Rising Games costs are a result of IOC's reform delay: study
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[September 08, 2020]
By Karolos Grohmann
ATHENS (Reuters) - The Olympic Games'
cost overruns in recent decades are a result of the International
Olympic Committee's delay in undertaking deep reforms, and it is now
paying the price, said the lead author of new Oxford University
research.
The study, "Regression to the Tail: Why the Olympics Blow Up,"
claimed all Olympics since 1960 had run over their budgets at an
average of 172%.
The Tokyo 2020 Olympics have also gone above the initial budget with
almost $13 billion already spent, according to organisers, before
their costly delay by a year to 2021 due to the COVID-19 pandemic.
Many cities in recent years have been scared off by the mounting
price tag of hosting the Games, and the 2022 and 2026 winter
Olympics were left with only two bidders each after several cities
dropped out.
The 2024 and 2028 summer Olympics were directly awarded to Paris and
Los Angeles before a complete overhaul of the bidding process by the
IOC.
"Far more in terms of reform needs to be done," Bent Flyvbjerg,
Professor and Chair of Major Programme Management at University of
Oxford's Saïd Business School told Reuters in an interview on
Tuesday.
"Over a period of about 25 years the IOC has not been able to be
more inventive and more intelligent, because they are not paying for
the event. So they are not concerned about it."
Host cities take on the financial responsibility of staging the
Olympics with the IOC providing more than $1.0 billion dollars to
the Games' budget, among other contributions.
Host cities are responsible for covering any losses incurred.
"This is now coming back to bite the IOC," Flyvbjerg said. "They
have been slow and careless about these issues for decades."
NO CONTACT
The IOC said it had neither seen the study nor had it been contacted
by the authors.
"The (Oxford University) researchers have not requested any kind of
data from the IOC over the past few years, saying that they cannot
rely on numbers provided by the organisers, the IOC or governments,"
the IOC said in a statement to Reuters.
"This leads to the question of where the numbers used in the study
have come from and how they have been validated."
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The Olympic rings are pictured in front of the International Olympic
Committee (IOC) headquarters during an online Executive Board
meeting amid the coronavirus disease (COVID-19) outbreak in
Lausanne, Switzerland, May 14, 2020. REUTERS/Denis Balibouse
The IOC also questioned some of the findings, citing a study
conducted by the University of Mainz and Sorbonne University that
found on the operations side that organisers had broken even or made
a profit at every Games in the past 20 years.
"What we can see from the media reports so far is that the study
takes a fundamentally flawed approach, mixing two different budgets:
the budget for the organisation of the Games, and the infrastructure
budgets of the city, region and country."
The IOC introduced a string of reforms with its 'Agenda 2020' and
'New Norm' programmes, to make the Games cheaper.
"For the Olympic Games Paris 2024, this will lead to the use of
competition venues of which 95% are already existing or temporary.
LA 2028 will use only existing or temporary venues in four unique
sports parks spread across the city, highlighting LA’s geographical
diversity," the IOC said.
Several countries have expressed an interest to host the 2032
Olympics, including India, Indonesia, Qatar, Australia and Germany.
For Flyvbjerg, however, those reforms are not enough."It is already
clear that this is all too little too late. They are not bad ideas
but just not effective."
His study proposed a number of measures, including reducing the
seven-year preparation time, semi-permanent locations, larger cost
contingencies, and getting the IOC financially tied to the event.
"The owners of the concept have no interest to make it effective
because they don't care about the cost side. They define the specs
but somebody else pays the bill," Flyvbjerg said.
"The IOC needs to get realistic about what the issues are and not
deny them. They must embrace them and say 'OK, there is a problem.
The Games are too costly'. If you are not willing to say it then you
cannot solve it."
(Reporting by Karolos Grohmann; Editing by Hugh Lawson)
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