The English-language version of the Korea newspaper, the Chosun Ilbo, started the story this way:
“Gangwon Province is mired in massive debts after hosting the Winter Olympics in Pyeongchang earlier this year.
“The mountainous province with a population of 1.5 million had to host the biggest Winter Olympics so far, and six months on conflict with locals and unpaid wages continue to plague the local government, while the astronomically expensive venues sit empty.”
The 29 August article by Sung-won Jeong, went on to note in detail the financial crisis caused by the PyeongChang Winter Games held last February and continuing today:
∙ The venues for speed skating, ice hockey and the sliding sports – bobsleigh, luge and skeleton – are a “bottomless pit of maintenance costs” which are estimated to run 20.3 billion Korean Won through 2022 (about $18.1 million U.S.). The provincial government is asking for three-quarters of the total to be paid by the national government, which is not interested.
∙ The Jeongseon skiing center, built in a forest, is now a tug-of-war between environmentalists who wants it dismantled and the forest reinstated, and local skiing interests who see the potential for continued use as a ski resort.
∙ There are multiple unpaid contractors, with an 8 billion Won construction bill (~ $7.1 million U.S.) already being discussed with the Korean Fair Trade Mediation Agency.
∙ Not in the story, but also problematic is the 35,000-seat stadium constructed for the Opening and Closing Ceremonies of the Olympic Winter Games and Winter Paralympic Games – for a reported $100 million U.S. – which was always scheduled for demolition after the Games after being used for a total of four events.
The governor of the Gangwon Province, Moon-soon Choi, told the Chosun Ilbo, “Most of the Olympic legacies have either been demolished or are gathering dust, causing a tremendous amount of disappointment for local residents. We need urgent financial support from the government.”
This is a big problem for PyeongChang, for the Gangwon Province and for Korea. But it is an even bigger – and ill-timed – problem for the International Olympic Committee.
In July, the IOC’s Executive Director for the Olympic Games, Christophe Dubi (SUI) told the Inside the Games Web site that the PyeongChang Games ran a financial surplus, which will be detailed in September “down to the last penny. What we know is these Games are financially profitable and that is a great thing.”
What’s worse is that the IOC could stick to this story and be technically correct.
Dubi’s surplus claim refers only to the PyeongChang organizing committee – known as POCOG – and not to the Games as a whole. Reports prior to the Games put the total cost of the event at $13 billion U.S., mostly paid for by various levels of Korean governments … and not the organizing committee. So POCOG could run a surplus and the Games could have a huge and continuing deficit.
This couldn’t come at a worse time for the IOC, which is facing an imminent decision in Calgary (CAN) about whether that city will bid for the 2026 Winter Games. The City Council will meet on 10 September to consider ending the bid, and if still alive, there will be a referendum on 13 November.
The 2026 field could also include Stockholm (SWE), a three-city joint bid from Italy and Erzurum (TUR), but the Swedish government support is not yet assured and the Italian effort is far from coordinated at present. Sapporo (JPN) is interested, but would prefer to bid for 2030.
Moreover, the financial problems in Korea mark the fourth straight Games with major cost issues, as 2012 (London), 2014 (Sochi Winter) and 2016 (Rio) all had massive cost overruns. The next Games in Tokyo in 2020 also has massive cost issues and the 2022 Winter Games will be in Beijing, which spent a reported $40 billion-plus on the 2008 Olympic Games.
So far from showcasing the financial changes that the IOC has insisted have come from its Agenda 2020 and “The New Norm,” the reinforced narrative is that the Olympic Games is an exercise in financial madness.
Just last month, IOC chief Thomas Bach told CNN Money Switzerland that “you can see that organizing the Olympic Games is a feasible investment. And in PyeongChang 2018, you will hear in the near future that there the budget will again make a profit.”
Thanks to the news from Korea, the Olympic naysayers will have a field day.
The IOC now is in a position it has never faced before. It must, in public statements and through its highly-visible Coordination Commission meetings in candidate and host cities, to campaign against and insist that new facilities NOT be built for the Olympic and Winter Games.
In effect, the IOC must turn around a well-known sports-marketing tagline to, “Don’t Do It.”