London 2012 cash row intensifies
No one is likely to remember the increasingly acrimonious financial dispute between the British Olympic Association (BOA) and the London 2012 organising committee (LOCOG) by the time the Games are under way next summer.
The row over the surplus from the Games has no bearing on the funding of the British Olympic team. It will not effect the sale of tickets, the route of the torch relay or the planned opening of the aquatics centre.
But there is potential for this stand-off to do serious damage to the BOA and Olympic sport in the years after the Games. More presciently it is chipping away at London's hard earned image as a slick and united host city.
Next week the International Olympic Committee arrive for the first co-ordination commission visit of 2011. The following week the International Olympic Committee (IOC) president Jacques Rogge and his executive board will meet in London.
If the issue isn't resolved in the next few days - and there's no sign of the BOA or LOCOG backing down - there's only going to be one story in town.
Lord Moynihan and Andy Hunt were excluded from London 2012 board meetings on Thursday. Photo: AP
As BBC Sport reported last night, the BOA chairman Lord Moynihan and chief executive Andy Hunt have now been excluded from the board of LOCOG until the Court of Arbitration (CAS) case is ruled on or withdrawn.
Although they remain as directors of LOCOG, lawyers advised there was now a conflict of interest which required their temporary suspension. How on earth could chairman Lord Coe and his board have discussed the BOA case sitting around the same table as the two men who called in the lawyers?
I'm told there was also a discussion in Government circles on the question of whether Lord Moynihan and the BOA should be suspended from the most important Olympic decision making body, the Olympic board, which also includes Lord Coe, Sports Minister Hugh Robertson and London Mayor Boris Johnson. But in the end it was decided that since the dispute was unlikely to come up, there was no need to bar the BOA.
Nevertheless their removal from the LOCOG board is a dramatic step and although other senior BOA figures such as Sir Craig Reedie remain, it is a sign of just how serious this row is.
So where does it go from here?
Next Tuesday the 33 sports governing bodies which make up the National Olympic Committee convene at the BOA's London HQ for a crucial meeting.
So far only a small number of sports appear to be alive to the potential damage this row is doing. As my colleague James Pearce reported earlier this week some sports are prepared to call for a no confidence vote in Lord Moynihan if the CAS case goes against the BOA.
The majority, however, seem to be sleep walking into a conflict which threatens to only cause them harm in the long run.
At the centre of this row is whether any London 2012 surplus should factor in the costs (or surplus) of the Paralympic Games. LOCOG, already backed with a ruling from the IOC, says it does. The BOA says it doesn't.
Lord Moynihan assumes the surplus will be eroded by the costs of the Paralympics but as the head of the International Paralympic Committee pointed out yesterday, the event could even make money.
And in any case LOCOG have repeatedly said they are aiming for a balanced budget. Most people I speak to can't understand why the BOA is prepared to go to such extraordinary lengths to claim a bigger share of a surplus which may simply never materialise.
If one thinks this through to its conclusion, CAS either backs LOCOG and the IOC's stance, meaning Moynihan and Hunt will face questions over their judgment as well as their financial management of the BOA.
Or if CAS rules in favour of the BOA, LOCOG will simply go to the Government to ask for money to settle with the BOA. The Treasury are almost certain to refuse, leaving ministers with little option but to take the money from UK Sport or Sport England. All of which means, in essence, that the Olympic sports - the bodies currently backing the legal action - could end up paying the bill anyway.
Perhaps this is what Lord Moynihan has in mind when he talks about protecting the future of Olympic sport in the years after the Games. He clearly feels that in taking such extreme action he is only acting in the interests of those sports.
But this is where ultimately the power lies in this dispute - not with Lord Moynihan, Hunt or even Lord Coe. Only the 33 sports which make up the BOA can now act to stop this bizarre squabble over a hypothetical pot of money.
UPDATE - 1700 GMT
I have just been leaked a copy of a statement by Lord Moynihan, sent to all 33 Olympic sports earlier this week. Over four and a bit pages of stirring prose it sets out clearly the BOA's case.
In short his argument is as follows:
- Locog will not exist after the 2012 Games, but the BOA and Olympic sport will. Therefore any money made from the Games shouldn't go into running the Paralympics but in ensuring the BOA is in good shape to deliver a lasting sporting legacy. He writes: "The BOA, not Locog, is the guardian of that legacy and we would be found sorely lacking if we did otherwise."
- At a meeting on 19 July 2010 at the BOA, Locog's finance director "took the view that, accounted for on an attribution basis, the Olympic Games could show a profit of up to £400 million". The BOA would then be entitled to £20m of that as per the host city contract with the IOC. (No one I have spoken to outside the BOA recognises this projection).
- At a time when sport is facing spending cuts, this money would be vital for securing an Olympic sports legacy, delivered by the BOA. Lord Moynihan adds: "The BOA entered into the JMPA (joint marketing agreement) and the HCC (host city contract) on the proviso that the BOA, the governing bodies and sport in the UK would be provided a significant legacy investment upon hosting a successful Olympic Games in 2012. If we do not fight on behalf of that understanding then we will have seriously failed our athletes of the future."
To illustrate the depth of feelings involved here, I quote the last chunk of Lord Moynihan's statement in full:
"The furore of recent days and the spurious headlines trumpeting division and dissent will pass, but there remains a real and pressing issue at stake: the provision of a genuine, far-reaching and enriching sports legacy for this country, one which fundamentally transforms the expectations, the aspirations and the very lifestyles of a generation of children and adults alike.
"This is a defining moment in time for sport in the UK. It is our chance to ensure that future generations will benefit from revolutionary access to sport and recreation, as a direct result of the legacy funding arising from the London Games.
"In years to come, I want all those involved in the delivery of London 2012 to be able to look back with pride and quiet satisfaction to this as the pivotal moment when it all began. The words of leading British Swimming and Canoeing coaches resonated strongly with me earlier this week.
"On hearing of the challenges faced by the BOA, they said, 'This is our moment. This is your time. Grasp it with both hands. We must seize the opportunity. It will."
Put another way, this is the chance to secure a bigger income and role for the BOA than at any time in its 105-year history.