I have been reading with interest David Owen’s assessment of the current financial state of the Olympic Movement and reflecting on how so many things have changed since West Nally responded to the desperate financial plight the IOC faced in the 1970's that resulted in us establishing the Olympic Partner programme, widely referred to as the TOP programme.

Our initial involvement was with Lord Killanin and the all-powerful Monique Berlioux during the period when the IOC suffered significant setbacks at both Munich 1972 and again in Montreal 1976. The organisation was close to bankruptcy when Horst Dassler co-opted me to join the campaign launched by Juan Antonio Samaranch to run for IOC President at the election in Moscow 1980.

For a number of years, we planned and plotted, looking at separating the Summer and Winter Olympics hosting, what high profile sports should be added to the calendar, how do we get control of the Olympic Rings to support our exclusive marketing approach.

One thing that was clear and essential at that time was to keep matters, especially finances, at a manageable level.

Despite our attempts to move the IOC to Monaco, Samaranch, and specifically Berlioux, wanted to stay in Lausanne and advocated quite strongly that the then Olympic House could only house 100 staff, a level deemed more than sufficient for their future needs.

Even back then, there was fear of the administration getting distracted from the primary objectives as documented in the Olympic Charter and taking on superfluous roles.

Samaranch was a great strategist and a skilful politician and quickly saw the relevance and need of our marketing approach and the need to secure both the Olympic Rings ownership, the change of event cycle and securing higher profile sports, all important to maintain and secure the Olympic future.

The fact that the innovative approach created untold wealth created a whole new challenge. With money and power comes corruption.

The Future of the Olympic Games and IOC 

I am worried that the Olympic Movement is again at a crossroads, not seen since the Salt Lake City bribery scandal of 2002. A crisis that was, against all odds, solved mainly by the legal brilliance of the then IOC director general Francois Carrard with the support he secured from the great Henry Kissinger.

They turned the United States Congress around from effectively enforcing a US corporate boycott of the Olympics based on an undertaking of a reform process that was highly effective for its time.

Has the IOC learnt from the past? It needs to be extremely wary of the vast fortunes being generated and to continue to reinvent and evolve a business model for the emerging challenges of the 21st century.

At the time in 2001, some potential circumstances would now be unthinkable; No NBC, No Coca-Cola, No McDonalds - both founders of the TOP programme concept approach back at Moscow 1980. Without them, there would have been no Olympic Games.

Rumour has it that even the City of Lausanne, had asked the IOC to consider a relocation.

In many ways, I am fearful that the current IOC situation could be the next perfect storm, especially when you look at the prevailing and now greatly expanded ecosystem that has evolved from the riches we helped to create.

Let us consider the numbers first.

Television rights overall, especially in the core US market are under pressure. The recent Australian rights deal from 2024-2032 for AUD$305 million (£158 million/$191 million/€182 million) is staggeringly low when you extrapolate this to 2032 in the “must have” Australian market.

The IOC NBC deal for USA up until 2032 is also understood to be under increasing pressure from NBC parent, Comcast, to seek concessions around the deal that will impact the Olympic Movement significantly.

The delaying of Salt Lake City as host for the Winter Olympic Games until 2034 is part of the IOC’s response.

As much as the Olympic Movement attempts to beat up the television rating numbers, in reality, they are decreasing with no sign in sight of a strategy to turn this situation around.

A reported $600 million (£495 million/€570 million) - with the true figure rumoured to be actually $750 million (£618 million/€713 million) - has been invested into a digital startup platform, known as the Olympic Channel, only for NBC to recently replace the platform with its own native streaming platform, Peacock, as the Olympic Channel did not hit the desired numbers.

Has the multi-million dollar achieved its objectives? What was the strategy and corporate governance that supported the decision behind such an investment in an Olympic Channel. Was it wise for the IOC and its members to invest such a staggering amount?

It is also worth considering the current state of play of the TOP sponsorship model. It was a model we created in the 1970's that has serviced the Olympic Movement so well over many years but with the lack of creativity I see this is also now under pressure.

I note that on the Los Angeles 2028 website, you see only nine TOP partners currently committed compared with 14 for Paris 2024. Assuming each partner puts in a minimum of $500 million (£412 million/€475 million) , this is a potential $2.5 billion (£2.1 billion/€2.4 billion) gap in future cash flows.

In a nervous global market, a newly appointed Director of the IOC commercial arm TMS will have their hands full as will the all-powerful IOC chief operating officer Lana Haddad.

Recent articles by Owen shed some light on what the fallout of a decision by the IOC is now - clearly to force a sovereign nation like Japan into hosting the Olympic Summer Games and the corruption prosecutions that have followed in Japan with Dentsu.

Could the news get worse? It appears that several of the TOP and Olympic stakeholders are starting to question the significant growth of the IOC administration, which, depending on how you count the consultants, has apparently reached over 1,500 people based in the new headquarters in Lausanne, at Olympic Broadcasting Services (OBS) in Spain and TMS.

The cost - or was it an investment? - into Olympic House was a further staggering $170 million (£140 million/€162 million).

I often get asked, "What do all these people do and was such an extravagant headquarters really necessary? Is it a vanity project for the IOC administration of no benefit to Olympic sports and certainly not of benefit to Olympic athletes?"

Even I was surprised by the recent IOC’s financial account disclosures in the US showing the extraordinary and extravagant salaries paid to its senior leadership team - especially when these amounts were not disclosed in the IOC’s accounts published on its own website.

The commitment of the Olympic Movement is to maintain no more than 10 per cent of all revenue to go into administration. Many are now estimating that this is more like 30 per cent.

My question is: do IOC members know what is the real number? With finances running across the IOC - what seems to have been disclosed - TMS, OBS and the Olympic Games should it be a consolidated group set of accounts that needs filing to get a true picture of the financial position of the Movement.

From a supposed "founding father of the sports marketing industry" I think the market trend clearly shows a commercial model that is ageing, one that needs a new creative approach, which when combined with a headcount that appears to be spiralling out of control, with scandal revelations around their marketing partners, could the Olympics be heading into its own Iceberg.

In an age of true social responsibility, commercial partners need to ask, and need to be reassured, that their investment is sound. The Olympics is about athletes but are they benefiting in any way from all this extraordinary investment?

Is the current model sustainable?

With so much money sloshing around the system, yet how much of it is directly allocated to the athletes?

Let us also consider the role of Governments now in the global circus.

It has been enormously convenient for the IOC to distance itself from Governments, at least in the public domain, but what are the real facts.

• The IOC, like the Vatican, is one of very few organisations to have lobbied for and received official observer status at the United Nations. If you wish to distance yourself from Governments, why is it necessary to put yourself in the very centre of them? Is it for personal reasons?
• The reality is the IOC is completely dependent on Governments for its very survival as they are required to underwrite the Games risk. Actually, they essentially take all the risk and in reality, extremely limited reward. Tokyo was a terrific example of this, effectively forced into hosting an Olympics in the middle of a global pandemic with the IOC, through its non-negotiable Host City Contract, ensuring the Games took place, “for the athletes.” Whilst I am sure we all fully agree this was great and much needed for the athletes, was it so needed for the people of Japan at the time? Sponsors such as Toyota for example rightly decided not to activate their sponsorship of the Games given more than 80 per cent of the national population was against them going ahead.
• The war in Ukraine has further shone a very bright light on the leadership of the IOC, as they are now trapped in virtual “no man’s land” on the front lines trying to work out where to jump, Russia or Ukraine. In fact, when the President of Ukraine invited the IOC President to the front lines to see which side to jump towards, he politely declined and then the Ukrainian National Olympic Committee started receiving some heavy-handed letters.
• It now seems the United Kingdom Government, in partnership with many other nations across the world, are seeking to call the IOC bluff and take matters into their own hands. They seem to be taking much more interest in the past relationship between the Russian President Vladimir Putin and his involvement with the Olympic Movement.

So where does the IOC head next in its relationship with Governments? Perhaps it will follow the model of the Vatican and establish an Olympic Sovereign State.

This would seem a logical path, with clear parallels such as the so-called Olympic Charter being treated as the Bible and its members as its Bishops! Time will tell how many disciples follow.

At least the IOC masterminded the eradication of the Global Association of International Sports Federations - GAISF - so that this industry group could pose no threat or opposition for a different sporting religion.

All in the name of "Good Governance" 

The catch cry of the IOC leadership over the last few years has been around good governance across sport and they have set about putting in place many structures and directives to ensure this happens.

Recent exposure in Tokyo of contract rigging is probably just the tip of the iceberg with the IOC promoting request for information and request for proposal processes across the Olympic Movement that appear to be creating considerable concern.

As alleged in the Tokyo 2020 case, it seems in the Olympic context they are often used to select those companies most in favour with the IOC or the Organising Committee staff.

The current test event criminal investigation in Japan around Tokyo 2020 that led to guilty verdicts against those involved from Dentsu is, I feel, just the start of this process.

In 2018, the International Paralympic Committee (IPC), under the leadership of Brazilian President Andrew Parsons, quickly sold all its commercial rights to the IOC in a secretive deal.

It is also understood to have just settled a major legal battle in the UK High Courts in relation to its entitlement to all the rights it sought to sell.

It is also understood the case claimed these rights were essentially linked to the appointment of Deloitte as a recent top sponsor and other TOP sponsors.

Deloitte most likely unwittingly entered one of the so-called IOC request for information/request for proposal (RFP) processes in this instance for “Games Learning and Technology” that was a core part of the case.

According to public court documents at the time, it was alleged this caused great damage to a long-term and loyal partner of the IPC and probably now risking Deloitte’s reputation as a global auditor if the allegations and facts are ever aired in open court.

This may be quite an insight rarely seen about how the Olympic and Paralympic Movement staff really conduct themselves in secret to achieve ownership and control of partners intellectual property.

It might also be a complicated process in managing conflicts of interest for another of the so-called big consulting firms like PWC has just experienced in Australia with a report discovering that some partners prioritised profit above ethics.

Interestingly, recent questions aired in the Australian Parliament about the IOC’s latest TOP sponsor Deloitte’s role in recommending the quashing of a proposed Olympic Development Authority for the 2032 Games in Brisbane by Senator Richard Colbeck.

There is also, of course, the fact that recently appointed chief executive of Brisbane 2032, Cindy Hook, came from Deloitte.

Hmmm, my long history in the Olympic Movement suggests there is more to come here.

Having a management consulting rather than product-based partner in the TOP programme is fraught with so many potential conflicts of interest. I would also hate to think what this action cost the IPC, who has clearly decided to hide it from their membership as having just completed a General Assembly with not one mention of it.

The relatively recent - in Olympic timelines - IOC Games Learning RFP - that is believed to have triggered much of the UK High Court case - has major ramifications. We understand the process the IOC went through is essentially the same process that was undertaken in Tokyo, with the same IOC staff responsible for the IOC Games Learning RFP and Tokyo 2020 test event/readiness programme portfolio, most of them being former London 2012 and/or Deloitte staff. It seems the Japan investigation may well find its way to Lausanne.

In line with the commitment of only 10 per cent being spent on administration, has the IOC Games Department found a clever way of balancing the books? In the so-called Host City Contract is what is known as a Games “General Retention Fund.” This appears to be an effective way to create a fund to bury spending that would breach the questionably claimed 10 per cent threshold.

The questions will require clarity on what margin should be applied by the IOC, and how much is really being spent on the IOC administration. Perhaps the current Senate Inquiry around Brisbane 2032 in Australia, may well be the appropriate forum for the taxpayer there to ask the question, “how are these numbers justified?”

I think there will be further calls for a group set of accounts across all IOC entities, including the Olympic Organising Committees, so there can be no effective double accounting. Across four prevailing Olympic Organising Committees this number is in the tens, if not hundreds of millions of US dollars.

It seems the IOC is diversifying its business model to that of the big four consulting groups by providing services with questionable margins and significant conflicts of interest. This raises further questions as it is quite a shift from a rights based commercial model, how will this reconcile with Deloitte holding the "Management and Business Consulting Services" category, and how will these services provide value for money "for the athletes"?

Having been so intimately involved in the evolution of our modern-day Olympics I do have a real concern about trust.

If you are a Government funding a Games, do you still trust the IOC and IPC? If you are a broadcaster paying to televise the Games, do you and your audiences still trust the IOC and IPC? If you are a sponsor, do you and your customers still trust the IOC and IPC?

Most importantly if you are an athlete, do you trust the IOC and IPC?

It took years to build such trust but things in this digital age can change attitudes in an instant. If things had been judged differently in the light of the Salt Lake City 2002 bribery scandal, would the IOC still exist today?

Finally, we need to consider two of the most important stakeholders, the athletes and International Federations that are effectively the artists and theatre owners.

The International Federations provide the field of play and adjust their calendars to fit around both the Olympic and Paralympic Games, yet what do they get in return?

In an Olympic context this is relatively small, for example if you take the International Ski Federation that makes up 50 per cent of the Winter Olympic Games programme, it receives around $40 million (£33 million/€38 million).

If you are one of the new sports on the Olympic programme, such as sport climbing or surfing, you were informed by the IOC you will get zero dollars for multiple editions, even though the very reason your sport is being "accepted" into the Games is because it is essential to revitalise the product for younger audiences.

I do understand that, after much lobbying by the new International Federations, they were provided a token amount each following Tokyo 2020.

As the IOC holds no contracts with International Federations, you instead are being corralled into agreeing the next move of the IOC to gain value back down the value chain by seeking to control the Olympic Qualification Events so they can sell them to sponsors or at least top up the value to fledgling existing sponsors.

It seems that the IPC is even worse, even now with what is believed to be significant sums paid to the IPC from the IOC in return for all marketing rights, Paralympic International Federations receive virtually nothing from the IPC.

Yet it is understood that the IPC President now has a handsome salary each year when the annual budget of many of the Paralympic International Federations is just over $100,000 (£82,500/€95,000) to run an entire sport.

Finally, let us now consider arguably the most important stakeholder of them all, the athletes.

Even the IOC says that everything is about the athletes, yet they receive no direct remuneration at all. My concerns seem to echo the United States Olympic & Paralympic Committee and its recent statements that the financial models that have sustained the Movement since Los Angeles 1984 need to be re-imagined.

This sits alongside comments by renowned academic and sports leader, Dr Tanoika from Japan at the recent Global Sport Agora that I attended last month where she conveyed the true thoughts of the Japanese people, putting it very succinctly, how the IOC’s drive to deliver Tokyo 2020 stole the dreams of the Japanese public.

It is not easy to alienate an entire country that has been the financial lifeblood of the TOP programme for so many years such as Japan.

So, let us hope that in addition to all the social and cultural events in Mumbai there will be time for a robust debate on such topics at the IOC’s upcoming Session so that the lurking iceberg can be avoided.