It was fun while it lasted. Bergen’s much-hyped hosting of the cycling world championships last fall went from a dream to a nightmare, with its top officials blamed for “shocking incompetence” regarding its financing. Now the organizing firm Bergen 2017 AS has been declared bankrupt and Norway’s national cycling federation faces a budget deficit of NOK 35.4 million.
The financial problems and huge budget overruns tied to last year’s cycling world championships started showing up right after the festive event ended late last September. At the center of it all was the president of Norway’s cycling federation, Harald Tiedemann Hansen, who also led Bergen 2017 AS and initially seemed to dismiss the serious nature of the event’s heavy losses.
“It was free to come and watch and we’re glad about that,” he told local newspaper Bergens Tidende on the proverbial morning after. He and his colleagues had trouble attracting sponsors, faced some unexpected expenses and even currency exchange issues, while the heavily promoted event didn’t even generate the hotel or tourism trade that had been expected. The events company that had been used by Bergen 2017 and became one of its biggest creditors also ended up having to file bankruptcy.
More disturbing revelations emerged: Organizers planned the event for four years before they addressed any preparedness plans in the case of emergency. Suppliers weren’t being paid for their goods or services delivered to the event. Young cyclists accused Hansen of being arrogant, sarcastic and even bullying them, and threatening critics into silence. When news broke in November that the organizing firm had a budget deficit of NOK 55 million, which put the finances of the national cycling federation in danger, even cycling star Alexander Kristoff went public with harsh criticism and claimed Hansen and his colleagues lost control of the championships and its economy.
“This is a low blow,” Kristoff told reporters. “I remember there were hard times when I joined the national team, and now we’ll quickly return to that.” Others criticized Hansen and Bergen 2017 AS for having fallen into the “luxury trap,” of event organizers spending beyond their budget.
When Hansen sought a bailout as early as October from either the national athletics federation (Norges idrettsforbund) or the state government, he received no sympathy nor assistance. They were never involved in the event although the state had already granted NOK 52 million to help cover expenses. They weren’t about to get any more money from the state. Residents of Bergen then tried to bail out the organization themselves, but only raised a fraction of what was needed through voluntary donations.
The government minister in charge at the time also demanded more openness around the event’s financing, which had sparked four letters from auditors warning of botched accounts, and a critical report that the cycling federation withheld from the national athletics federation.
Hansen, meanwhile, had a double role as president of both the cycling federation and leader of Bergen 2017 AS, which had the agreement to host the world championships with the international cycling union (UCI). More critical headlines about Hansen’s roles continued through the winter, yet he survived a power struggle within the cycling federation and continued as its president after an extraordinary meeting in January. He decided not to run for re-election as president this month, but avoided being sacked.
Last week came news that the federation’s deficit as a result of the festive but poorly managed world championships amounts to NOK 35.4 million, twice what it was expected to be. Now Hansen seemed repentant.
“No one is sorrier about this than me,” he told the federation at a meeting last week. “I understand that in this frustrating situation people try to find a scapegoat. I of course am aware of my responsibility and have never tried to put blame on others.”
Norwegian Broadcasting (NRK) reported just last week, though, that Hansen had also agreed to a clause in the agreement with UCI that allowed it to keep the cycling federation’s deposit of NOK 5 million if the organizers didn’t pay everything owed to it. Hansen reportedly hadn’t even let the federation’s board know about that.
Others left to cut costs and clean up
Hansen remains a board member of UCI. He has resigned as leader of Bergen 2017 AS, leaving its new leaders literally holding the bag. “We are very sorry about this, especially on behalf of all the creditors who now lose their opportunity to receive partial payment of their claims,” Mona Hellesnes, board leader of Bergen 2017, told reporters on Monday after one of its large creditors, Interspons, forced the bankruptcy filing. “And I’m especially sorry that we didn’t manage to find a solution quickly enough.”
Newspaper Aftenposten has accused Bergen 2017 and Hansen of “shocking incompetence,” editorializing that while athletic leaders often seem to lack financial management skills, the losses suffered in the cycling world championships were stunning.
“Yes, the world championships were a successful event and a great party, but it’s not difficult to arrange parties when you don’t pay attention to the bills they generate,” Aftenposten wrote, adding that the huge budget overruns that often arise from major sporting events from the Olympics on down, “unfortunately” reflect an athletics movement that seems to think its good values exempt it from the rules that apply to the rest of society. It’s an attitude, the paper warned, that can leave athletics bosses and sports bureaucrats from the IOC to local football clubs with little credibility from taxpayers who often wind up with the bill.