BBC BLOGS - David Bond
« Previous | Main | Next »

London 2012 cash row intensifies

Post categories:

David Bond | 16:11 UK time, Friday, 25 March 2011

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

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Andy Hunt have now been excluded from the board of LOCOG until the Court of Arbitration (CAS) case is ruled on or withdrawn.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.


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.


  • Comment number 1.

    Yet another example of why we should never have got these games ,a collapsable stadium ,needing a 90m baleout a BOA that is hoping for a mega payday cos with governmentfunds drying up their sports have little mass appeal. So poor ol johnny taxpayer will pick up the bill if its a loss and BOA get the profits Just hope this junket isnt still being baled out for years to come

  • Comment number 2.

    The BOA should be very grateful for 20 million in the first place. How is this 400 million profit from the games coming about when you take into account that something like 9 billion of tax payers money has gone into the hosting the event? Surely any profit should be given back to the government, maybe to be spent on hospitals, roads etc...

    Sports is great, but the Olympics will be its pinnacle. We need to turn our attention to more practical matters afterwards.

  • Comment number 3.

    The profit from the olympic games should be given solely to Lord Coe and David Beckham for their tremendous efforts in bringing the games to Britain. Fantastic effort lads and they are without doubt the most deserving of us all, national treasures.

  • Comment number 4.

    The more I think about it, the more it annoys me. Any Olympic profits given to the BOA post game is affectively the taxpayer bailing out an organisation that is in financial trouble (remind anybody of the banks?) We have paid 9 billion for the games and as tax payers should get any profit given back to fund our badly hit public services.

  • Comment number 5.

    Before they even think about any profits, they should pay back the public funding given against the will of the vast majority of those whom were forced to pay for it.

    With interest.

  • Comment number 6.

    Well Well Well... and all your deluded supporters thought the Olympic bid was about bringing the sport to England!!! ...It was always about the money, money for a bunch of over-rated individuals who have done nothing for society other than cover themselves in self-glory. And for what? ...soldiers put they lives on the line while some guy can ride a bike fast or run fast? wow, what an honour.. NOT!!!

  • Comment number 7.

    'And for what? ...soldiers put they lives on the line while some guy can ride a bike fast or run fast? wow, what an honour.. NOT!!!'

    You could also argue that we have spent far to much money on war.

    Anyway regardless, some of those soldiers who put their lives on the line... you know what they are the guys and girls who are riding a bike or running fast for the British paralympic team... and you know something else, a number of the able-bodied olympians were (or in some cases still are) members of the British army. Kelly Holmes for example was a sargeant.

  • Comment number 8.

    I can't believe this is not getting more press than it is. This is greed wasting public money by suing to get public money when the public is facing tax increases to fund a massive deficit and debt. The 2012 olympic committee got themselves a safe construction budget to save themselves the embarrassment of having to justify to the public why they could not build to a budget. Now when they were looking come in under budget some greedy bunch on ingrates is attempting to take that money for their own agenda.


  • Comment number 9.

    Are the BOA prepared to cough up the dough if the games come in at a loss? No? then they should stick to the LEGAl agreement that they willingly signed up to.

    And it hardly demonstrates any sort of 'inclusivity' with paralympic sport when the BOA basically says 'we don't care about your games because they will run at a loss'

    Is there a supply of revolvers and Whisky at BOA HQ for Lord Moynihan to use next week?

  • Comment number 10.

    7. At 20:15pm on 25th Mar 2011, U14628062 wrote:

    Anyway regardless, some of those soldiers who put their lives on the line... you know what they are the guys and girls who are riding a bike or running fast for the British paralympic team... and you know something else, a number of the able-bodied olympians were (or in some cases still are) members of the British army. Kelly Holmes for example was a sargeant.

    I didn't know that, and I humbly step down off my soap box and apologise.

  • Comment number 11.

    It is worth remembering that the cost of staging the Games has no bearing on this argument. That cost was taken on by Government after the bid was won in Singapore. There have already been infrastructure benefits to East London and some of the £9bn + cost of staging the games will be recouped when the Stadium, media center, athletes village etc are sold off after the event.

    This is about the profit (hopefully) from the staging of the sporting extravaganza next July. For its part, the BOA has given up its marketing rights to the Olympic rings - and this has, over history, been its primary source of income. Everyone should remember that this organisation receives no public funding for delivering us the team of athletes that excelled in Beijing and will no doubt do the same in London.

    That said, the sight of our sporting elite throwing pies at eachother is an unedifying sight and an embarrasment to this country. I'm afraid the BOA have set themselves up as the Millwall of elite sport. As that club's supporters used to (and probably still do) sing, 'everyone hates us, but we don't care'.

    I fear that Lord Moynihan's dictatorial leadership will do irrepairable damage to an organisation that has served British sport well for over 100 years. Will the National Olympic Committee (mambers of our 33 Olympic Sport) have the bottle to stand up to their Chairman and say that the time has come to accept that this is not the way to do business? If recent history is anything to go by, the answer is no.

    If that is the case, where does that leave us? My guess is, that in the aftermath of a hugely successful Games, we'll see the BOA perilously close to financial ruin and funding available to our fantastic Olympic athletes cut off dramatically as the Government cuts bite even deeper.

    The last chance saloon is really upon us!

  • Comment number 12.

    'funding available to our fantastic Olympic athletes cut off dramatically'

    Really? Even when you consider that a lot of that funding comes from the lottery and not directly from the government?

  • Comment number 13.

    U14628062 - true, but a significant sum of UK Sport's funding is Exchequer grant. I'm also a cynical soul and can't believe that the Government won't eye up Lottery funding for a range of other uses once the Games is over and the dogfight for Government money hots up.

    Perhaps you assume that the National Lottery will maintain its current impressive turnover post Games - I hope you're right.

  • Comment number 14.

    The public has already been bled dry paying for these games, and we'll see very little of that money back.
    The whole Olympic Games / World Cup shtick is that they are a highly effective way of siphoning money out of the taxpayers' pocket, and into the pockets of wealthy biusinessmen, construction firms, and other vested interests.
    Sad but true.

  • Comment number 15.

    Very unsavoury business, and sadly a return to the dark pre-Lottery days, when every sport, quango and funding body would sell it's own soul/grandmother (delete as applicable) to secure its own funding streams. I hope this is not a sign of things to come in the post-2012 era.

    Something is very clearly not right. Firstly, the resignation (ousting?) of BPA chief exec Phil Lane a few weeks back, then, as other posters have pointed out, the rather unpleasant inference that the Paralympics are more than likely going to be a drain which should be avoided like the plague - not the kind of attitude I'd like to see.

    Once again, this is all about fiefdoms and territorialism. The BOA is quite right that it will still be standing post 2012 (subject to not running itself into the ground with hundreds of ill-conceived schemes, shiny new offices, and cross-over initiatives which step across the boundaries of their remit). Admittedly, LOCOG is effectively just the host of the party, but there will be others still standing - all the NGBs, the BPA, UK Sport - where does the money come from ultimately??

    Re: the memo/letter. What a load of pompous rhetorical nonsense. While I do not dispute the sentiment - what on earth does it have to do with an organisation which has the remit of picking, preparing and sending elite performance teams to the Olympic Games?

  • Comment number 16.

    Colin Moynihan is completely lacking in judgement. His political ambitions went belly up in the 80s over his daft ID scheme for football fans which never got off the ground.

    His political ambitions are almost certainly going the same way over this dispute & the BOA spending money they can ill afford on doing roles that UK Sport have been doing well since lottery funding was introduced in the late 90s.

    Let's hope Moynihan & his ally Hunt lose their jobs over the next few months - Sir Clive Woodward can also go off & take the new role of performance director at the RFU, a role for which he is eminently qualified & worl alongside Martin Johnson again. The BOA can then get back to what it's done well for over 100 years before Moynihan & his large ego walked through the door.

  • Comment number 17.

    To me, it seems like the BOA negotiated a bad deal at the beginning, signed on the dotted line and are now trying to go back on it. Or the otherside strong armed the BOA into taking a deal quickly and the BOA failed to do the maths.

    Either way, it isn't great for sport in the UK ...

  • Comment number 18.

    The fact is that the salaries and expenses of BOA staff has doubled in less than 2years to an astonishing £4.2 million pounds. They have given themselves vastly inflated pay increases and they simply have not got enough money to fund the programmes that they are obliged to. It is a culture of greed and incompetence that is being exposed here and it is Hunt and Moynihan who are culpable. I wonder what their salaries were increased by ?

  • Comment number 19.

    According to the BOA, its purpose is to "....... prepare and lead our nation’s finest athletes at the ....Olympic Games. Working with the National Governing Bodies, the BOA selects Team GB from the best sportsmen and women who will go on to compete in the 26 summer and 7 winter Olympic sports at the greatest sporting competition in the world."

    So.... do they REALLY pick the teams? Does the BOA pick the rowing team and not Jurgen Grobler? Do they get involved with picking the track cycling team, even when the cycling set-up is well stocked with coaches, managers etc etc?

    I don't think so. I'm sure UK Athletics know how to pick a team, as does each individual sports body.

    All they appear to do (of any real benefit) is lay on 'holding camps'.

    It all seems rather self serving to me. Yes, we DO need a collective body to co-ordinate multi-sport events..... but it does really require the millions that the BOA are after?

  • Comment number 20.

    I see from this

    That the BOA (well Moynihan) are 'eager to resolve Olympic Row'.

    So that would be an unnecessary and costly row that he instigated.

    Very generous of him!

    Surely if he belives that the BOA have been hard done his argument is with the previous BOA chiefs and their legal / financial advisers who signed the original agreement with LOCOG in the first place.

  • Comment number 21.

    In the end, it's all about cash ! The more cash generated, the more to argue about. It's a Great British Trait, it's what we do.
    If there was an Olympic Medal for Whingeing, GB would get Gold, Silver, and Bronze.
    Don't mention the word LEGACY. It's thrown around like a dust devil, and just like a dust devil, gone in an instant, nowhere to be found.
    The 2012 London Olympic Games are just a board game for the organisers. A toy to be put back in the toy cupboard, when the novelty wears off.


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.