International sporting event bid processes, and how they can be improved.

AuthorGauthier, Ryan
PositionARTICLES
  1. Introduction

    On December 2, 2010, the Federation Internationale de Football Association ("FIFA") will announce the hosts of the 2018 and 2022 Football World Cups. For the successful hosts, this is only the beginning of a long road that will certainly have its share of economic and political problems, but will likely culminate in a month-long worldwide celebration of sport. As much work lies ahead of the hosts, it is also true that much work was required to win the rights to host.

    The sports industry is a global phenomenon with global impacts. Economist Brad Humphreys estimates the economics of the sports industry in the United States alone as being valued from $44-$73 billion in 2005. (1) Plunkett Research puts the size of the sports industry at an even more spectacular $414 billion. (2) Regardless, it would be safe to say that the economics of sports are staggering. A particular example would be the 2010 FIFA World Cup. The cost to South Africa of hosting the 2010 World Cup was estimated in 2008 at $3.7 billion (30 billion Rand), (3) but more recent estimates are almost $5.4 billion. (4) This equates to approximately 1.72% of South Africa's Gross Domestic Product. (5) To put this into perspective, the agricultural industry of South Africa comprises 3% of its GDP. (6)

    In most advanced societies, organizations with such a large economic impact would be subject to some form of regulation or oversight by the national government. This is what happens with the local organizing committees of various international sporting events. (7) But this is not the case with the international sporting organizations that select which country will host the event. To return to the World Cup example, the governing body, FIFA, is an association governed under Article 60 of the Civil Code of Switzerland, (8) but has a regulatory and economic impact of its own across the globe. This is troublesome when concerns of impropriety and corruption arise. As these international organizations often cannot be reached by the laws of the government in which they stage their games, recourse is generally limited to what an organization decides to do internally. (9) The lack of accountability to national governments, aside from those that host the headquarters of the organization, can be problematic.

    In addition to the nations where the games are held, the international sporting bodies themselves have an interest in creating more transparency. Michael Payne, the former Marketing and Broadcast Rights Director for the International Olympic Committee ("IOC"), makes this point in his book, Olympic Turnaround. Payne points to the difference in coverage between the Salt Lake City corruption scandal, and a scandal in the European Commission around the same time. The Salt Lake City scandal involved payments and gifts to delegates, which totaled $400,000, (10) $800,000, (11) $1.2 million, (12) or upwards of $10 million. (13) The same year the Salt Lake City scandal broke, the European Commission lost $5 billion of its $107 billion budget to fraud, (14) leading to the resignation of the entire 20-member European Commission. (15) Payne examined the staying power of the Salt Lake City scandal and the quick diedown of the European Commission scandal, and concluded: "People have lower expectations of bureaucrats and politicians than of the stewards of the Olympic Games. It is the IOC's job to make sure they are never disappointed." (16) This faith in the international organizations is precisely why it is in their interest to be better than governments when it comes to transparency, especially when millions of dollars are involved.

    Over the years, this faith has been shaken. The corruptions surrounding Salt Lake City and Nagano are now becoming a distant memory. However, more recently, it has been revealed that Delhi and Hamilton offered tens of thousands of dollars to voting nations in an effort to win the rights to host the 2010 Commonwealth Games, and that there have been improprieties in securing the 2018 and 2022 FIFA World Cups, discussed later in this article. There are concerns with the biases of executive committees and the decisions to select hosts that seem to defy all logic. While not everyone can be happy with the selection of a particular host (especially the unsuccessful bidders), much of the anger is more than simply "sour grapes".

    This article aims to examine the bidding structures used by international sports organizations, and to inquire into potential alternatives. This article posits that a written process, that is not easily alterable, combined with a regional voting structure and a published technical report, is a process that will enhance transparency and improve the processes of host selection. Part II of this article will examine the selection processes of several international sporting competitions: the FIFA World Cup, the Olympics, the Cricket World Cup, the Union of European Football Associations EURO Championship, the Federation Internationale de Basket-ball's World Championships, and the Commonwealth Games. Part III of this article will then examine the structural problems with the process. Part IV then sets out the practical problems that arise as a result. Part V of this article will examine possible alternatives to host selection and its process. Part VI will suggest a more efficient, transparent process.

  2. Internatonal sporting event Host Selection Processes

    Each international sporting organization has unique events, organizational models, traditions, and processes. This Part will outline these aspects for the world's largest international sporting events, often termed "mega-events": (17) the Olympics, the FIFA World Cup, the Cricket World Cup, the EURO Football Championships, the FIBA Championships, and the Commonwealth Games. Although competitions like the Super Bowl of the National Football League are of a large scale and rotate their hosts, this article focuses on trans-national events.

    For each organization attention will be paid to: the event; the governing body structure; the relevant history of host city selection, when available; the current process; and recent host selections and controversies surrounding those selections.

    1. The Olympic Games

      The Olympic games are a series of multi-disciplinary events held in individual cities in both the summer and winter. The Summer and Winter Olympic Games are each held every four years, and alternate biennially (i.e. 2004 Summer Olympics, 2006Winter Olympics, 2008 Summer Olympics, etc.).

      The International Olympic Committee ("IOC") is a non-profit, nongovernmental body situated in Lausanne, Switzerland. (18) The IOC is divided into the Session and the Executive Board. (19) The Session determines the host city of the Olympic Games. (20) There are up to 115 members, spread across four categories. First, 70 members are what one might call "members-at-large", who have no defined office but represent the IOC in their country. (21) Although members are not representatives of countries, there cannot be more than one member per country in this first category. Secondly, there are up to 15 active athletes who are members of the IOC. Third, there are up to 15 presidents or senior leadership of the various International Federations of the various Olympic sports, who are IOC members. Finally, up to 15 presidents or senior leadership from National Olympic Committees ("NOCs") round out the IOC. (22) The Executive Board is made up of the President and fifteen other members, (23) and establishes and supervises the procedures for selecting candidates to organize the Olympic Games. (24)

      The Olympic Games had their origins in Olympia, Greece in 776 B.C.E. (25) For years, the only event was a 200-yard dash, but soon other running events and the pentathlon were added. (26) The Games were held until at least 385 C.E., and likely later, until all forms of pagan worship were abolished by Christian Byzantine Emperor Theodosius I. (27) French nobleman Pierre de Coubertin created the modern Olympic Games in the late 1800s, establishing the IOC in 1894, with the first modern Olympics held in Athens, Greece, in 1896. Since then, the Games have been a primarily European affair, with 61% of the Games hosted by European cities.

      Although there have been political and economic problems with the hosting of other sporting and non-sporting events, problems arising from hosting the Olympic Games appear to take on a special significance. The most obvious political problems have been the boycotts of the 1980 Moscow, and the 1984 Los Angeles Olympic Games by the U.S.A. and the U.S.S.R., respectively. (28) Another problem with hosting has been economic. Those opposed to hosting an Olympic Games also commonly point to the 1976 Summer Olympics, held in Montreal, which racked up over $1 billion in costs. Although the Los Angeles Games turned a profit with the rise of media rights, and Sydney is another success story, the Olympics are not realistically a money-making venture.

      Despite the political and economic concerns with hosting the Olympic Games, it was not until the late 1990s that the process used to select hosts came under scrutiny. In December of 1998, Marc Hodler, a Swiss IOC member, went public with the information that IOC members had taken bribes in awarding Salt Lake City the 2002 Games. (29) Ski trips, college scholarships, cash payments, and payment of medical costs were the order of the day in an attempt to woo IOC members to vote for Salt Lake City. (30) The scandal lead to investigations by the US Department of Justice, the IOC, the United States Olympic Committee, and the Salt Lake Organizing Committee. The heads of the Salt Lake City Organizing Committee resigned, while the scandal lead to the expulsion of six IOC members, the resignation of four members, and warnings being issued to ten other members. (31)

      The current process to select host cities is a multi-tiered process that was...

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