It’s no secret that the International Olympic Committee has a “trust” problem.
Communities, especially in Europe, have demonstrated via political actions and referenda, that having the Olympic Games in their country or region is not worth the effort. The primary reason given is always money, but the underlying reason is trust.
That is, that the public in these areas does not trust the financial projections of the bid promoters and later, organizing committees, to bring in the event within the stated financial parameters. Because the host cities (and, in actuality, the host countries) are on the hook for the overruns, the result is that the public is stuck with the bill.
The IOC, via its newest president, Thomas Bach, has hammered away at this as “outdated” thinking. After the Sion area of Switzerland rejected a 2026 bid in a referendum in June, the IOC issued a statement noting that “From the polls, we understand that outdated information on the cost of the Games was the main concern for those voting against the funding. The recent fundamental reforms undertaken by the IOC have unfortunately not been taken into consideration.” (Emphasis added.)
The reforms referred to include Bach’s Agenda 2020 program and a series of cost-cutting proposals called “The New Norm.” But the IOC is so wrong on this that even some of its supporters are shaking their heads. And the issue has not gone away. How about another, current bid whose projected cost went up by 15% – more than $600 million – in 84 days!
That would be the estimated cost of a 2026 Olympic Winter Games in Calgary (CAN), which was C$4.6 billion in a 19 June estimate from the Calgary Bid Exploration Committee’s presentation to the Calgary City Council, vs. C$5.23 billion suggested by the Calgary 2026 Bid Corporation on 11 September. Of this revised total, about C$3 billion would have to come from taxpayers via city, provincial or national government funding. (C$1.00 = about 0.77 U.S. dollars, sp $5.23 billion Canadian is about $4.04 billion U.S.).
So the issue of trust in the bid process is still front and center for the IOC. Which makes last Tuesday’s announcement of the European-based (German) insurance giant Allianz as a new sponsor of the IOC and the International Paralympic Committee so interesting.
What words did Bach use to describe the IOC’s newest sponsor?
“This new partnership demonstrates the global appeal and strength of the Olympic Movement, and we are delighted to be working together in the long term with Allianz to support sport around the world. Allianz has built a global business founded on trust. With this partnership, together we are building a foundation based on mutual trust. Allianz also has a strong sporting heritage and, in line with the Olympic Agenda 2020, we share a digital ambition of connecting with young people around the world to promote the Olympic values and the power of sport.” (Emphasis added.)
And the mutual news release describing the sponsorship also gave some clues as to its scope, beyond simply the cost of the agreement:
“Through this sponsorship agreement, Allianz will work with the IOC to provide innovative and integrated insurance solutions to support the Olympic Movement, including the Organising Committees of the Olympic Games, with the ambition of providing those insurance solutions to the National Olympic Committees around the world and their Olympic teams and athletes. The support will include existing products, such as fleet and property & casualty insurance, but also insurance solutions for future products and services, driven by technological changes. The partnership will run from 2021 through to 2028.” (Emphasis added.)
This is important, because the organizing committees are never the focus of the IOC’s initiatives unless there are problems. You always hear about how the IOC’s work benefits athletes through the International Federations or National Olympic Committees, but the organizing committees are thoroughly ignored until something goes wrong … or there isn’t one because cities aren’t interested in hosting the Games.
So now with Allianz on board, the IOC has a partner which could create insurance programs that could shift the potential burdens of deficits from public funds to private ones. After all, in Allianz’s own release, it notes that “In 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of 11 billion euros for the group.” (€1 = $1.17 U.S.)
This is hardly a new idea. The Southern California Committee for the Olympic Games in Los Angeles, fresh off of the revolutionary 1984 Games, had the idea to assemble insurance coverage against a deficit for a 2004 Olympic bid and then again in bids for the 2012 and 2016 Games. None of those bids were successful, but the idea was widely exposed and has shown up in many other bids since.
But it is an idea whose time may have come. With Allianz on board, the IOC has taken one more step on the way to making the Games more affordable to stage and even pave the way for the IOC itself to organize the Games in a city and require little or no cost exposure on the part of the host community. That would definitely make cities more interested … even in Europe!