Olympic movement must adapt to financial reality, says IOC’s Thomas Bach

These are difficult times for the Olympic movement.

A slumping Brazilian economy has forced organizers to slash hundreds of millions from the budget of the upcoming 2016 Summer Games.

At the same time, Hamburg has dropped out of the bidding for 2024, leaving four remaining candidates — including Los Angeles — to make financial sense of the massive, elaborate competition.

All of which has revived questions about the future of the Olympics.

“Times have changed,” said Thomas Bach, president of the International Olympic Committee. “The Games need to change as well.”

Speaking to The Times after a week of executive board meetings at IOC headquarters in Switzerland, Bach insisted it will take time for a series of cost-cutting reforms to take hold.

Agenda 2020 seeks, among other things, to make the Games affordable enough that cities will want to bid. A year after its enactment, it has produced initial results but has a ways to go.

“For us, every bidding cycle is a test,” Bach said.

If there were a tipping point for the IOC, it was during the last two years, starting with reports that Russia had spent an unprecedented $51 billion on the 2014 Sochi Olympics.

Four cities subsequently dropped out of the running for the 2022 Winter Games, with cost as a primary concern. Beijing ultimately won the final vote over Almaty, Kazakhstan.

While small fields are not entirely new — Los Angeles was the only bidder for the 1984 Summer Games — the IOC recognized it had a problem.

By that time, Bach had already been elected president on a platform of change. Yet, critics suggested that from the outset Agenda 2020 had sidestepped a significant issue.

The cost of recent Olympics has risen dramatically with the IOC continuing to choose cities that promised to build clusters of stadiums and arenas. Host governments have tacked on tens of billions in infrastructure that may or may not have been necessary for the Games themselves.

Russia constructed hotels, shopping centers and roads, creating a resort from scratch. Beijing will lay an expensive high-speed railway from the city to the mountains.

Given the IOC’s apparent historic preference for extravagant bids, Bach was asked whether committee members should now choose more economical options.

“These are the sovereign decisions of cities, parliaments and countries,” he responded. “There are sovereignties the IOC must respect.”

Agenda 2020 has focused instead on altering the bid process.

No longer are candidates presented with strict requirements and sent on their way. The current bidders for 2024 — including Paris, Rome and Budapest — hold frequent discussions with IOC staff on how to tailor bids to best suit their cities.

This has led to some uncertainty as both the bid cities and the IOC feel their way. Said Bach: “Of course flexibility is always a learning process.”

On paper, at least, Agenda 2020 has limited the number of formal presentations, which can save millions of dollars, and encouraged hosts to make use of existing venues.

That fits with Los Angeles’ initial plans, which include Staples Center, Pauley Pavilion and StubHub Center. The private LA 2024 bid committee hopes partnerships will defray other costs.

USC is expected to perform much of the renovations needed at the Coliseum. Developers would join in building the athletes village and media center.

LA 2024 has estimated a total cost of about $6 billion, with projected revenues slightly exceeding the organizing committee’s portion of that amount.

Paris, the other presumed frontrunner for 2024, is also expected to put forth an economical plan with many venues already in place.

“We can already see the new approach,” Bach said. “They are discussing concepts of locations of venues which are quite different from the previous candidatures.”

Even Tokyo, which won the 2020 Games before reforms were passed, has cut costs.

The big question is: When the IOC convenes in about two years to select a host for 2024 — culminating the first full bidding cycle under Agenda 2020 — will membership reverse its history of voting for the city that offers the shiniest toys?

“This vision has been shared by the IOC members,” Bach said. “They pushed it forward and adopted it.”

Still, critics see potential problems.

Host city selection will still be conducted by secret ballot, so individual members will not be accountable for their votes. Candidates still must sign a contract that holds the city responsible for cost overruns — a sizable risk for an event that has a history of busting budgets.

While saying “the IOC never wants to draw on this guarantee,” Bach defended its inclusion, insisting the committee needs legal protection against a private bid committee going bankrupt and folding shortly before the Games.

“This is just like when a citizen is building a house and there is a general contractor,” he said. “The contractor has to sign for a price.”

The IOC has also been criticized for eliminating an initial bid phase that weeds out weak candidates. Now everyone stays alive till the final vote, and cities could spend upward of $50 million on a campaign they have no real chance of winning.

Bach expects that frequent communication with the IOC will result in candidates knowing whether they should withdraw. But there is a conflict of interest: A large field for the final vote makes the IOC look good.

In the long run, it seems, membership must consider a broader perspective.

The cost of bidding and hosting must decrease for cities to stay interested. Discussions about money must give way to talk about what Bach calls “the soft benefits” of the Games.

The spectacle of sport. Peaceful competition between nations. A chance for communities to rally around a unique event.

“The concept of the Games has to be adapted to modern times,” Bach said. “We need some changes.”

david.wharton@latimes.com

Twitter: @LATimesWharton