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RUBY:

From Schwartz Media, I'm Ruby Jones, this is 7am.

Hosting the Olympics is an honour that cities have competed for over a century. It’s seen as recognition of a nation’s economic superiority, and a source of national pride.

But, is winning the bid to host the Games really worth it?

As some cities are finding - dealing with the International Olympic Committee can leave them financially and legally devastated.

Today, national correspondent for The Saturday Paper Mike Seccombe on the power of the IOC, and it’s vice president, John Coates.

It’s Tuesday, August 3.

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Archival tape -- IOC

"That the games of the 35th Olympiad, I award it to Brisbane, Australia"

Archival tape -- Scott Morrison

"It’s very exciting news for Australians. So everybody up there in Queensland it’s a win for all Queenslanders, it's a win for all SE Queenslanders and it's a great win for all Australians..."

RUBY:

Mike Brisbane has won the right to host the 2032 Olympics, but when that announcement was made last week, it was kind of overshadowed by some other things that the head of the Olympic Committee said. So can you describe what happened?

MIKE:

Yes, that's right. There was this exchange between John Coates, who's the president of the Australian Olympic Committee, and Annastacia Palaszczuk, who's the premier of Queensland.

Archival tape -- John Coates

You are going to the opening ceremony. I'm still the deputy chair of the candidature leadership group..

MIKE:

And what happened was Coates very forcefully insisted that Palaszczuk was going to attend the opening ceremony in Tokyo.

Archival tape -- John Coates

"And so far as I understand there will be an opening and closing ceremony, in 2032 and all of you are going to get along there and understand the traditional parts of that - what’s involved in an opening ceremony - so none of you are staying behind and hiding in your rooms, alright?"

MIKE:

And that there was no way in the world that Palaszczuk was going to, as he put it, hide in her room because she had suggested that she might watch the opening ceremony on television. Given the pandemic.

And the exchange was well, was arrogant, to say the least.

Archival tape -- John Coates

"You ever been to an Olympics games opening ceremony have you? You don't know the protocols. Very important lesson for everyone here."

MIKE:

And this is an arrogance that that's borne of power, the power which the Australian Olympic Committee and International Olympic Committee has, and of course, of which John Coates also has a large measure.

RUBY:

Mm okay, so tell me a bit more about that, about John Coates. Who is he and what sort of power does he have?

MIKE:

Well, Coates was born in Sydney 71 years ago. His father was a lawyer and Coates became one, too. He was always keen on sport from a young age, but he was born with congenitally dislocated hips, which prevented him from becoming a serious competitor. So he became an administrator instead. And he's become very good at it, I might say.

He was the president of the AOC, the Australian Olympic Committee, for 31 years, for three decades, which is an extraordinary run when you think about it. And vice president of the International Olympic Committee, which is the body that governs the Olympics and decides where they're held. He's been on that body for nearly a decade.

So to understand his power, I guess it's it's worth going back and having a look at what happened the last time Australia held the games back in 2000.

Archival tape -- IOC

"The winner is Sydney Australia."

Archival tape -- Bruce Mcavaney

"What a great moment. Money extremely well spent."

Archival tape -- Commentator

"The official contract will be signed by the IOC… what they have to do now is sign the contract basically a billion dollars for the year 2000.. so much to look forward to."

RUBY:

Okay, what happened?

MIKE:

Well, he developed a reputation as a fearsome negotiator

Archival tape -- 7.30 Report

"John Coates has turned Sydney 2000 into a gold mine for the AOC and himself into the key power broker of the games."

MIKE:

You know, he squeezed everything he could out of the New South Wales government and out of the city of Sydney

Archival tape -- John Coates

"Australia's own Lord of the Rings and master Olympic deal maker has found himself centre stage fighting accusations that he bought the Games, but the real battle over the Sydney Olympics has been a ruthless power struggle behind the scenes."

MIKE:

And made sure, of course, that they were on the hook if anything went wrong.

Archival tape -- John Coates

"In 1993, John Coates talked $135 million out of the Keating government for a programme aimed at ensuring a record gold medal tally in 2000..."

MIKE:

I spoke to Bob Carr about this, who was premier through much of the run up to the Sydney Games. And and he compared Coates to the national secretary of a large union who he says, you know, maintains his control by very astute patronage, by keeping the sporting organisations who are his constituency in line, by sharing with them the spoils. And I spoke also to Carr's treasurer at the time, Michael Egan, who had a number of run-ins with the AOC and with Coates at that time.

Archival tape -- Michael Egan

John Coates actually sued me for defamation you might remember I kicked up a big fuss over the bed tax.

MIKE:

One, for example, was over a 10 per cent bed tax that the state imposed on Sydney hotel accommodation to try and claw back a bit of the costs of the games. And the AOC was very unhappy about that. And at one stage at a media conference, Egan suggested that Coates had a conflict of interest in his opposition because in the past he'd had involvement in a hotel development anyway.

Archival tape -- Michael Egan

"I had a press conference. I casually mentioned that I thought John Coates had a conflict of interest because I remember as a young backbench member of the lower house he came to see me about a proposal about hotel accommodation in the peninsula."

MIKE:

And even more acrimonious, though, the most acrimonious bit of the lot, I suppose, was a dispute over the structure of the Olympic Organising Committee, which Egan describes as a 50/50 joint venture between the Olympics organisation and the state. That gave Coates essentially a veto power over line items in the budget.

And he told me that they got to the stage where the AOC quote wouldn't let the government do anything, unquote, so they had to buy them out. That wound up costing the state close to 100 million dollars.

Archival tape -- Michael Egan

"And that taught me that you never go into a joint venture with anyone because they can stop you doing anything. We got stage AOC government to do anything, what’s going to happen here, we got an Olympics happening. So we had to buy them out. I think it was $100."

MIKE:

And Egan told me that it taught him two things. One, that you never go into a joint venture with anyone. And two, that John Coates was a very tough negotiator.

RUBY:

OK, so John Coates, a tough negotiator, a good operator, you don't really want to be up against him in these kinds of discussions, but his power is really underpinned by the weight of the institutions that he works for, the Australian Olympic Committee and the, the International Olympic Committee. So can you tell me a bit more about them and the sway that they have?

MIKE:

The IOC is an independent international non-government organisation. It has no obligation essentially to listen to anyone other than themselves. One one expert I spoke to said they make their own rules and they govern their own rules.

So by dint of the self-determined rules. Laid down in contract law backed by immense commercial power. They're in a position to bully any host city and they do

The way they do this is through ironclad contracts that favour the IOC over the host city, which leaves the hosts liable to the costs if things run over budget or otherwise go wrong and lock up for the IOC, the benefits from things like broadcasting rights, merchandising, intellectual property, you know, in a nutshell, they ensure that the IOC owns the games, but the hosts pay for them.

RUBY:

We’ll be back after this.

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RUBY:

Mike, it sounds like the IOC has pretty much total control over the organisation of the Olympics. What does that mean then, if a host city wants to get out of it for whatever reason, maybe extenuating circumstances, for example… a global pandemic?

MIKE:

Yeah, that's right. Or a financial crisis or, you know, what have you and the host city contract with Sydney actually stipulated who could and could not cancel the games, and it did not allow either the city or the National Organising Committee to cancel the games for any reason at all. But it did give that power to the IOC.

Archival tape -- News report

"Vice President John Coates confirming the opening ceremony on July 23 will proceed even if Tokyo is under a state of emergency."

MIKE:

And, of course, that's exactly the case in Tokyo.

You know, even though a large majority of the Japanese public did not want the games to go ahead, Tokyo couldn't cancel without being liable for billions of dollars.

Archival tape -- John Coates

"All of the plans that we have in place to protect the safety and security of the athletes and the people of Japan are based around the worst possible circumstances."

MIKE:

It's very tightly stitched up in favour of the IOC. And and furthermore, had Japan cancelled, the IOC could have gone them for damages and kept it all off. If there's a dispute about the contract, any dispute at all, including about damages, it's not resolved in an independent court in the host nation.

RUBY:

It's not? So where is it resolved? Where does it go?

MIKE:

Well, it goes to Switzerland. It goes to Lausanne in Switzerland, where something has been set up called the Court for Arbitration of Sports. And that's essentially an offshoot of the IOC. And guess who's president of the court? None other than John Coates.

Coates, I might add, also has a couple of roles in relation to the Tokyo Olympics. So so it's an interesting thought. If the Japanese Olympics had been abandoned, we have Coates, who has official functions both with the Japanese organisation and also an adjudicatory role through the the arbitration body in in Switzerland.

He is, in a sense, to use a sporting metaphor in in both the role of player and umpire. You know, they determine the rules. And then if there's a dispute about the rules, they adjudicate the dispute as well.

RUBY:

Right. OK, and so, Mike, why do countries keep putting themselves up for this then? Why does a city like Brisbane even want to host the Olympic Games? Because it seems like it's extremely risky.

MIKE:

Well I mean there's a lot of cachet and I can see why people might think it, you know, might lift international global perceptions of the city. But at what cost?

You know, the cost benefit analysis of hosting the Olympics is mixed at best. There was a really good study conducted by some people at Oxford University at the end of last year, which found that the average sports related costs, that's just the sports.

The other costs of the Summer Olympics between 1960 and 2016 was more than $8 billion dollars in Australian dollar terms, and that expense had rapidly escalated over recent games. You know, the 2016 Rio Olympics, for example, cost more than 18 billion dollars. London in 2012 was 27 billion. And of course, Tokyo is going to be even more than that.

And these cost overruns, coupled with the fact that the host countries often bid for the games during good economic times, but wound up delivering them in much worse times, have done just immense social and economic damage to some of the host nations.

Of course, not all games go badly. But, you know, even in the case of those deemed successful like Sydney, it's very hard to determine exactly what benefit is accrued to the host. I mean, how do you value things like national pride or, you know, the potentially changed perceptions of the host city in the eyes of the world or the long term consequences for tourism? There's all these other esoteric benefits that you have to take into account.

These things have fooled governments in the past. But I think governments around the world are coming increasingly to the realisation that hosting the games is is a very, very expensive and risky business.

So, look, I enjoy sport as much as the next person. And I've been compulsively watching the Olympics this week as I languish in lockdown here in Sydney. But I also remember George Orwell's famous description of the Olympics as a war by other means.

And in war, the only people who really benefit are the people who supply the weaponry. And I think in a way we can look at the Olympic committees is that, you know, they are the facilitators and they're making out like bandits off our nationalism.

RUBY:

Mike, thank you so much for your time.

MIKE:

No problem, thanks.

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RUBY:

Also in the news,

NSW recorded 207 new local coronavirus cases on Monday. Of those at least 72 were infectious while in the community. The state also recorded its 15th death due to the current outbreak.

The Queensland government has extended the lockdown in the south-east of the state until Sunday after the state recorded 13 new locally acquired Covid-19 cases on Monday.

Ten of Monday’s community cases are children younger than nine years of age. The community cases are linked to a growing cluster involving several Brisbane schools.

And Federal health minister Greg Hunt has announced that the Pfizer vaccine will be made available to children aged between 12 and 15 who are immuno-compromised starting from the 9th of August.

I’m Ruby Jones, this is 7am, see you tomorrow.

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