How is bidding done for hosting the Olympics?

On July 23, 2021, the Games of the XXXII Olympiad will begin the celebration of the spirit of Humanity. Tokyo-2020 is expected to clock the viewership impression of more than 4.00 billion (3.50 billion for Rio-2016) on television as no fans are allowed (Japanese or overseas) during the entire games.

As per the official numbers presented by the Tokyo Organizing Committee of the Olympic and Paralympic Games (Tokyo 2020) (OCOG), the overall budget for organizing the Tokyo games is estimated at USD 12.60 billion (JPY 1.35 trillion).

Out of this amount, USD 5.60 billion is expected to be spent by OCOG, Tokyo Metropolitan Government (TMG) will chip in with USD 5.60 billion while the remaining expenditure of USD 1.40 billion will be borne by the Government of Japan.

But, how exactly Japan, or, more specifically, Tokyo was elected to host the Olympic Games in 2020 in the first place, which were the other cities in contention and what was the process followed in electing the Olympic host city. Let us dive into the details of all these questions…

As per the procedure followed by International Olympic Committee (IOC), the process to elect the host city for the Olympics generally begins at least 7-9 years prior to that Olympic year and the final decision is generally made by all the member nations of the IOC along with the executive board of IOC after a detailed analysis of all the bids received, over the period of 2 years.

While the procedure has been updated significantly as per the new IOC guidelines, we will focus mainly on how it was used to award the 2020 Olympics to Tokyo.

Initiation

The bidding process generally starts with IOC sending invitational letters to all the National Olympic Committees (NOCs) to submit the bids for the Olympic games.

After getting confirmatory letters of compliance to World Anti-Doping Agency (WADA) Code from all the NOCs, a time of approximately one month is given to the NOCs to submit the names of the cities interested in hosting the Olympics. There are few conditions that need to be fulfilled by the candidate city in order for NOC to consider its candidature valid:

Approval from the country's NOC is mandatory for the city to submit its bid. In case there are several potential candidatures in the same country for the same edition of the Olympic Games, NOC reserves the right to decide upon the one city that will represent that country during the bidding process

For the 2020 edition, IOC confirmed that it had received bids from six cities which included Istanbul (Turkey), Baku (Azerbaijan), Doha (Qatar), Madrid (Spain) and Rome (Italy), along with Tokyo (Japan). For these cities, IOC generally holds an informatory seminar explaining the IOC rules and regulations to the bidders.

Submission of application files and guarantee letters

Cities interested in bidding for the games are then asked to submit the application file/docket to the executive board of IOC along with financial guarantees and letters of guarantees from various stakeholders.

These guarantees include many assurances like no other event will take place during the Olympic games or one week before or after it, along with a guarantee that all the Olympic-related goods will be imported without any customs duty.

Even though all the six interested cities filed their application form for the race to host the 2020 games, Rome backed out at the last moment citing the difficult economic situation which prevented the Italian government from providing the necessary financial guarantees as required by IOC.

Thus, leaving only five cities in the fray in the subsequent round of the selection process.

The application files and the guarantees received from all the interesting cities are then scrutinized thoroughly by IOC during the period of 3-4 months, and based on their assessment, the official announcement regarding the official candidate cities is made by the Executive Board of IOC. This announcement is usually based on the critical assessment of the application files.

IOC scores all the applicants based on different parameters to assess the quality and feasibility of the applicant cities. The parameters include the basic concept of the game, Accommodation facilities, Transport facilities, safety & security, telecommunication, government and public support, Finance & marketing, etc.

In the 2020 bidding process, after the initial scrutiny, in May-2012, it was announced that Baku and Qatar would miss out on the next stage, and Tokyo, Madrid and Istanbul will make it to the list of official candidate cities for hosting the 2020 Olympic Games. The detailed and transparent analysis of points scored by each of the cities on every parameter was made public by IOC.

Submission of the candidature files & IOC Visit

All the official candidate cities are then required to present a detailed proposal regarding their Olympic project, which is captured in the candidature file of each city. The file essentially captures the blueprint of the Olympic dream realized by the respective city across 14 themes of the IOCs candidature procedure and questionnaire.

The overall concept of the games, legal, political, financial and marketing aspects of the game are a few of the other facets that are covered in this candidature files. The files are normally presented in English as well as the French language in a specifically drafted format as specified by the IOC.

The file presented by the Tokyo organizing committee was a report spread across 200 pages and three volumes.

The submission of these files is then followed by the visit by the IOC evaluation committee to all the candidate cities within a span of a month, during which it basically takes stock of the on-ground situation. Each city makes a most of this opportunity to explain why it wishes to be selected to organize the Olympic games and how it offers a unique vision and opportunity to contribute to the Olympic movement.

Based on these visits, the evaluation commission of IOC then files a detailed report citing strengths and problems with each bid, which is presented to each of the IOC members. Evaluation commission is generally announced by IOC in advance and along with senior IOC officials, the commission comprises of representatives of the Olympic Movement and a number of technical advisors.

The evaluation report for the 2020 Olympic games can be accessed here:

https://stillmed.olympic.org/Documents/Host_city_elections/2020_Evaluation_Commission_report.pdf

The Final Vote

The selection process culminates with a voting stage wherein all the IOC members vote for the candidate cities to elect the host in a democratic way. The voting is a part of the IOC session celebrating the international meet of all the IOC members.

During the session, each city is generally provided with an opportunity to give a 45 minutes presentation to the members, which is then followed by 15 minutes of Q&A. Floor is then opened for the voting process. As per IOC voting regulations, in each round, each participating IOC member can vote for only one city and only those IOC members who are not nationals of the countries of the candidature cities are permitted to vote.

After the first round of voting, if none of the candidature cities are able to obtain the majority(50%), the city which has received the least votes leaves the competition and the voting continues till the majority of the votes are received by any of the candidates. The winning city thus guaranteed to host the games is then officially announced by the IOC president and the NOC & city then signs the Host City Contract.

The voting for deciding the host for the 2020 Olympic Games took place during the 125th IOC session held in Buenos Aires on September 07, 2013. After the first round of voting, while Tokyo received the highest number of votes (42), Istanbul and Madrid were tied for second place with 26 votes each.

Tie-breaker voting was then conducted only between Istanbul and Madrid to decide upon the city which will enter in the last round of voting alongside Tokyo. Istanbul won that vote with a slim margin of only fouur votes (49-45). In the final round of voting, though, Tokyo triumphed in a dominating manner beating Istanbul by a margin of 60-36.

"All three cities were capable of staging excellent Games in 2020, but in the end, it was Tokyo's bid that resonated the most with the IOC membership, inviting us to "discover tomorrow" by delivering a well-organized and safe Games that will reinforce the Olympic values while demonstrating the benefits of sport to a new generation."

- IOC President Jacques Rogge

Problems with the old selection process

• Corruption

The Olympic bidding process is frequently accused of corruption at various stages. In 1998, during the bidding process of the winter Olympics, the accusations surfaced that the IOC members accepted bribes over USD 1.0 million from the Salt Lake City Organizing Committee (SLOC).

As an after effect, six IOC members were expelled and four others resigned. Again in 2008, during the bidding process of the 2016 Summer Olympic Games, allegations spread that, indirectly in connection with and/or on behalf of Qatar, a former member of the IOC and president of the International Association of Athletics Federations, Lamine Diack, tried to bribe various IOC members.

In the wake of the aforementioned suspicions, Doha was disqualified as a potential recipient of the 2016 Summer Olympics.

• Lack of sustainability

Till very recently, all the candidature cities used to focus on presenting their case with some large and extravagant infrastructure plans with very little attention on the sustainability aspect of it. Most of the venues built for hosting the games in Rio-2016 were seen rotting due to lack of proper attention.

Thus, forcing the money spent to go down the drain. There was hardly any focus on reusing the infrastructure for the local community or building temporary venues which can be torn down without any additional cost to free up space for the local population.

• Cost taking its toll

The hosting of the Olympics, which was considered an affair of prestige for the host country, has started taking its toll on the finances of the country. It is becoming an exceedingly expensive affair which is only made worse by the COVID-19 pandemic.

Each of the last five summer Olympic games has resulted in a total cost of well over USD 10.0 billion for the host city. This speed of cost increase is not matched by the international sponsorship deal and global media rights. Rio-2016 Olympics games marked a loss of USD 4.0 billion to the organizers and the costs of USD 13.0 billion overshot the revenues of USD 9.0 billion generated mainly from sponsorship deals and media rights.

Citizens of the country have started weighing the option of hosting the Olympics against creating permanent development measures in society. This has forced the potential Olympic bidders out of the selection process. In the bidding process of the 2022 winter games, as many as five withdrawals were recorded citing a lack of local support.

In the selection process of the 2024 Summer Olympics host, numerous potential bidders like Boston, Budapest, Hamburg and Rome withdrew their applications leaving only Paris Los Angeles in the fray for the vote. Faced with the prospect of potentially having no qualified applicants for the 2028 Summer Games, the IOC awarded Paris the 2024 event and simultaneously awarded the 2028 Games to Los Angeles.

To counter all these allegations, in 2014, IOC passed the Olympic Agenda-2020 consisting of 40 new additional reforms directed at improving the bidding process to eliminate the existing flaws.

About Olympic Agenda-2020

The reforms to change the selection process began in 2014 with unanimous approval by full members of IOC. Olympic Agenda-2020, a strategic roadmap for the future of the Olympic movement that focuses on increasing sustainability and legacies, led to a major overhaul in all the aspects of organizing the Olympic Games and Youth Olympic Games.

The agenda heavily emphasizes Flexibility & Contextualization, Sustainability & Legacy, Partnership & cost efficiency. Under this approach, the bidders are encouraged to use the existing or temporary facilities in the cities which have resulted in up to 80% cost reduction in the bid budget of the 2026 Winter Olympic Games compared to 2018 and 2022 games. The new approach was unanimously approved by the IOC session in June-2019.

This approach is divided into two paradigms viz. Continuous dialogue and Targeted dialogue. Under Continuous dialogue, the IOC is open to discuss the project of any games on a non-committal basis with any of potential host interested in hosting an Olympic Event.

In this dialogue, the IOC Executive Board (IOC EB) constantly analyses and monitors the position of this future game host and provides it with a feasibility assessment on a regular basis, thus helping it towards building a systematic and sustainable solution towards Olympic hosting.

Upon the confirmation by IOC EB, the bid for the city enters in the second paradigm, which is a targeted Dialogue wherein the discussion with the preferred host(s) takes place to finalize and award a Summer or Winter or a Youth Olympic to a specific interesting City. This entire process is guarded by a future host commission.

Discussion of hosting the Olympic games based on non-committal and non-edition specific level is expected to help the interested cities in ensuring that the sustainable concepts are aligned with the local community needs and existing long-term development plans of the city.

Additionally, the non-requirement of formal submission of documents and guarantees will help in reducing the costs significantly when the interested cities will be served by IOC with the expert opinion and other direct services at its own cost, thus increasing the interest amongst the local community in hosting a world-class event like THE OLYMPICS.

The first direct beneficiary of this new scheme is Brisbane city, which has been selected for the targeted dialogue in February-2021 for the 2032 Summer Olympic Games.