New Hosts Needed

HOST CITY CONTRACT

NEW HOSTS NEEDED

The absence of both China and Russia as suitable hosts for sporting events in the foreseeable future leaves a massive void for organisers, and significant knock-on effects. But it could also be a chance for new venues to stake their claim, as David Owen reports.

Remove two big players from any market and the consequences will be far-reaching. This applies whether you are talking about widgets or reinsurance. It certainly applies to the market for the hosting of major international sports events, which is the subject of this article. The disappearance from the ranks of possible hosts of Russia and China - two countries which have staged scores of events, including a FIFA World Cup, three Olympic Games and World Championships galore, since the turn of the millennium - is already having a big impact on International Federations and other event owners.

The two situations are, of course, different. Russia’s exclusion, as a consequence of the war it has unleashed on Ukraine, is likely to be long-term. China’s absence, while it battles COVID, may be less so.

For the time being, though, event-owners are having to get along without both of these sports-hosting giants, and the financial knock-on effects may be profound. You might think that with more than 200 countries in the world, along with scores of ambitious cities keen to lift their international profiles, there would be plenty of candidates to fill an admittedly large hole.

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Russia has lost the hosting rights to flaghsip events including the Ice Hockey World Championship. Photo: Getty Images

This might well turn out to be the case. The present situation may even trigger other positive developments. As Lars Lundov, chief executive of Sport Event Denmark, reasons: “It is obvious that the war in Ukraine has led to a large number of scheduled major sporting events being moved away from Russia, including most recently the IIHF World Ice Hockey Championship 2023, which is now to be held in Finland and Latvia.

“The unfortunate situation with Russia’s invasion of Ukraine allows new destinations at short notice to host major sporting events.

“Hopefully we will see innovative event set-ups as a consequence of the short action-time. Also, we will see experienced collaborations in Olympic summer sports offering their assistance, for example the upcoming FIVB Men’s World Volleyball Championship now to be organised in Slovenia and Poland.” But the characteristics of China and Russia as sports event hosts will mean that they are much missed even if replacements do step forward. For one thing, they are immensely experienced. Event-owners could rest assured, on the whole, that competitions staged in either country would be technically outstanding. The rationale of these two countries for staging sports events so assiduously also contributed significantly to their appeal for event-owners. In short, generating a direct commercial return on their investment tended, so far as one could tell, was well down the list of goals they aimed to achieve via hosting.

Their chief objectives appeared rather to lie in the realm of boosting national prestige, augmenting soft power and sometimes helping to justify and stimulate infrastructure investment. This has served arguably to boost the apparent value of second-tier sports events well beyond the level that the commercial marketplace would suggest was appropriate. The abrupt withdrawal of Russia and China may hence force event-owners to reconsider how much revenue future events will realistically generate.

The cupboard is not entirely bare in terms of hosts whose objectives seem to extend beyond purely commercial considerations, as the oil and gas-rich nations of the Middle East, headed by Saudi Arabia, remain very much in the market. But there are only so many events they can, or would want to, accommodate. And just because their objectives may be geared to image projection at least as much as more narrowly commercial gauges such as direct, short-term economic impact, it does not mean that they cannot also be hardnosed negotiators.

Less competition may well lead to them concluding that they can afford to be less generous in the terms they offer to secure the events they want, even if the upsurge in energy prices delivers them a financial windfall. As Lars Haue-Pedersen, head of global sports practice at BCW, an international communications and public relations firm, sees it: “The consequences for many international event rights holders - both IFs and private promoters - are very serious, in some cases dramatic. “Both Russia and China have in recent years invested heavily in attracting international sports events, and deals were closed with event owners for a wide range of events. In the case of Russia these were absolutely top tier events like Volleyball World Championships, Wrestling World Championships and Ice Hockey World Championships - and of course the recent

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The 2023 Asian Cup was supposed to be a breakthrough event for football in China but will now be held elsewhere. Photo: Getty Images

football Champions League final. “The rights holders had to rush to find replacements and will face planning issues, but will probably also have to conclude less attractive financial deals.”

China has announced the postponement of both the Hangzhou 2022 Asian Games and the Chengdu 2021 Summer World University Games, as it pursues an ambitious “zero COVID” policy which has forced cities such as Shanghai into strict lockdowns.

This year’s Asian Youth Games in Shantou have also been cancelled completely. “The situation in China seems to be a constant postponement of events and, at a certain stage, rights holders will have to decide whether to skip the Chinese hosting and move elsewhere,” said Pedersen. “This was the case with the Asian Football Confederation’s decision definitively to move the 2023 Asian Cup away from China. This decision must have been painful for the AFC, as the 2023 event had been positioned for years as a breakthrough for football in China.” I doubt that any IF has turned to Russia and China to host its events more frequently in recent times than the International Chess Federation.

By my count, the men’s Chess World Championship has been held in Russia four times since the turn of the millennium. Over the same period, the Women’s World Chess Championship has been staged no fewer than seven times in Russia and twice in China. In addition, the two nations have co-hosted the women’s event twice, in 1999 and 2020 when the event was shared between Shanghai and Vladivostok. This is not really surprising: chess permeates the soul of Russia as rugby permeates the soul of Wales or cricket that of India. I experienced this first-hand all the way back in 1984, when attending the World Championship match between Anatoly Karpov and Garry Kasparov in Moscow’s 18th-century House of the Unions. The atmosphere among the chess connoisseurs who thronged the ornate building was electric. When I approached David Llada, FIDE’s chief marketing and communications officer, he acknowledged that the financial implications for his organisation were “considerable”. First, Llada said, FIDE “decided to cut ties with most of our Russian sponsors - all those that are state-owned. With some of them, like Gazprom, we had signed long-term agreements for several years”. He explained that FIDE had also lost “many potential bids” as Russian cities and institutions are “always willing to host important FIDE chess events”. However, as Llada also pointed out, chess is currently benefiting from what he called a “sweet moment”. “A combination of factors has sparked a ‘chess boom’ in the past couple of years,” he said.

“The rise of esports, Twitch, and other

Russia hosted the FIFA World Cup as recently as 2018 but is now being frozen out. Photo: Getty Images streaming platforms, which chess fits perfectly, [has helped], and this trend received a huge push during the lockdowns resulting from the pandemic.

“The global success of The Queen’s Gambit by Netflix has also brought chess to millions of people who, all of a sudden, developed a strong interest the sport.” FIDE, Llada said, was “confident that all this interest will generate a new influx of income and hosts that will quickly fill the void left by Russia”. The statement of income and expenses in FIDE’s 2020 audited financial statements seems to bear out these trends. On the one hand, net income from online events amounted to more than €673,000 against just €100,000 budgeted. On the other, donations and sponsorship brought in around €1.47 million, versus €2.3 million budgeted. According to FIDE director general Emil Sutovsky, whereas in 2019, the “better half” of FIDE income came from sponsorship and events in Russia, by 2022 this proportion should be more like 25 per cent. The largest contributions to the budget, Sutovsky explained, came through “the agreements with online platforms chess.com and chess24 acquiring broadcasting rights for FIDE major events”. He concluded: “FIDE terminated all contracts with Russian state-owned and controlled companies - which did cost us quite a bit of money. But luckily we have diversified our partnerships and the loss of this sponsorship did not have a critical impact on our operations.” The present situation in sport, with a number of events needing to be relocated at short notice, contains risks for those host cities and nations which step into the breach as well as for event-owners.

At the time of writing, it remains to be determined whether reduced preparation time was in any way a contributory factor to the crowd chaos at the Champions League final between Real Madrid and Liverpool.

This was ultimately staged at the Stade de France just outside Paris after the European football body UEFA decided to move the match from Saint Petersburg in Russia.

The episode has for now tarnished France’s hitherto strong reputation as a frequent host of high-calibre international sports events. Needless to say, this has not come at the best of times, with the French capital set to stage the next Summer Olympics and Paralympics just two years from now.

Then again, it provides an opportunity for current systems and methods for handling

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high-profile international events on French soil to be scrutinised with a view to assessing whether improvements are necessary. BCW’s Pedersen believes that the relatively extended nature of Russia and China’s probable absence from the market is likely to raise other issues. “In addition to solving urgent replacement issues, the fact that Russia and China are effectively out of the international event hosting market for 2022 and - at least 2023 - will also have longer-term consequences because rights holders will be forced to rethink their ‘going to new markets’ strategy,” he said. While he believes that the “winners” from this situation could be the “already very ambitious” countries in the Gulf region, he also hopes that rights holders - “not least the IFs” - may view it as “an opportunity to reach out to, and engage with, more African and South American countries in terms of event hosting”. He would view such an approach as an example of “never letting a good crisis go to waste”, as the saying goes. Pedersen also surmises that Russia and China’s absence from hosting duties could have consequences for the degree of influence wielded by the two countries in sports politics generally. As he sees it: “An interesting side-effect of Russia and China being out of international event-hosting could be a reduction of the two countries’ influence on international sports politics, because such influence is often closely connected with such event-hosting. “Both countries have been very active on the international sports politics front, running for - and in several cases succeeding in securing - IF leadership positions. “In the case of Russia this is obviously suffering as a direct effect of the current, somehow unofficial, boycott. But China could also see its position weakened because of its diminishing role in the international event scene. “The less a country is active in eventhosting, the less important it and its sports leaders become.” Many would argue that it can do international sports bodies nothing but good if they are obliged to steer clear of Russia and China when determining where future international events are to take place.

Better by far, they might say, to team up with societies with Western standards of freedom of speech and democratic values, even if it costs event-owners a few dollars in projected cash flow. It is easy to sympathise with such views and to acknowledge that, in the long run, yes, it may well be to international sport’s advantage to have its pinnacle events bracketed with national and civic leaders who embrace the principles of Western-style liberal democracy. However, the short-term disruption for event-owners if the value of their competitions starts to be set by the commercial marketplace, consisting of entities which need to see a real dollars-andcents return on any sums invested, may in some cases be substantial.

And this at a time when corporations and sports consumers alike are having to cope with new sources of turbulence and uncertainty. On event-hosting, as with many other aspects of the sports industry at present, the road ahead looks anything but straightforward.

Chess has often turned to Russia and China in the past but now must think of new ideas. Photo: Getty Images