● From our sister site, TheSportsExaminer.com ●
The Commonwealth Games Foundation had a difficult time finding a host for its 2026 Commonwealth Games, until Australia’s Victoria region agreed to take the event in April of 2022. Now Victoria is out.
Victoria State Premier Dan Andrews said at a bombshell Tuesday news conference that the projected cost of the event had ballooned from the allocated A$2.6 billion (~$1.78 billion U.S.) to at least A$6 billion (~$4.10 billion U.S.), up to A$7.0 billion or $4.78 billion U.S.
“And I cannot stand here and say that I have any confidence that that even seven-billion dollar number would appropriately and adequately fund these Games. I think it could be more than that. …
“I will not take money out of hospitals and schools to fund an event that is three times the cost as estimated and budgeted for last year.”
Andrews added, to be clear:
“I’ve made a lot of difficult calls, a lot of very difficult decisions, in this job. This is not one of them. Frankly, $6-7 billion for a 12-day sporting event, we are not doing that. That does not represent value for money. That is all cost and no benefit.”
Andrews said the budgeted funds will now go to A$1 billion for 1,300-plus affordable homes across the state, the new sports venues that would have been used for the Games, and a regional tourism effort that was an important element of the Games project. Andrews noted that negotiations with the Commonwealth Games Foundation on the cost of breaking its hosting contract have not been completed.
The Commonwealth Games Foundation posted a statement that included:
“The numbers quoted to us today of $6 billion are 50% more than those advised to the Organising Committee board at its meeting in June.
“These figures are attributed to price escalation primarily due to the unique regional delivery model that Victoria chose for these Games, and in particular relate to village and venue builds and transport infrastructure.
“Since awarding Victoria the Games, the Government has made decisions to include more sports and an additional regional hub, and changed plans for venues, all of which have added considerable expense, often against the advice of the Commonwealth Games Federation (CGF) and Commonwealth Games Australia (CGA).
“We are disappointed that we were only given eight hours’ notice and that no consideration was given to discussing the situation to jointly find solutions prior to this decision being reached by the Government.”
The CGF added that it is “committed to finding a solution for the Games in 2026.” Oh boy.
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The stunning reversal by the Victoria State government, handing back the hosting duties for the 2026 Commonwealth Games over cost issues just 16 months after agreeing to host it, is reinforcing significant lessons for the international sports community in the post-pandemic era.
In Australia, the recriminations have already started, with Craig Phillips, the head of Commonwealth Games Australia, issuing a Tuesday statement which included:
● “The announcement made by the Victorian Government today is beyond disappointing.”
● “The multi-city model for delivering Victoria 2026 was an approach proposed by the Victorian Government, in accordance with strategic roadmap of the Commonwealth Games Federation (CGF).”
● “The stated costs overrun, in our opinion, are a gross exaggeration and not reflective of the operational costs presented to the Victoria 2026 Organising Committee board as recently as June.“
● “Beyond this, the Victorian Government wilfully ignored recommendations to move events to purpose-built stadia in Melbourne and in fact remained wedded to proceeding with expensive temporary venues in regional Victoria.”
● “The Victorian Government, however, has jeopardised Melbourne and Victoria’s standing as a sporting capital of the world.”
Phillips told a news conference that he was informed of the decision from Victoria at about 8 a.m. Tuesday morning. “I certainly feel let down by the government,” said Phillips, who explained that Commonwealth Games Australia will welcome interest from other states in Australia who might have interest, and “we’ll be doing all we can to be sure that the numbers produced today by the Victorian Government are not taken on face value. They are certainly not a strong indication of what the Games would actually cost.”
He said that he, a member of the 2026 organizing committee board, said he had never heard of the A$6 billion budget figure mentioned by the Victorian government until about 6:30 a.m. Tuesday morning: “The decision had already been taken by the time the government got to talk to us.” (A$1 = $0.68 U.S.)
Were there options? Phillips said cost-containment discussions were already under way:
“There were some measures which could have brought some of the venues back into Melbourne without compromising the desire to have content in regional Victoria. We still were very much supportive of the regional content, but also saw the pragmatic value of moving some of those venues back to Melbourne.
“The velodrome is the best example of that. You have a purpose-built velodrome here at John Cain Arena, but we’re continuing to prosecute running a games in a temporary venue in Bendigo that would have no legacy value. … We think the regional model is still an important one to have, but you’ve got to balance up the pragmatic with some of your ambitions. That’s what we were trying to do.”
And he ripped the Victorian government, which had agreed to host the event in April 2022; “We thought we had a Games. We thought we had a willing host of the Games here in Victoria, but today obviously showed that wasn’t the case. …
“I would be very careful, if I were an international sporting body, coming and doing business in this state in the future.”
Observed: Phillips’ last remark is the most important, but not specific to Victoria. Any government which is looked to for funding for a mega-event is now suspect.
The Indonesian government threw away the FIFA men’s U-20 World Cup because Israel was going to play in it. Then it canceled the ANOC World Beach Games with a month to go, supposedly because of funding issues, but really over Israel again. International Olympic Committee chief Thomas Bach (GER) went out of his way to note that in Tuesday morning remarks.
Indonesia had contracts with FIFA and the Association of National Olympic Committees for both. They meant nothing compared to the internal, pro-Palestine politics of the country, especially with national elections coming next February. FIFA doesn’t seem too upset, as it just awarded its men’s U-17 World Cup – returned by Peru – to Indonesia, to be held in November. Israel did not qualify for that event.
Now comes Australia, with a shining reputation for putting on glorious sporting events, including two Olympic Games and five Commonwealth Games. There was a contract, signed and sealed. And now, nothing.
This is hardly new; Denver returned the 1976 Olympic Winter Games to the IOC in 1973, and then Lake Placid was awarded the Winter Games for 1980. No harm done, right?
But these episodes underscore this reality: sports organizations, right up to the IOC and FIFA, are minnows compared to countries. FIFA is projecting a sensational $11 billion in revenue for the 2023-26 quadrennial; Indonesia’s budget for 2023-23 alone was $200.73 billion U.S.
And Indonesia is poor, ranking 112th in the world in per-capita Gross Domestic Product.
When you do business with a government, you are subject to its sovereign power, something no sports organization can cope with. That’s the lesson of Victoria’s withdrawal from the 2026 Commonwealth Games, and a lesson which needs to be learned by every international organization that brings its events – sports or otherwise – into a country, especially one which is providing financial support.
One more: Phillips said he thought Canada would host a 2030 Commonwealth Games – the first one was held there in 1930 – and New Zealand has interest for 2034. But the question must be raised now whether this event, nearing its centennial, is – as IOC head Bach has said of so many elements of the modern Olympic Movement, an “essential” or just a “nice to have”?
~ Rich Perelman
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