Editor's Note: Ryan Gauthier is Assistant Professor at Thompson Rivers University in Canada. Ryan’s research addresses the governance of sports organisations, with a particular focus on international sports organisations. His PhD research examined the accountability of the International Olympic Committee for human rights violations caused by the organisation of the Olympic Games.

Big June 2019 for Olympic Hosting

On June 24, 2019, the International Olympic Committee (IOC) selected Milano-Cortina to host the 2026 Winter Olympic Games. Milano-Cortina’s victory came despite a declaration that the bid was “dead” just months prior when the Italian government refused to support the bid. Things looked even more dire for the Italians when 2006 Winter Games host Turin balked at a three-city host proposal. But, when the bid was presented to the members of the IOC Session, it was selected over Stockholm-Åre by 47 votes to 34. 

Just two days later, the IOC killed the host selection process as we know it. The IOC did this by amending two sections of the Olympic Charter in two key ways. First, the IOC amended Rule 33.2, eliminating the requirement that the Games be selected by an election seven years prior to the Games. While an election by the IOC Session is still required, the seven-years-out requirement is gone.

Second, the IOC amended Rule 32.2 to allow for a broader scope of hosts to be selected for the Olympic Games. Prior to the amendment, only cities could host the Games, with the odd event being held in another location. Now, while cities are the hosts “in principle”, the IOC had made it so: “where deemed appropriate, the IOC may elect several cities, or other entities, such as regions, states or countries, as host of the Olympic Games.”

The change to rule 33.2 risks undoing the public host selection process. The prior process included bids (generally publicly available), evaluation committee reports, and other mechanisms to make the bidding process transparent. Now, it is entirely possible that the IOC may pre-select a host, and present just that host to the IOC for an up-or-down vote. This vote may be seven years out from the Games, ten years out, or two years out.

Why the Changes? 

To hear IOC President Thomas Bach put it, these changes were necessary to prevent “too many losers”. Bach voiced this concern in December 2016, and again in May 2019. The essence of Bach’s concern seems to be that a city will put time and effort into a bid, only for it to not be selected by the IOC.

However, the harm caused by losing a bid is unclear. Is the fear that a losing city’s bid will be a one-and-done affair? To be fair, most are. The cities that bid multiple times before winning, such as PyeongChang (2010, 2014, 2018), and Paris (2012, 2024), are rare. But it is difficult to see how the changes will affect this.

Losing an Olympic bid certainly does not make a city a “loser”. While feelings may be hurt in the short run, cities keep on running. Toronto has lost five bids to host the Olympics, with the most recent loss in 2001 for the 2008 Games. But no one seriously thinks of Toronto as a “loser” city – particularly after the Raptors’ NBA championship victory. Legacies can still be created from losing bids. Developing a bid allows the city to re-imagine itself, and market itself to the world. It might even be in a city’s best interest to bid for the Olympics, but not win, to get the benefits without having to invest the billions of dollars to host the Games.

The IOC may be changing the process to eliminate this “winner’s curse”. Currently, bidding cities try to out-promise each other, driving up complexity and costs. Under the new system, the IOC could work more closely with a potential city or region from the outset, organizing and delivering an Olympics that truly fits. The IOC has stated that it would work less like franchisors, and more like partners with future Games hosts, and has formalised this approach in their “New Norm” modifications to Olympic Games delivery.

Finally, the IOC may be hoping that this new approach will encourage cities that might see themselves as “long-shots” to come forward and host the Games. But the last “long-shot” selected as host of the Olympic Games, Rio de Janeiro, was plagued with allegations of corruption, displacement of vulnerable people from the favelas, and poor legacy outcomes.

Back to Salt Lake City? 

This new process, with the IOC possibly presenting only one possible city to the IOC Session for an up-and-down vote has the possibility to undermine transparency in the host selection process. If the IOC is unwilling to announce possible candidates until a deal is already done, the promises made by a city or region may not even be known by its own public until the IOC Session votes on it.

Robert Livingstone, who runs the website GamesBids.com, worries that these changes will lead to “a devolution back to the 1980s and 1990s when a translucent bid process eventually led to the Salt Lake City bribery scandal.” I share that same fear. With Salt Lake City looking to host the 2030 Games, history is rhyming a little to closely.

Even if the return to lavish visits, gift-giving, influence-buying, and outright corruption don’t come to pass, this is a reversal of the general direction since the IOC published Agenda 2020 in 2014. Agenda 2020 called for more transparency, such as publishing Host City Contracts. To their credit, the IOC has followed through on many of the Agenda 2020 reforms.

A reduction in transparency will likely lead to less public participation. And that may be the IOC’s goal. The IOC is sensitive to referendums. The general public is more critical of the Games than it was in the past. In recent years, hosting the Games has been subject to more referendums than ever, with almost all of those referendums saying ‘no’ to the Games.

IOC Member Dick Pound stated that he has “no hesitation in allowing a [future host] commission to have discussions that are out of the public eye that perhaps occur with sports authorities or interested groups even before the governments had been engaged in this, and can be done on a very confidential basis.” This type of process, without even government knowledge, effectively undercuts public consultation and participation in any bid process.

This new bid process has not happened, yet. It is possible that IOC’s approach will continue to be ever-more transparent, and to allow for public input into the bid process. Naturally, until the IOC shares more of its thoughts about the process, and until we see a host selection process in action, which may be years away (under the old process, the selection process for the 2030 Games would take place between 2021–2023), any commentary about the process is admittedly speculative.

Is the IOC Afraid of Losing?

The IOC is facing a crisis of legitimacy. This crisis is no more apparent than when no city seems to want to host the Olympic Games. Of course, there are many reasons that cities are wary of the Games. High costs, poor legacies, perceptions of corruption, and other problems regularly plague the Games.

The IOC’s Agenda 2020 reforms were positive steps forward in addressing some of these issues. Instead, the IOC has seemingly decided that it would rather take the process out of the public eye under the guide of the cities being afraid of being “losers”. But it seems that the IOC is the one afraid of “losing”. Afraid of hearing that “Nobody Wants to Host the Olympics Anymore”. Afraid of the Games coming out on the losing end of referendums. Afraid of having to choose between a bad and worse option to host the Games. The only loser here might be the Olympic Games.

Yesterday, UEFA published the very much-expected settlements implementing its Financial Fair Play (FFP) regulations. Today, we address tomorrow’s challenges for FFP, we offer five, more or less realistic, scenarios sketching the (legal) future of the FFP regulations.

Scenario 1 : Happily ever after

We enter the brave new world of FFP. The settlements are not contested and Dupont’s EU law crusade sinks into oblivion. Meanwhile, the Qatari owners of PSG come up with a new marketing concept, the club recruits four locally trained players and wins the Champions league fielding the same starting team 14 times.[1] Thanks to FFP, in 2015, nobody is losing money anymore[2], Cristiano Ronaldo’s transfer to PSG for EUR 30 Mio. is by far the most expensive one and Arsenal’s coach Wenger feels rich for the first time in his career. No new FFP violation is registered, except for Shakhtar Donetsk, which messed up its financial accounts due to the move back to the rubble.

Scenario 2: Here we go again

FFP ends here for 2014, but history repeats itself in 2015. Clubs are still losing money and appear to fail to comply with the agreed settlements.[3] However, Manchester City and PSG have recourse to new innovative marketing contracts to turn their losses into profits.[4] To this end, the PSG squad members are named official ambassadors of the State of Qatar and their wages are covered by the Qatari state. The nightmare continues for Platini, who is stuck between a rock and a hard place. On one side he counts on Qatar’s vote and influence to win the FIFA presidency in June 2015, on the other he needs to defend his credibility in the eye of the German austerity hawks. The procedure is delayed until July, at which point the cases are referred to the adjudicatory chamber.[5] Both clubs are found in breach again, the chamber imposes a EUR 100 Mio. fine and Champions League squads are reduced to 18 players.[6]

Scenario 3: Settlements are not enough

Wenger is outraged! Fining PSG and Manchester City is a bit like fining a central bank: they’ll just print more money. 2014 was supposed to be the year his side would eventually get to play the Champions League without having to go through the preliminary rounds. Thus, Arsenal, backed by Everton, decides, on the 25 May 2014, to contest the settlements in front of the Adjudicatory Chamber.[7] Olympique de Marseille, always keen on fighting PSG on any turf, also appeals the settlement. However, in a final decision, the Adjudicatory Chamber dismisses the complaints. Far from abandoning their quest for justice, the clubs decide to refer the decision to CAS[8], where Everton, Arsenal and Marseille obtain a re-devaluation of the controversial sponsoring agreements. CAS hands out a two-year ban on transfers for both clubs, but comes short of kicking them out of the Champions League.[9] As usual, the final appeal to the Swiss Federal Tribunals is a waste of time: Arsenal will have to go through the preliminary round...again.

Scenario 4: My name is Dupont, Jean-Louis Dupont

All the parties agree with the settlements proposed, FFP seems to be heading for a smooth run. All, but one. Belgian lawyer Jean-Louis Dupont, secretly backed by wealthy clubs, challenged FFP in front of the Belgian Courts and the European Commission. He claims, loud and clear, that FFP is a restriction of EU Free Movement and Competition Law. In 2018, after 4 years of protracted litigation, the Court of appeal of Bruxelles finally decides to refer the matter to the Court of Justice of the EU in Luxembourg.[10] Meanwhile, the European Commission has also been enquiring on a putative infringement of EU competition law, but the new Commissioner for Competition Law, former French minister Pierre Moscovici, freezes the final decision after a phone call with Platini. On the 15 December 2020, the Court, in its instantly famous Striani judgement[11], considers FFP a clear restriction on EU free movement and competition law. In spite of the specificity of sport, its proportionality cannot be warranted. However, the judgement has no retroactive effect and both the Court and Advocate General considered that a better system could have been worked out. As soon as the ruling is known, UEFA enters in résistance: Platini calls up Sarkozy (by then old-new President of France), who, in a moment of rage, decides to leave the EU.

Scenario 5: The Reality Check

The FFP settlements will stand as they are; it is rather unlikely, though possible, that any affected party will raise an objection against them. PSG and Manchester City will not recruit any big players unless they sell big, but will most likely focus on getting decent locally-trained players on-board for the Champions League bench. The 2015 FFP edition will probably feature a replay of the current edition. We do not see, at least for PSG, any chance that it could accrue its revenues (except very creatively), in order to meet the target of a maximum EUR 30 Mio deficit. The main conundrum for the 2015 FFP process will be to design credible sanctions for a recidivist. On the EU law front, the process will take a lot of time. Regarding the Belgium Courts, any first instance decision will be appealed all the way to the highest Court and will undoubtedly end up in a very time-consuming procedural ping-pong with the Court of Justice of the EU (earliest final decision not before 2019-2020). The EU competition law complaint launched with the European Commission might be quicker to unfold, but will most likely be a forum for re-negotiating the FFP rules rather than to abolish them altogether (the transfer system overhaul at the turn of the century could serve as a model). On a final note, Wenger is surely disappointed by the apparent leniency of the sanctions, but for once he might be able to throw a bit of his weight around on the transfer market.

[1] The settlement for PSG and Manchester City include specific restrictions of the squads size for the Champions League: “[the club] accepts that for the duration of the settlement it will be subject to a limitation on the number of players that it may include on the “A” list for the purposes of participation in UEFA competitions. Specifically, for season 2014/15 PSG may only register a potential maximum of 21 players on the “A” list, instead of the potential maximum of 25 as foreseen in the relevant competition regulations.” Furthermore, pursuant to Article 18.08 of the Regulations of the UEFA Champions League: “As a minimum, eight places are reserved exclusively for “locally trained players” and no club may have more than four “association-trained players” listed on these eight places on List A.”

[2] The goals of the UEFA Club Licensing and FFP Regulations are stated at article 2.2. They affirm that FFP aims “to introduce more discipline and rationality in club football finances” and “to encourage clubs to operate on the basis of their own revenues”.

[3] The settlements read as follows: “In case [the Club] fails to comply with any of the terms of this Agreement, the  UEFA CFCB Chief Investigator shall refer the case to the Adjudicatory Chamber, as  foreseen in Art. 15 (4) of the Procedural Rules.”

[4] The reason why both clubs failed to adhere to the FFP rules is that their sponsorship contracts with related parties were deemed overvalued and therefore adjusted as required by Article 58.4 of the UEFA FFP Regulations.

[5]Article 15.4 of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014, states that: “If a defendant fails to comply with the terms of a settlement agreement, the CFCB chief investigator shall refer the case to the adjudicatory chamber.”

[6] Article 29 of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014 foresees that:

The following disciplinary measures may be imposed against any defendant other than an individual:

a) warning,

b) reprimand,

c) fine,

d) deduction of points,

e) withholding of revenues from a UEFA competition,

f) prohibition on registering new players in UEFA competitions,

g) restriction on the number of players that a club may register for participation in UEFA competitions, including a financial limit on the overall aggregate cost of the employee benefits expenses of players registered on the A-list for the purposes of UEFA club competitions,

h) disqualification from competitions in progress and/or exclusion from future competitions,

i) withdrawal of a title or award.

[7] Indeed, directly affected party (as Everton, Arsenal and Marseille in those case) can ask the adjudicatory chamber to review the settlements. Article 16.2. of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014 foresees that: “Any decision of the CFCB chief investigator to conclude a settlement agreement or to apply disciplinary measures within the meaning of Article 14(1)(c) may be reviewed by the adjudicatory chamber at the request of a directly affected party within ten days from the date of publication of the decision.”

[8] Article 34 of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014 confers to directly affected party a right to appeal final decisions to CAS.

[9] Supra, No 6

[10] Article 267 of the Treaty on the Functioning of the EU gives to national courts the possibility to refer a question concerning the interpretation of EU law to the Court of Justice of the EU.

[11] Daniel Striani is a player agent on who’s behalf the complaints by Dupont against FFP were launched.