London 2012 and the Olympics host city curse

The Olympic Charter opens with a section defining “Fundamental Principles of Olympism”. Principle number two states: “The goal of Olympism is to place sport at the service of the harmonious development of man, with a view to promoting a peaceful society concerned with the preservation of human dignity.”

Yet without fail each Olympiad seems to mire the host nation in controversy, be it over human rights, legacy, construction costs or allegations of corruption.

Until recently, London 2012 appeared to have been spared the Olympic blight. Only a dispute over which football team would assume responsibility for the Olympic stadium after the Games managed temporarily to darken the blue skies over Stratford.

But the lack of a clear divide between the responsibilities of the UK bodies involved in organising next year’s Games gave rise to a row over money that threatened another stain on the world’s biggest sporting jamboree.

No clear divide
At the heart of the dispute were two bodies, the British Olympic Association (BOA) and the London Organising Committee of the Olympic Games and Paralympic Games (Locog).

The government-owned Locog is responsible for staging the 2012 Games. It is led by Olympic gold medal winner Lord Coe, the chairman, and chief executive Paul Deighton, a former Goldman Sachs partner. Locog, which is mainly funded from the private sector, promises on its website that “a total of £2 billion will be raised from sources including sponsorship, broadcasting rights and selling merchandise”.

Where Locog was established six and a half years ago, the British Olympic Association has overseen UK participation in the Olympic Games since 1905. The BOA says its principal role is “to prepare and lead our nation’s finest athletes at the summer, winter and youth Olympic Games”.

But there has been confusion over the BOA’s true role and a suggestion that, in its efforts to define that role, it may have overreached itself financially. When Locog announced in March it was suspending Lord Moynihan and Andy Hunt from its London 2012 Olympic Board meetings, it was the latest twist in a row over Games money.

Undermining the 2012 vision
The row centred on the host city contract, the agreement drawn up in 2005 between the International Olympic Committee, the British Olympic Association and the city of London. It determines what portion of any profit from the London Games should go to which organisation, and states that 20 per cent of any surplus “resulting from the celebration of the Games” should go to the British Olympic Association.

But the BOA believed it was short-changed by the terms of the host city contract. It was concerned that the 20 per cent stipulation should apply only to the budget for the Olympics and not for the Paralympics, which could make a loss. What is more, the privately funded BOA is facing a financial crisis. On 2 March Andy Hunt warned that it might need an extra £4m to fulfil its ambition of fielding a 55-strong Team GB in 2012.

Jacques Rogge, who heads the International Olympic Committee (IOC), the Games’ governing body, invited Lords Coe and Moynihan to IOC headquarters in Lausanne on 7 March in a bid to settle the dispute, but the BOA declined to attend.

The IOC subsequently ruled in favour of Locog, that profits from the Olympics and Paralympics should be counted together. The International Paralympic Committee, led by Xavier Gonzalez, went on to accuse the BOA of “undermining the vision” of London 2012 as a single sports festival.

On 10 March, the BOA upped the ante by announcing it planned to take the dispute over how the surplus Games money is to be used to the independent Court of Arbitration for Sport (CAS).

After being leant on by the government and the IOC, the BOA announced on 6 April it had agreed to suspend legal against against Locog,

Working with UK Sport
Andy Hunt’s warning about his association’s finances was not the first time alarm bells had sounded about BOA finances.

Eyebrows were raised in some quarters when, in 2006, Lord Moynihan hired Sir Clive Woodward, former coach of England’s World Cup-winning rugby union team, as British Olympic Association performance director. Sir Clive’s responsibilities justify a reputed yearly salary of £300,000.

That appointment came to symbolise Lord Moynihan’s wish to make the BOA the hub of British sport rather than UK Sport, the government-funded agency headed by Baroness Sue Campbell which describes its responsibilities as “to underpin and unlock the nation’s Olympic and Paralympic performance potential”.

Sir Clive appeared to signal a rapprochement between BOA and UK Sport when he told The Independent in 2009: “The biggest change I’ve seen in the BOA in the last two years is how we are working much more closely with UK Sport in making sure we are right at the table with them on the performance… For me to be invited onto their Mission 2012 board was a big step forward because it has enabled me to get into vital areas of sport.”

But in February of this year, in a move that attracted little public notice, Sir Clive was among three prominent board members (the other two were Steve Cram and Dame Tanni Grey-Thompson) who stepped down from Mission 2012 in order to “focus on their individual roles elsewhere in the run-up to 2012”. Reports in recent days have linked Sir Clive with a return to rugby as performance director for the Rugby Football Union.

Host city curse
With little more than a year to go before London 2012, Lord Moynihan and Andy Hunt knew they were playing for high stakes in turning the focus on the UK’s administration of the Games.

Before the BOA’s decision to suspend its legal action, IOC spokesman Denis Oswald said he believed the BOA has no chance of winning its potentially costly claim for a greater share of the surplus, commenting: “It could have been avoided. The sooner it is settled, the better, so that we have it behind us.”

Meanwhile, Sports Secretary Jeremy Hunt announced he was “very concerned” by the developments, telling the BBC: “It’s an extraordinary thing, just over a year before the Games, that we’re getting into this sort of dispute which, frankly, isn’t going to benefit anyone.”

Lord Moynihan stated on 28 March that the British government will intervene to help resolve the matter: “The government has agreed to a meeting to discuss an amicable resolution to the current contractual dispute.”

The dispute has highlighted the need for a clarification of the BOA’s purpose. And it may have ensured that the London Games, like so many of its predecessors, has fallen prey to the “host city curse”.