SBJ/Sept. 2-8, 2013/Olympics

Will IOC play it safe for 2020?

Recent Games have broken new ground

Four years ago, the International Olympic Committee met in Copenhagen, Denmark, and awarded Rio de Janeiro the 2016 Olympics. The pick was a continuation of the IOC’s push to take the Olympics to new territories and engage emerging economies.

In recent years, it has selected China for 2008, Russia for 2014 and Brazil for 2016. So when the IOC gathers this week in Buenos Aires, Argentina, to select the host city for the 2020 Summer Games, observers will be watching to see if that trend continues.

Istanbul touts the ability to bring together two continents for the Games.
Photo by: GETTY IMAGES
Will the IOC choose Istanbul and take the Games to the fast-growing economy of Turkey? Or will it opt for a more mature city like Tokyo or Madrid and the established economy of Japan or Spain?


“The IOC has safe and imaginative choices,” said George Hirthler, a bid consultant who worked on Rome’s bid for the 2020 Games, which the city withdrew. “Both Tokyo and Madrid had technically excellent bids, and the level of risk in both those bids is low. Istanbul offers a bridge to a whole new world for the IOC.”

The 2020 host city, which will be voted on Saturday, will be the last major decision the organization makes during the 12-year leadership of IOC President Jacques Rogge. It will contribute a great deal to his legacy, either cementing or distorting the perception that he led the organization’s global expansion. It also will determine whether the organization is concerned enough about the rising costs of hosting an Olympics to do something about it, or merely concerned enough to talk about the issue in the press.

My Two Cents …

Editor’s note: SportsBusiness Journal Olympics reporter Tripp Mickle will be in Buenos Aires, Argentina, throughout the 125th IOC Session on Sept. 7-10, covering the IOC presidency vote, the 2020 bid city vote and the 2020 Games final sport selection. Follow his reports daily in SportsBusiness Daily and SBD Global, as well as coverage in SportsBusiness Journal. Here he offers his opinion on who will host the Games in 2020.

Mickle
My bet is Madrid. Istanbul is an attractive choice. It’s a new and growing market and a great way to take the Olympics to the Muslim world, but the timing of the political protests there, which coincided with political protests in Brazil assailing the government for excessive spending on the World Cup and 2016 Olympics, should give IOC voters pause. Tokyo has sentimental appeal because of the earthquake in Japan, but the Olympics will be in Asia two years earlier at Pyeongchang, South Korea, and a European-dominated IOC won’t want to travel there twice.

Madrid’s the easy choice. It’s a way to pay tribute to Juan Antonio Samaranch, go to a city that doesn’t need a lot of infrastructure development and spend three weeks in a place, much like London, with more than enough activities beyond sports to entertain spouses, sponsors and others. 

  — Tripp Mickle

During Rogge’s time on the job, the IOC has expressed concern about the rising costs of the Games, but it’s done little to reverse that trend. China spent more than $40 billion on the Beijing Games, the United Kingdom spent more than $14 billion on London’s Olympics and Russia is spending more than $50 billion on the upcoming Sochi Games.

If the IOC selects Istanbul, which has a $19 billion infrastructure plan, the spending binge would continue. If it selects Madrid, which plans to use 28 existing venues and spend $1.9 billion, or Tokyo, which plans to use 15 existing venues and spend $4.9 billion, the spending would be curtailed for at least one Summer Games.

“The costs have been astronomical [at recent Olympics], and the challenge for everyone is: At what point do we stop trying to outdo each other?” said Davis Butler, founder of the sports marketing agency Encompass International and a former IOC executive. “It’s not sustainable.”

The IOC’s evaluation report on the 2020 bid cities, which was completed in April, evaluated everything from venue plans and public support to transportation plans and legacy.

The Istanbul bid is built around the slogan “Bridge Together.” It calls for a cluster of venues that straddle both Asia and Europe and touts the ability to bring those two continents together in one celebration. It also promotes the ability to bring the Games to the first Muslim country and imprint the importance of sport on the youth of Turkey. Forty-two percent of the country’s population is under the age of 25.

But the IOC raised some concerns about the transportation plan, saying traffic could make travel times to some venues more than 30 minutes from the Olympic Village. It also questioned security and noted the proximity of bordering Syria, which is in civil war, and the threat posed by the Kurdish nationalist group known as the PKK, which bombed Turkish embassies and other interests throughout the 1980s and ’90s.

The report preceded the Turkish government’s violent crackdown on protesters that began in late May. The protests came around the same time that Brazilians were protesting their government’s spending on the World Cup and Olympics. The parallels between the two developing democracies could unsettle the IOC, but Istanbul bid leaders aren’t concerned.

Tokyo has big plans, and plenty of cash on hand for infrastructure.
Photo by: GETTY IMAGES
“Young people of Turkey showing that they are part of vibrant, civil society,” bid chairman Hasan Arat said of the protests. “We are a democratic country. As any country around the world, you may see that type of peaceful protest. Every bid faces issues. Some long-term issues and some short-term issues. Luckily ours were short terms. These protests are finished, and I don’t think that will have any effect on the voting Sept. 7.”

Tokyo’s bid is built around the theme “Discover Tomorrow.” The city last hosted the Games in 1964, and it wants to build a new 80,000-seat stadium in the same location as the ’64 stadium for the 2020 Olympics. The city also plans to build a waterfront athletes’ village and boasts public transportation to 27 of its 32 venues, all of which will be less then five miles from the village. Most importantly, though, the city government has a $4.5 billion cash reserve to cover infrastructure costs.

The IOC evaluation report questioned the Tokyo bid’s plan to provide shuttle bus access to five venues, but the larger question is whether the IOC will want to return to Asia in 2020 after taking the Winter Games to Korea in 2018. There’s also the question of whether a recent nuclear leak from Japan’s Fukushima power plant, which suffered several meltdowns after the 2011 earthquake, will give IOC voters pause.

Madrid remains the sentimental choice because of late IOC President Juan Antonio Samaranch.
Photo by: GETTY IMAGES
Madrid remains the sentimental choice for the IOC. The organization’s late president, Juan Antonio Samaranch, wanted the Games to come to his nation’s capital, and his support of the city’s bid for the 2016 Olympics was credited with making the city a finalist opposite Rio for those Games.

In addition to relying on IOC members’ fondness for Samaranch, organizers of Madrid’s bid for 2020 will highlight the city’s plan to use 28 existing venues and limit total spending to $1.9 billion.

The biggest obstacle could be the Spanish economy, which has been in recession since 2008, but the IOC evaluation commission report said it doesn’t believe the economy will be an issue in 2020. The chief concern it raised was the possibility of a security issue as a result of the Basque separatists movement of northern Spain, which has attacked the Spanish government hundreds of times in the last 45 years.

All three options carry risk. The question will be how much risk the IOC can tolerate.

“There is only so much risk tolerance for the IOC and it’s almost as if the pendulum is swinging to a place where people want less risk,” Butler said. “But there are so many factors that make [an IOC vote] unpredictable.”

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