Shaky finances freeze Winter Oly plans

What do European cities Stockholm, Oslo, Krakow, Lviv, St Moritz and Munich have in common? They have all turned down or pulled out of bidding for the Winter Olympics in 2022 and triggered alarm bells at the International Olympic Committee.

The withdrawals, with Oslo pulling out as recently as last week, have highlighted the need for what IOC President Thomas Bach has said was an overhaul of the bidding process.

But as it stands now, the Alps, Europe's traditional winter sports hub, will be without the Games for at least a generation, until 2026 at the earliest. Italy's Turin hosted the event in 2006 before the Games went to Vancouver in Canada for 2010 and Russia's Sochi in the Caucasus mountains this year.

For 2018 the Winter Olympics will travel to South Korea's Pyeongchang, with Kazakhstan's Almaty and Beijing in China the only candidates left for 2022. Whether scared off by what potential bidders see as massive costs, like Sochi's $51 billion price tag, doubtful financial returns or strong local opposition, Europe has been turned off the winter Games for now at least.

"Norway's Lillehammer in 1994 staged the most successful winter Games ever," sports marketing expert Michael Payne, the IOC's former longtime marketing chief, told Reuters. "If Lillehammer had to go through the existing bid process, it would have scared them off immediately and you would not have had those Games," he said.

Payne said it was the IOC who have failed so far to communicate the message of the winter Games properly, instead building up a bidding process that is long, exhausting and at times superfluous. The nail in Oslo's Olympic bid coffin seemingly came when 7,000 pages of the host city contract and other manuals were released with details about the IOC members' desired room temperatures, cocktail protocols and obligatory stocked minibars.

Norwegian Olympic Committee general secretary Inge Andersen said the IOC was scaring off western countries with a long, complicated and bureaucratic process that these countries had trouble pitching to their own citizens. That in turn was also fuelling opposition in possible host cities.

"It is important the IOC goes through these manuals, which for the first time were made public, to make them in a way a country in western Europe, Canada or the United States can understand them," Andersen said. Payne agrees the IOC process has become overwhelming for a product he says is still a money maker, even for European cities.

"I don't believe the product is in any way broken for Europe," he said, adding that
European cities could keep costs down and maximise profits as they have more existing venues than newcomers like Almaty, Beijing or even the 2018 hosts Pyeongchang or Sochi. The bidding process has got to be simplified," Payne said. "The IOC, wanting to de-risk everything, has loaded more and more demands into the bidding phase.

"The manuals used to be 50 pages. After each Games you look to fix things so these grow and grow and grow. From a strategic point of view it makes sense but it scares the living daylights out of them."

Bach, a German lawyer and former Olympic fencing champion who took over the presidency of the IOC in 2013, has said bidding needs to be simplified and the benefits of the Games explained better to potential hosts to make them more attractive to cities. "You have to wonder why a candidature like Oslo is putting as its marketing income only 25 percent of Vancouver's marketing income," said Bach.

"When you see a country like Norway, one of the richest in the world with such high live participation and interest in sport and they put in 25 percent of marketing revenues of what Vancouver made, then you wonder."

It is exactly at this point where the IOC got it wrong, according to Payne. They failed to convert the Games into an attractive financial proposal, given the IOC is contributing about $900 million towards organising the 2022 Games.

Coupled with that is the perception of the IOC as an organisation more interested in taking than giving to a country. "The IOC has admitted it did a poor job communicating with potential bidders (for 2022). There is a short-term problem and a fair amount of it of the IOC's own doing which it has recognised," Payne said.

The IOC is already in the middle of a process of revamping its bidding procedure since Bach took over, as part of its Agenda 2020, with the IOC session in December voting on all the proposed changes.

"If you would re-run the process today, under the new direction that Bach is developing, I think you would have a very different result," Payne said.