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  • The Wilberforce Society Cambridge

Restoring financial confidence in the Commonwealth Games

Cameron McIntyre | The Wilberforce Society | 11th February 2024

Edited by Jessica Alder


 

Victoria’s withdrawal from hosting the 2026 Commonwealth Games, citing cost concerns, is the continuation of a trend of financial uncertainty around the event. It comes after Durban withdrew from hosting in 2022 and would likely be followed by the cancellation of all standing bids for 2030, leaving the 100th-anniversary edition uncertain.


The Games have not been able to expand viewership sufficiently in line with rising costs over the past two decades, compromising its ability to cover costs. It has failed to present a financially attractive model for potential host cities that are unwilling to risk their political standing on the possibility of incurring significant public debts.

Reluctance to host the games risks their suspension or even outright cancellation and would pose a considerable blow to British soft power. The Games are one of the key tenets of the Commonwealth of Nations and offer the institution a public face. The Commonwealth provides a key diplomatic avenue for the UK to engage with emerging economic powers and the demise of the Games would be a concerning loss of confidence in the relevance of the Commonwealth and of the UK itself. It is not within the scope of this paper to consider Britain’s relative decline in global significance, nor the potential for systemic change within the Commonwealth itself, but rather to help replenish confidence in the institution’s greatest cultural asset.


This report will examine the present conditions of the Games and what is required to restore financial trust from local and national governments. It will start by evaluating the Commonwealth Games Federation (CGF)’s current models to support local governments and then consider what is required of hosts themselves to ensure the Games prove economically and politically justifiable. Finally, it will look at what role the UK national government can play in aiding in this process.


How has the CGF responded?


The Commonwealth Games Federation is the organisational body responsible for the Games’ commercial strategy and administration, working alongside the organising committee for each host. The CGF’s 2022-26 Strategic Roadmap sought to address the factors that brought down Durban 2022, though its proposed amendments have created additional ambiguities and uncertainties. These proposals primarily revolve around cutting red tape and placing greater organisational power in the hands of hosts.


Reforms allowing for increased flexibility in the management of caps on crowd and athlete numbers are a positive step in removing regulatory pressure on hosts to meet unsustainable standards. Athlete numbers were predicted to be around 7,000 for Victoria 2026, almost double those partaking in Manchester 2002.[1] Following concerns over the size of the 2022 Birmingham Games, then-CGF President Dame Louise Martin admitted that these numbers had become ‘very difficult to control’.[2]


The caps are necessary to reduce the costs of facilitating athletes and encourage more stringent athlete selection by national associations, naturally raising competitive quality.  Limits on crowd capacity serve a similar purpose and ultimately save more money than could be gained. Ticket income for Manchester in 2002 recovered only 5.8%[3] of total expenditure[4] and by Birmingham 2022 this had fallen slightly to 5.5%.[5] The cost of temporarily increasing capacity for Alexander Stadium, Birmingham’s main venue, accounted for 9.3% of total expenditure alone.[6]


Greater leniency has also been given to hosts in selecting which sports to include. This is to appeal to local tastes and ‘enhance cultural showcasing’ to international audiences.[7] Allowing hosts to remove events that are of little interest to locals is an obvious cost reduction. Birmingham’s decision to remove shooting prevented the construction of facilities for a sport that was neither locally popular nor a key headliner for the Games. Where this policy has its main drawback is in prioritising the demands of local audiences over international viewers. India threatened to boycott Birmingham as a result due to India’s past success in shooting and its popularity. The reformed policy of requiring athletics and aquatics as the only mandatory events is too limited and should take international preferences into greater account. This goes in hand with recognising the cultural diversity of the Commonwealth and ensuring no country feels sidelined in the decision-making process.


There are further issues to be found in the CGF’s enabling of ‘co-hosting proposals, across multiple cities, regions [and] countries’. While intended to reduce the financial and logistic burden of hosting on a single site, this approach has not set appropriate parameters for how widely the event may be spread. Victoria’s 2026 plan to host the Games across multiple regional towns was an excessive decentralisation of facilities and the CGF later recognised that ‘the multi-hub regional model was more expensive to host than traditional [single site] models’.[8] Clear limits on travel times between arenas and from athlete accommodation to events must be specified to curb overspreading. The decentralised approach does not offer the greater financial efficiency needed to warrant diverging from the traditional centralised model.


Certain reconsiderations must be made, but overall it remains clear that the CGF has taken a positive step with its approach towards deregulation. This does, however, shift the weight of responsibility closer towards local governments. The following section will discuss potential policies for these governments to ensure financial sustainability.

 

Creating local success


Lessons can be drawn from financially successful Games in the past and other mass sporting events, namely the Olympics, to provide an outline of considerations and recommendations for hosts. These points aim to extend the economic contributions of the Games beyond the event itself as part of a more broadly sustainable financial model.

 

1.     A minimum quota on the conversion of athlete accommodation into affordable housing.


The greatest opportunity to compound economic growth from the Games is offered by the conversion and sale of athlete accommodation into affordable housing. The global trend towards urbanisation has placed greater pressure upon existing low-income housing stock and while the development of athletes’ villages does little to address systemic issues, it at least has the potential to help ease waitlists in the short-to-mid term.


For the development of affordable housing to prove effective, the Centre of Housing Rights and Evictions insists that a ‘precise definition’ for what hosts regard as ‘affordable’ housing must be specified.[9] ‘Affordable’ housing offered after the London 2012 Olympic Games was listed at prices as high as 80% of market value and was unobtainable for many low-income earners in the surrounding area.[10] It is not for this analysis to determine where the affordable rate may sit, nor precisely what the quota of affordable to market-rate housing might be, but rather to stress that these are considerations local governments must be open to considering.


This is especially so given that additional infrastructure created by the Games has traditionally raised the price of available stock and out-priced residents. In the four UK iterations since 1970, property values in host cities rose by an average of 14.9% within a year of the Games taking place.[11]


Of course, the increased value of this stock means that suppressing a certain proportion below market value waivers a sizeable source of income. Forgoing some of this revenue must be accepted firstly as an opportunity to advertise social investment for political gain, but also to stimulate local growth by allowing more disposable income that would otherwise be spent on rents and mortgages. This is integral to ensuring the economic benefits of the Games endure long after the event itself concludes.

 

2.     Establishing a campaign to showcase the region as a tourist destination.


Another core aspect of extending the economic stimulus of the Games is encouraging tourism. The media spotlight presents an opportunity for ‘the reinforcement of the favoured image of the host nation or city’ that is unique in how heavily it can be planned and controlled.[12]


The marketing phenomenon of the Barcelona 1992 Olympic Games is ‘almost universally considered a great success’ in transforming its image into a hotspot of global tourism.[13] By showcasing its Mediterranean climate and vibrant coastal community, media attention on Barcelona eroded previous perceptions of a cultural backwater and saw an influx in hotel visitors from 1.7 million in 1990 to 3.1 million in 1995.[14] This has since climbed to 9.5 million as of 2019[15].


Compared with Barcelona, potential Commonwealth Games hosts have had the benefit of social media as a new means of generating publicity and showcasing the local area. Its capacity to reach broad audiences has risen to be on par with traditional television media, with social media engagement during the 2022 Qatar World Cup 448% greater than the previous tournament in 2018.[16] Social media teams carrying little more than mobile phones can provide far more extensive coverage of the host region than a more cumbersome and expensive camera crew. Additionally, providing designated ‘selfie spots’ for visitors to take their pictures of curated sites automatically magnifies positive online reach.


Financing local cultural and artistic exhibits is another means of stimulating tourist growth and publicity while also incorporating the local community into the event. These projects invest in the local area and offer incentives for tourists to spend time and money outside of the main event venues. Creating attractions that present a ‘human face’ to the games also generates what Young-Hee Lee and Jung Moon Kim describe as ‘social-cultural legacies’, helping hosts establish a more long-standing and unique identity.[17]

 

3.     Upskill temporary employees to support long-term employment post-Games.


Regardless of how successful or flawed each iteration of the Games has been, all have produced a ‘bubble’ of temporary employment and a fleeting stimulus into the local economy. The role of governments therefore is to ‘capture’ this bubble and transform temporary roles into long-term employment.


The glaring issue is that it is implausible that enough permanent roles can be created quickly to accommodate the tens of thousands of people temporarily employed by the games. Given the difficulties in doing so and the fact that most of those roles are filled by people who are already employed, the main task for organisers should instead be to upskill temporary employees to be more attractive to the wider job market [18].


Apprenticeships and work placement programs throughout the Games can offer a diverse range of positions to those otherwise lacking the required skills. Existing traineeship programs are already being operated by several high-profile sporting bodies, including Manchester United, Formula One and Wimbledon. Supporting the development of skilled employees is essential for boosting employment prospects in the local area long after the games have finished.

 

What can Britain do?


The identity of the Commonwealth Games is invariably tied to Britain. Consequently, Britain holds a vested interest in helping to guide the restoration of financial confidence. There are two primary ways in which the UK government can support the Games and its hosts: Extending an offer of advisory and material support and decoupling the Games from its imperial origins.


The UK needs to be seen playing an active role in assisting host nations with staging the Games. Given its unofficial status as head of the Commonwealth, the expectation falls on Britain to take on a greater role in the planning and management of overseas events. Given the UK’s success as a host – most recently returning a £100 million profit on Birmingham with only 5 years of planning compared to the usual 8[19] – there is reason to believe this support would be welcome.


Extending an offer of advice to international hosts is a strong gesture of support and highlights the benefits that Commonwealth connections can provide. Additionally, advisory roles are not a significant drain on national coffers and can the easily turned down by hosts should they choose to do so. The significance of this latter point will be outlined in a moment.


This support, where feasible, should also include the sharing of infrastructure and technologies. To borrow an example from the Qatar World Cup, Stadium 974 was a temporary venue made of shipping containers that has since been dismantled and is expected to be transferred to Uruguay for the 2030 World Cup.[20] The Alexander Stadium for Birmingham 2022 was fitted with temporary seating to accommodate an extra 22,000 spectators which could likewise be offered to other Commonwealth nations.[21] The transfer of significant infrastructure would be a prominent demonstration of the UK’s support for fellow Commonwealth members and would help to reduce the daunting price tag the Games can come with.


It should be stressed however that these initiatives cannot be forced upon hosts. As outlined by Lord Howell (regarding the budget of the Delhi 2010 Games), ‘it is not our business. We have negligible influence on the matter and I would not presume to tell India how much it should spend.[22] Britain should not be seen to be domineering over how hosts choose to approach the Games. Its role is to be a close supporter, not to contravene hosts’ autonomy.


This need for caution is particularly important given the Commonwealth Games’ historical association with British Imperialism. Founded as the ‘Empire Games’, its colonial legacy is a source of tension with its progressive and cosmopolitan modern identity. It is not only for the Games’ own sake that any imperial vestiges should be erased but also so that Britain’s image, especially amongst postcolonial states, is less burdened by its history.


As part of this, the role of the Royal Family in the Games ought to be scaled back. This is not to suggest that the family is necessarily a symbol of imperialism, but rather out of recognition of the Games’ focus on a more cosmopolitan image. The CGF’s current plans to ‘extend Royal Family connections’ risk undermining this progressive identity and reinforcing negative conceptions of the Games as an ailing vestige of British power. The gradual trend of Commonwealth nations shifting towards republicanism, most recently with Barbados in 2021, means that to continue to associate the Games with the monarchy appears increasingly out of touch with the wider Commonwealth.


In its place, greater publicity should be given towards local stars, particularly women and minorities, to further support the mission of appealing to and showcasing local hosts and cultures, as well as to continue to consolidate the Games’ progressive image. Efforts to promote Australian athletes on social media platforms during the Gold Coast 2018 Games ‘delivered strong results’ and made ‘84 million impressions’ according to the Queensland Government.[23] These initiatives are easily replicable and should be encouraged amongst all hosts as replacements for the Royal Family.

 

Conclusion


While the Commonwealth’s future global significance is uncertain, the same cannot be said for many of the states within it. It is clear that within its ranks lie the up-and-coming powers of the 21st Century and the uniqueness of an institution containing a sizeable portion of influential developing states means it is worth the effort to preserve.


For this to be successful, the Commonwealth Games cannot be allowed to slide further into obscurity, lest it diminish the importance Commonwealth members place on the Commonwealth and on Britain itself. Having cast itself off from the EU, it is vital for Britain’s economic prosperity and political relevancy that it integrate itself further into other international groupings like the Commonwealth. Failure to do so risks leaving the UK washed up on the margins of global politics without a firm network of economic and diplomatic ties.


The Commonwealth Games will not single-handedly keep the Commonwealth afloat, but it is the most prominent indicator of its health and can help establish a broader institutional norm of closer interaction if members are made to see the benefits of cooperation with Britain in managing the games.


References

 

Audit Scotland, Commonwealth Games 2014 Third Report, 2015, https://www.audit-scotland.gov.uk/docs/central/2015/nr_150312_commonwealth_games_third.pdf.


Baru Sanjaya, Robertson Ross and Dr Otubanjo, Femi, Should Britain try and take lead in the Commonwealth?, Institute of Commonwealth Studies, 2023, https://commonwealth.sas.ac.uk/blog/should-britain-try-and-take-lead-commonwealth.


Birmingham City Council, New Alexander Stadium takes shape as impressive redevelopment progress at pace, 2020, https://www.birmingham.gov.uk/news/article/771/new_alexander_stadium_takes_shape_as_impressive_redevelopment_progresses_at_pace.


Birmingham Organising Committee for the 2022 Commonwealth Games Ltd, Consolidated Report and Financial Statements For the 18 months ended 30 September 2022, 2022, https://resources.cwg-qbr.pulselive.com/qbr-commonwealth-games/document/2022/12/22/790ee4a6-7a17-4eff-ab0d-322c754bf102/Birmingham-Organising-Committee-for-the-2022-Commonwealth-Games-Ltd-Signed-NAO-signed.pdf.


Birmingham Organising Committee for the 2022 Commonwealth Games Ltd, Interim Evaluation of the Birmingham 2022 Commonwealth Games, 2023, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1128687/Interim_Evaluation_of_the_Birmingham_2022_Commonwealth_Games_-_Interim_Evaluation_Report.pdf.


Centre on Housing Rights and Evictions, Hosting the 2012 Olympic Games: London’s Olympic Preparations and Housing Rights Concerns, 2007, https://www.ruig-gian.org/ressources/London_background_paper.pdf.


Chakraborty, Amlan, Games – India firms up boycott threats over shooting exclusion, Reuters, 2019, https://www.reuters.com/article/uk-games-commonwealth-india-idUKKCN1UN0H9/.


Chung, Wonjun, and Wan Woo, Chang. "The effects of hosting an international sports event on a host country: the 2008 Summer Olympic Games" International Journal of Sports Marketing & Sponsorship, vol. 12, no. 4, 2011.


Commonwealth Games Federation, 2026 Commonwealth Games Statement, 2023, https://www.commonwealthsport.com/news/3639464/2026-commonwealth-games-statement.



Ecotech Research and Consulting Ltd, An Evaluation of the Commonwealth Games Legacy Programme, 2005. Employment, Labour and Social Affairs Policy Briefs, Social housing: A key part of past and future housing policy, OECD, 2020, http://oe.cd/social-housing-2020.


Hill, Dave, London 2012 Olympic Park: What’s really happened with housing?, On London, 2022, https://www.onlondon.co.uk/london-2012-olympic-park-whats-really-happened-with-housing/.


International Olympic Committee, London 2012 to provide long-lasting economic benefits, 2013, https://olympics.com/ioc/news/london-2012-to-provide-long-lasting-economic-benefits.


Lee, Young-Hee, Kim, Jung Moon. “Olympic Health Legacy; Essentials for Lasting Development of Host City” J Lifestyle Med, vol. 2, no. 1, 2013.


McBride, James and Manno, Melissa, The Economics of Hosting the Olympic Games, Council on Foreign Relations, 2021, https://www.cfr.org/backgrounder/economics-hosting-olympic-games.


Murray, Jessica, ‘Birmingham could pull it off’: city considers hosting Commonwealth Games again, 2013, https://www.theguardian.com/uk-news/2023/jul/27/birmingham-could-pull-it-off-city-considers-hosting-commonwealth-games-again.


Oliver, Brian, Exclusive: Commonwealth Games to downsize after Birmingham 2022, 2021, https://www.insidethegames.biz/articles/1108441/commonwealth-games-downsize-birmingham22.



PBC Today, Designs unveiled for redevelopment of Alexander Stadium, 2019, https://www.pbctoday.co.uk/news/planning-construction-news/alexander-stadium-redevelopment/58924/.



Queensland Government, Gold Coast 2018 Commonwealth Games Post-Games Report, 2019, https://www.insidethegames.biz/media/file/138483/gold-coast-2018-commonwealth-games-post-games-report.pdf.


Skelton, Jack, Stadium 974: What happens next to the first temporary World Cup stadium?, 2022, https://www.bbc.co.uk/sport/football/63885578.


Trillas Jané, Francesc and Serrano, Eloi. “The Economics of Major Sporting Events: The Case of the Barcelona Olympic Games. An Overview 25 Years Later” European Accounting and Management Review, 2016, vol. 2, no. 2, 2016.


Watson, Yasmine, Commonwealth Games likely to increase house prices, Introducer Today, 2022, https://www.introducertoday.co.uk/breaking-news/2022/7/commonwealth-games-likely-to-increase-birmingham-house-prices.


Wilson, Wendy and Barton, Cassie, What is Affordable Housing?, House of Commons Library, 2023, https://researchbriefings.files.parliament.uk/documents/CBP-7747/CBP-7747.pdf.


 

Footnotes


[12] Chung, Wonjun, and Wan Woo, Chang. "The effects of hosting an international sports event on a host country: the 2008 summer Olympic Games" International Journal of Sports Marketing & Sponsorship, vol. 12, no. 4, 2011.

[13] Trillas Jané, Francesc and Serrano, Eloi. “The Economics of Major Sporting Events: The Case of the Barcelona Olympic Games. An Overview 25 Years Later” European Accounting and Management Review, 2016, vol. 2, no. 2, 2016.

[17] Lee, Young-Hee, Kim, Jung Moon. “Olympic Health Legacy; Essentials for Lasting Development of Host City” J Lifestyle Med, vol. 2, no. 1, 2013.

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