting new sponsors and cutting the value of its premium tickets programme forced SOCOG to cut up to $100m in spending.

Reducing the number of staff is one way SOCOG dealt with its financial problems. Earlier in 1999, $50m was wiped off expected sponsorship revenue.

The required target of a further $100m was deemed impossible. In December 1999 budget cuts were expected to top $100m, but the final figure was closer to $50m, with the rest taken from its contingency fund.

The venue for the Winter 2002 Games, to be held in February, will be Salt Lake City. The bid has been tainted by the worst financial scandal in Olympic history, and is additionally plagued by the inevitable confusion and delay that characterise American legal proceedings.

The latest indications are that a United States federal magistrate will postpone the October 16 trial date for Tom Welch and Dave Johnson, the alleged masterminds of the Salt Lake Olympic bribery scandal.

Federal prosecutors appear ready for the trial, but lawyers for the bid leaders insist they need more time to study 400 boxes of government evidence.

They also plan to travel overseas to interview former IOC members involved in the scandal.

‘The government wants to do it as soon as possible,’ the Justice Department attorney Richard Weeds said on 19 September.

The defence lawyers state they may need a year’s preparation before the case is suitable for presentation in Court, a request the prosecution is likely to oppose. Max Wheeler, Johnson’s lawyer, claims they still require substantial time to clarify the defence.

A defence motion seeking an unspecified delay says the 15-count indictment against Welch and Johnson is so sweeping and novel, and the government case so massive, that a trial delay is inevitable.

Welch, who was president of the Salt Lake bid committee, and Johnson, vice president, are charged with showering IOC members with more than $1m, consisting of payments in cash, arrangements for travel and expensive gifts.

The indictment accuses them of conspiring to bribe IOC members, who in 1995 awarded Salt Lake City the 2002 Winter Games. It also accuses Welch and Johnson of concealing their dealings from a board of trustees, a charge they emphatically deny. They maintain their ‘favours’ for IOC members were customary for bid cities.

A decidedly defensive spokeswoman for the IOC, which is based in Lausanne, Switzerland, says, ‘Although there were allegations of bribery and corruption regarding the award of the Olympics to Sydney, nothing of substance ever emerged, and certainly nothing was ever pursued by our Ethics Commission.’

And what of the Salt Lake City scandal?

‘The scandal began at the end of 1998, and a series of reports were issued throughout 1999. Your questions are unhelpful. Everything is in the public domain, and we would prefer to move on.’

Six members of the IOC were expelled in March 1999 following the conclusions of a commission of enquiry.

Four working groups subsequently produced a series of reports throughout the year, with recommendations being adopted in December 1999.

The final report published in that month was an extensive document, specifying all the reforms and their impact on the Olympic Charter.

Given the colossal sums of money to be gained from the games, it is unlikely that future bids to hold the event will remain untainted.

– Jonathan Ball is a freelance journalist

British Olympics Association

International Olympic Committee

SYDNEY 2000: VITAL STATISTICS Total budget: Aus$ 2,331.5m

Number of sports: 28

Number of sports/disciplines: 40

Total events: 300

Mens events: 168

Womens events: 120

Mixed events: 12

Estimated participation

Athletes: 10,321

Number and percentage of men: 6,416 (62%)

Number and percentage of women: 3,906 (38%)

Officials: 5,000

Media: 15,000

Source: International Olympic Committee

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