British taxpayers will find it extremely difficult to buy prime seats to the biggest Olympic events
Tickets at a premium
Published:
Bearing in mind the original cost to taxpayers of staging London’s 2012 Olympics was, politicians assured us, capped at £2.4billion, few folk of sound mind actually believe the current figure of £9.3billion will not rise significantly, particularly as that sum was last revised in 2007.
A lot more of your money, dear reader, will ultimately be required to properly fund the predictably pricey quadrennial sportsfest and it will be handed over without question.
This will hardly come as a surprise to those who have watched in disbelief as huge amounts of taxpayers’ cash has been thrown at several technically insolvent businesses (ie banks) to keep them afloat and ensure that senior personnel within these failing enterprises are handsomely rewarded.
Many people dismayed at the mind-boggling cost of these two breathtakingly expensive projects have comforted themselves in the belief that they could at least attend some of the London games’ most iconic events.
However, any plans to travel from Scotland to watch, say, the opening ceremony, the sprint relays, 1,500 metres finals or Usain Bolt go for gold in the sprint finals ‘live’ should be put on hold.
This has nothing to do with tickets not going on sale until next year, but with the fact that British taxpayers who have funded the games, and who will pick up the tab for all additional costs long after the IOC freeloaders have left town, will find it extremely difficult to buy prime seats to the biggest Olympic events.
It was revealed last week that the London Organising Committee for the Olympic Games has already sold around 130,000 premium tickets. Just under half of them (60,000) have gone to a New Jersey-based company founded by a Yugoslav-born man who admitted under oath to handing over £80,541 to Salt Lake City officials who used the cash to bribe IOC members.
Sead Dizdarevic, majority owner of US-based Jet Set Sports, is the fortunate buyer of 60,000 premium Olympic tickets from Locog. He first came to prominence during the biggest scandal in recent Olympic history – when accusations were aired that Salt Lake City officials spent more than £614,817 currying favour with IOC members whose votes were responsible for selecting the host city for the 2002 Winter Games.
In 1994, the year before Salt Lake City was awarded the games, the local bid committee’s two prime movers, David Johnson and Thomas Welch, approached Dizdarevic and requested cash contributions for their city’s Olympic cause.
Sensing a lucrative commercial opportunity, Dizdarevic began taking cash withdrawals from his bank accounts, always in amounts of less than £6,148 to avoid the US Internal Revenue Service’s prying eyes, and keeping the money in a safe until it was time to hand it over.
Dizdarevic's sister-in-law, Maria Jedrejcic, employed at the time as Jet Set's chief financial officer, also passed tens of thousands of dollars to Johnson and Welch.
In total, Jet Set gave £80,541 in cash to the two men.
Reflecting on the scandal much later, Dizdarevic defended the payments as a patriotic gesture to bring the Olympic Games to the United States. “It's my duty," he said. “I'm a naturalised US citizen, and this is my new country."
It later transpired that this patriotic soul had given several Salt Lake bid organisers huge travel discounts as they marketed their city across the globe.
Four years after Salt Lake had been awarded the 2002 games, details of the scandal began to unwind as an internal IOC investigation discovered that several IOC voting members and their families had received cash, gifts and even college tuition from Welch and Johnson.
After prosecutors promised Dizdarevic immunity from charges, he agreed to testify in a trial against the pair and in 2000, federal prosecutors charged them with 15 counts of fraud and conspiracy.
At the same time, and in return for a sizeable sponsor fee, Salt Lake officials agreed a deal with Dizdarevic to make him the official travel and ticket packager for the games, an arrangement that returned him a reported £4.3million. He has since been the official hospitality provider at every Olympics, both summer and winter, and is the exclusive ticket agent and Olympic travel package provider for a number of national Olympic committees, including Canada, Australia and the United States.
Naturally, these deals give him access to more Olympic tickets and exclusive rights to sell hospitality packages in those countries. While some observers balk at what looks remarkably like a cash-generative monopoly, Dizdarevic claims the prices of his hospitality packages are determined by supply and demand.
Olympic rules specifically forbid any company from charging mark-ups on tickets, but this is easily circumvented by including tickets as part of expensive accommodation and travel packages.
Dizdarevic will not, therefore, make any money directly from the sale of the 60,000 premium Olympic tickets he has bought from Locog. However, as part of the deal, he has also acquired 1,000 hotel rooms (from Locog) for the duration of the 2012 games. These 17,000 room-nights had already been pre-booked at fixed prices several years ago.
The situation is a ‘win-win’ one for Dizdarevic for he can bundle tickets to premium Olympic events with relatively inexpensive (for him) fixed-price accommodation, transportation and meals to generate significant profits. Such arrangements, effectively unregulated by Olympic officials, ensure that Dizdarevic’s companies can charge the corporate sector, sponsors and whomever else is prepared to pay whatever they want.
His company officials recently confirmed that they are the largest buyer of Olympic tickets for the Vancouver winter games scheduled to start in just over a fortnight.
Reports suggest Jet Set and CoSport (another Dizdarevic company) have accumulated more than 125,000 tickets – around 8% of the total. They will also control an estimated 2,000 local hotel rooms during the games, which run between February 12 to 28.
It should be said that there is absolutely nothing illegal about Jet Set’s or Co Sport’s operations, so as Olympic tickets do not officially go on sale to the public for more than a year, both organisations can continue to stock-pile tickets.
When the number of tickets distributed to more than 200 national Olympic committees, sponsors, the IOC, the media and broadcasters are taken into account, it’s evident that the quantity remaining for the people who are underwriting the cost of the games, ie British taxpayers, is diminishing.
Very few of these taxpayers will be surprised when the ‘official’ cost of the Olympics inevitably rises, and fewer still will be staggered to learn that though they’ve paid to stage London’s 2012 sporting party, many of their invitations to attend have already gone to strangers.
