The competition for government funding of major sports events: why do some applicants pass the needle’s eye?

ABSTRACT

Major event organisers apply for government financial support. This paper investigates the selection process of events in Norway based on empirical data from 2012 to 2018. In this period, 11 events were granted NOK 476 million (€47.7 million), whereas five events were rejected. The funding was highly concentrated, with 92% being distributed to four events. Although the Norwegian government positively supports major events, a policy on event selection has not been established. This paper shows that the absence of criteria for event selection opens up pragmatism, which encourages lobbying and ad hoc solutions. All the applicants argued that their events would generate economic gains and various forms of externalities. The most successful applicants associated themselves with politicians who lobbied on their behalf. Politicians and event organisers were closely related in these cases. Some events successfully connected their own aims with aims in the government’s political programme. Three events that received the most government support also received additional funding when unexpected problems emerged during the preparations. In these cases, the fear of cancelation created situations of urgency that helped the applicants receive additional funding. Cancelation of the events would have created a loss of prestige, not only for the organiser but a number of other stakeholders.

KEYWORDS:

• Sport event hosting policy
• public grants
• externalities
• lobbyism

Introduction

Many governments have made major sporting event hosting an important policy objective by providing grants to cover operational costs and invest in venues (Mules 1998, Gratton et al. 2005, Alm et al. 2014, Potter 2016). Additionally, public sector agents provide subsidised services to organisers. Therefore, the events represent a financial burden on the public sector. Empirical data from 13 Olympic Games during 1972–2006 show that the public sector covered at least 50% of the revenues for eight of these Olympic Games (Ganberg and Myhre 2008, Preuss 2008).

One reason for this policy is that the organisers are mainly concerned about their individual revenues and costs. Therefore, the impacts that affect others or occur after the main event risk being neglected. Furthermore, since the local event organisation is disbanded after the event, they mainly emphasise short-term impacts (Chalip 2004). Thus, this condition represents a welfare economic rationale for government intervention (Solberg 2017).

However, government resources spent on events can be allocated to other goods and services. Economic efficiency requires resources to have the same social marginal value in the alternative allocations (Stiglitz 2000). If not, welfare in society can be improved by reallocations of resources. This condition raises questions regarding the criteria of event selection. Are the distribution decisions based on rational plans? If so, on which criteria?

These issues represent the background to the research question of this paper. Why are some events supported? Which arguments and instruments do the lucky applicants use to pass the needles’ eyes?

This study used empirical data from Norway, which has a long tradition of hosting major sports events, of which many have received support from the national government. In the research period from 2012 to 2018, government ministries received 16 applications for funding from event organisers. Eleven of them were granted NOK 476 million (€47.7 million) by 31 December 2018, whereas five were rejected. Special attention will be paid in the ‘top four’, which received 92% of the grants.

The rest of the paper is structured as follows. Section 2 provides a literature review. Section 3 discusses relevant theoretical perspectives of the analyses. Section 4 describes data collection. Section 5 presents the events that were accepted and rejected for their government funding. Section 6 analyses the selection processes based on the criteria discussed in the theoretical section. Finally, section 7 provides the conclusions.

Literature review and theoretical perspectives

Many cities have used multiple events of varying sizes for tourism and urban regeneration. Such strategies are driven by an economic and organisational rationale which has been theoretically explained as event leverage. The core idea is to incorporate staged events into destinations and event portfolios and to reflect community needs (Chalip 2004, 2014, Taks et al. 2018).

In the UK, sports events are aimed at promoting urban regeneration and creating leisure, retail, and tourism facilities in former industrial cities (Walters 2011). Denmark has established Sport Event Denmark, a national sports event organisation administered by the Ministry of Culture. It is responsible for bidding processes and hosting major sports events in cooperation with host cities, sports federations, and the government (Sport Event Denmark 2018). Furthermore, Canada is considered a pioneer of sport event hosting policies (see Leopkey et al. 2010 in this regard). Similarly, the national sports governing body of Chile (IND) intended to develop a policy that would facilitate bidding for and organising major regional multisport events (Bravo and Silva 2014).

A speciality with events is that a large proportion of the impacts are distributed to others than the organiser. This pattern applies to both the revenues and costs, but also to the non-monetary externalities. The commercial revenues mainly come from inbound tourism, sponsorship support and sale of media revenues. The host cities can also benefit from government grants, which in some cases, are the most important reason for hosting them (Müller 2015)

Examples of non-monetary externalities can be the ‘psychic income’, such as feelings of pride and unity among local residents and the national population (Howard and Crompton 2005, p. 161). Indeed, many people emphasise these feel-good factors more than the potential economic benefits (Kersting 2007, Maennig and Porsche 2008, Zhang et al. 2013, Hiller and Wanner 2015, Nooij de and van den Berg 2018).

Kavetsos and Szymanski (2010) found that hosting a major event can increase happiness levels, but that the effect depends on the popularity of the sport in the respective region or country. Existing studies also showed that people positively view public funding of events (Andersson et al. 2004, Atkinson et al. 2008).

When national governments fund an event to achieve specific externalities, this creates a principal–agent relationship, with the government operating as a principal whereas those involved in the production and hosting of it are the agents (Douma and Schreuder 2002). The group of agents can for example include the tourism industry, sports clubs, local entrepreneurs, national sports federations, but also the local public sector. This means that the local public sector and the national government operate differently in this manner. The agents will be aware of the government’s rationale to support the event and adapt their applications and behaviour accordingly. For them, the event will create tasks and funding they otherwise would not have received, or which would have come later without the event. By operating together, the group of agents can increase the chances to receive funding.

Such cases often have situations of asymmetric information. Following agency theory, the agents can benefit from behaving opportunistically, for example by misinforming the government and exaggerating the benefits and underestimating the costs of the event. If the agents succeed, the result can be post-optimal subsidising of events (Solberg 2017). Regional stakeholders often consider the events as once-in-a lifetime opportunities to receive grants from their national government (Whitelegg 2000, Andranovich et al. 2001, Müller 2015).

These processes can be analysed through stakeholder theory, which has been widely used to examine the sports industry, including the hosting of events (Leopkey and Parent 2009, Hanstad et al. 2013, Parent 2019). The stakeholders that apply for government funding will have to convince politicians and bureaucrats that their events deserve to be funded (Preuss and Solberg 2006). A stakeholder’s influence can be considered a meeting point of the following three attributes: power, legitimacy, and urgency, as visualised in Figure 1 (Mitchell et al. 1997.)

Figure 1. Expected key stakeholders in a policy-making process for sport event hosting (based on Mitchell et al. 1997, p. 874)

Power exists when a ‘party to a relationship has power, to the extent it has or can gain access from coercive [threat], utilitarian [incentives], or normative means [symbolic], to impose its will in the relationship’ (Mitchell et al. 1997, p. 865). Legitimacy refers to the ‘generalised perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’ (Suchman 1995, p. 574). A state of urgency is characterised by time sensitivity and criticality, where criticality means that the claim must be important or critical for the stakeholder (Mitchell et al. 1997, p. 867).

These attributes are not necessarily mutually exclusive, for example as a stakeholder with power within an organisation may also have a claim of interest (legitimacy) for the organisation. When power is exercised, an element of politics also exists (Parent and Smith-Swan 2013). In addition, the settings and conditions under which struggles for power take place are crucial, for example, as positional characteristics.

All else unchanged, the more attributes the stakeholders encompass, the greater their ability is to influence an outcome. Stakeholders who encompass all three attributes are referred to as definitive stakeholders (area 7 in Figure 1). By contrast, those possessing two attributes belong to either areas 4, 5 or 6; stakeholders in area 4 possess power and legitimacy and are defined as dominant stakeholders. Combining these two attributes can create authority. Stakeholders who are short of power but with a legitimate claim may improve their position by adding urgency to their claim or by associating with more powerful stakeholders, for example politicians. If politicians aim to be re-elected, they are also interested in their voters’ preferences in order to legitimize their policy (Downs 1957). Stakeholders can acquire a position as dependent stakeholders (area 6) by possessing urgency and legitimacy.

Considering prior literature on this topic and research gaps, we have focused on replication logic within stakeholder theory (Mitchell et al. 1997). Stakeholders’ position was not treated as fixed but has been constantly challenged by newly discovered evidence and discussions among researchers until theoretical saturation was reached. For example, the concept of power has been extended by principal agent relationships, whereas the concept of legitimacy has been further discussed with regard to welfare economics rationale. This iterative inquiry is part of theory-building research (Eisenhardt 1989, Eisenhardt and Graebner 2007). Although the following paragraphs discuss linear methods, we have proceeded with constructs, theory, and data and have gathered new necessary data.

Data collection – methods

This exploratory case study was selected to enlighten the phenomenon based on a real-life setting (Yin 2009, p. 18). It applies the logic of replication, in which selected cases provide accounts that may extend, replicate, or contrast the emerging theory (Eisenhardt and Graebner 2007, p. 25).

The major source of data come from interviews and document analysis, where we focused on the relationship dynamics between grant providers and receivers. We conducted interviews with respondents involved in the four events that received the largest grants, namely, the 2016 Lillehammer Youth Olympic Games, the 2014 Chess Olympiad, the 2017 UCI Road World Championships Bergen, and the Arctic Race of Norway. The former three were one-off events, while the latter is hosted annually. A group interview was also conducted with representatives in the Ministry of Culture. The interviews were conducted following qualitative interview guidelines in the literature (McCracken 1988, Tjora 2017). The interviews were open-ended and semi-structured according to the interview guidelines; hence, they reflected newly gained information and provided comfort to the interviewees to avoid their potentially defensive statements (see Yin 2003, p. 90 on this matter). The interviews were transcribed verbatim and further used in within-case analysis while considering the general gaps of interviews, such as self-presented information sources based on accounts of respondents who tend to provide acceptable truth (Dingwall 1997, p. 59).

The documents included grant applications, ministerial letters of acceptance/rejection, government documents and reports, newspaper articles, websites, and reports of sports organisations, internal reports of the event organisers, final event evaluation reports, press releases, popular scientific reports, and consulting reports. Grant applications have been provided by the Ministry of Culture upon the author’s request. Newspaper articles have been collected from A-tekst, the media archive of Norway’s local, regional, and national newspaper editions. Newspaper articles and interviews with grant losers provided sufficient information; thus, the accounts of grant losers were not further explored via interviews.

Interviews and document analysis contribute to the methodological triangulation, that is, a research strategy which would diminish flaws if only one method was applied (Jack and Raturi 2006). As suggested by Yin (2009), the documentary information corroborates the findings from interviews and outlines important facts asked in the interviews. The documents have been examined carefully considering the possible overreliance on these information sources and their alternative aims that target the specific audience (Yin 2009).

Findings

The government finances Norwegian sports through the profits of Norsk Tipping, a national lottery, and the Ministry of Culture provides grants (Enjolras and Waldahl 2007). The funding is spent on sports venues, sports research and exchange work, special activities (e.g. anti-doping), NIF, and local teams (Kulturdepartementet 2017). According to a Ministry of Culture respondent, major sport events are not included:

The policy is that we do not normally provide grants to sports events, simply because this is the part of the sports organisation’s ordinary work … so the sports organisations must find room through other funding or prioritise the funds they have already received as basic support … sports events are the private domain of each sports organisation and a natural part of the sports activities.

The empirical data in Table 1Table 2, however, show some exceptions to this policy in the research period. These exceptions are also legitimised by the government’s official statement, which emphasises the importance of hosting major sports events (Kulturdepartementet 2016a):

International sports events in Norway provide an important inspiration and strengthen the breadth of the sport. They also contribute positively in promoting Norway as a sporting nation and as a tourist destination. Therefore, the government is keen to facilitate the different types of sporting events that can be held in Norway.

Table 1. Interviewees/Institutions

Institution/Event	Respondent’s Position	Duration	Type
Ministry of Culture	Consultants, Group interview (N = 3)	90 min.	Face to face
Lillehammer 2016	Project manager, Norwegian Sport Federation	45 min.	Phone
Lillehammer 2016	Manager for business development, Lillehammer municipality	55 min.	Phone
Lillehammer 2016	Sports consultant, Hedmark county; Manager for development, NIF Hedmark (N = 2)	95 min.	Face to face
Lillehammer 2016	Sports consultant, Oppland County	65 min.	Face to face
Lillehammer 2016	Project manager, LYOGOC	185 min.	Face to face
Lillehammer 2016	Project manager, LYOGOC	140 min.	Face to face
World Cycling Championship	President organising committee	75 min.	Face to face
World Cycling Championship	Marketing and communication director	90 min.	Face to face
World Cycling Championship	Operative leader, Bergen Police	75 min.	Face to face
World Cycling Championship	Director, Bergen municipality	75 min.	Face to face
World Cycling Championship	Sports director, Bergen municipality	70 min.	Face to face
World Cycling Championship	Politician, Hordaland county municipality	55 min.	Face to face
Chess Olympiad	General manager	120 min.	Face to face
Chess Olympiad	President, Norwegian Chess Federation	60 min.	Face to face
Chess Olympiad	Adviser for organising committee, Previous vice president FIDE	90 min.	Face to face
Chess Olympiad	Former mayor of Tromsø	45 min.	Face to face
Chess Olympiad	Board leader, organising committee	55 min.	Skype
Arctic Race of Norway	Managing director	55 min.	Skype
Arctic Race of Norway	President of Norwegian Cycling Federation	90 min.	Face to face

Table 2. Major sports events funded by the Norwegian government during 2012–2018

Event	Government bodies involved in funding	Amount granted (NOK)
2016 Lillehammer Winter Youth Olympic Games	Ministry of Culture	252 million
2014 Chess Olympiad,	Ministry of Culture	87 million
2017 UCI Road World Championships	Ministry of Culture, Ministry of Trade	52 million
2016–2018 Arctic Race of Norway	Ministry of Trade	45 million
2017 X Games	Ministry of Culture	18 million
2017 Homeless World Cup,	Ministry of Culture	15 million
2017 Ladies Tour of Norway Tour of Norway 2017 Tour des Fjords 2017	Ministry of Culture	5.1 million
2015 European Bridge championship	Ministry of Culture Ministry of Trade	1 million
2016 Biathlon World Championship	Ministry of Culture	0.9 million
Total		476 million

Major grants

The funding in this period was highly concentrated, as seen in Table 2. This section will present more details about the strategies of the four applicants that were most successful.

The 2016 Lillehammer Winter Youth Olympic Games (hereby called Lillehammer 2016) was the winner and received 53% of the grants. In 2011 the Parliament decided to grant NOK 173 million, which was subsequently increased to NOK 232 million after a consultancy company evaluated the application and recognised that the initial budget was insufficient to cover all tasks. Moreover, the Ministry of Culture also decided to intervene by becoming the main owner (51%) of the organising committee (LYOGOC). Other owners included Lillehammer Municipality and NIF, holding 24.5% each.

One of the most important aims highlighted in the application for funding was stimulating voluntarism and leadership development among young people, as explained by a NIF respondent:

We need people that want to take part and be a volunteer in Ski World Cups and everything, which is organized every year. To get all these new volunteers, you need a big festival to recruit them … I hope that one of the legacies after 2016 is a new management for a lot of different sports competitions in the region who were educated through these Youth Games.

The application also emphasised aims of building relations and tolerance between youth cultures from different parts of the world. During the time of the Games, young ambassadors should encourage the young athletes’ participation in the cultural-educational programme (Learn & Share) and help them to interact with other YOG participants of different backgrounds and from the different sports. The application also emphasized aims of strengthening Lillehammer’s position as a winter sport destination, as well as non-monetary impacts:

It is 20 years since we hosted the Olympics, so to host them again, even though it’s YOG, means very much for us, from the brand perspective, but we also hope that this will be of great importance for the internal pride in the region. So, we hope that YOG will provide the business development effects through overnight possibilities in the tourism sector, so that more businesses can get something out of the YOG.

However, it took considerable efforts to achieve the support, including lobbying politicians, as an NIF interviewee admitted:

We had to work a lot on the political scene in Norway to obtain the financial guarantee. We worked a lot both with local politicians, regional politicians and, of course, at the parliamentary level.

Lillehammer was the only applicant for the 2016 Games, which strengthened their position towards the IOC. Therefore, they required the IOC to support the event; a strategy with which they succeeded when IOC granted NOK 108 million (NIF 2010). The IOC also gave this support to encourage Oslo’s efforts to apply for the 2022 Winter Olympics.

The initiative to host The FIDE Chess Olympiad came from the Norwegian Chess Federation (NCF), who wanted the tournament to be the main celebration of its 100th anniversary. Tromsø was selected as host city since it was aligned with the government’s policy regarding Northern Norway, which was highlighted in the application for funding (Chess Tromsø 2009):

A Chess-OL in Tromsø will correspond with the government’s High North Strategy, which considers the northern territories as Norway’s most important strategic priority area the coming years.

The application used quotes from the government’s political document that illustrated the willingness to support the city. One example was a quote from the foreign secretary, in which he wrote, ‘Tromsø is the city for the big events’. The application argued how the Chess-OL could create content regarding the government’s ‘High-North strategy’:

The city will receive more attention, which can strengthen its position as a centre of growth in Northern-Norway. It will put Tromsø, Northern Norway and Norway on the map in nations where Norway usually is not exposed. It will create excess values for the tourism industry and other export industries. The event will create demand for competence-intensive industries and additional demand for knowledge-intensive labour, which the city needs. A successful hosting can attract other major international sports events, which in turn can make the city a more attractive place to reside.

The organiser succeeded in getting politicians on board. This strategy was useful not only in getting funding but also in the competition for the event. The Minister of Culture gave a speech at the FIDE congress where the host was elected, where she promised that the Norwegian government would strongly support the organiser if the Olympiad was awarded to Tromsø. The importance of this speech was mentioned by a respondent who attended the conference:

She did an excellent job for us, and her speech was very important to persuade delegates to vote on Tromsø.

A research institute calculated that the event would create 427 jobs, but these calculations assumed no crowding-out impacts. A post-event study, however, showed that the capacity utilisation without the event would have been 50% (Denstadli and Solberg 2017). This means that the chess visitors must have displaced other tourists. Consequently, the report, which assumed no crowding-out impacts, must have exaggerated the labour effects.

The organiser used Magnus Carlsen, the Norwegian world champion to promote their case. He had become very popular and participated in several meetings with representatives of the Ministry of Culture and the media. In the organiser’s evaluation report, his contribution was considered very useful.

The letter of awarding, where they were granted NOK 75 million confirmed that the strategy of connecting the event to the High-North programme and the tourism promotion paid off:

It is the unanimous decision of the Parliament that is behind the support of Chess Olympiad. The reasons for support were first and foremost linked to the government’s High-North Strategy programme and tourism reasons.

The 2017 UCI Road World Championships was a major event and attracted 700,000 spectators, whereas the number of TV viewers worldwide was estimated at 300 million. The application for funding emphasised tourism promotion of Bergen and Western Norway and also the folk festival and other promotional impacts (Bergen Municipality, Norwegian Cycling Federation and Hordaland County 2013):

It is a fantastic opportunity to promote Norway, Bergen, and the region … it will present Norway in a spectacular way and a great way that shows the very best of Norwegian nature, culture, sport, and folk festival … promoting Norwegian industries that are world-class ….promoting Norwegian culture for a worldwide audience.

Additionally, the application also emphasised other externalities (Bergen Municipality, Norwegian Cycling Federation and Hordaland County 2013):

The championship will inspire children, youngsters, and adults to use bicycles more often … it will create positive daily routines and encourage people to use bicycles more regularly instead of private cars … This will have substantial positive effects on public health, the environment, and city development, among others, by reducing pollution …

Such aims were also emphasized by a respondent from the Bergen Municipality administration:

One should not have events just to have events … It is totally uninteresting to arrange a world championship, unless we have any ripple effects, or as in the application, it is termed ‘inheritance by the world championship.

Empirical data after the championship, however, did not indicate that these aims were achieved. Post-event surveys only showed a marginal increase in people’s ‘motivations to use bicycles three weeks after the championship, and a “back-to-normal” tendency one year later’. Official registrations of cycling activities in Bergen and neighbouring municipalities did not show any increase in the first 15 months after the championship. A similar pattern was found in the National Person Travel Surveys which showed no changes in cycling activities from 2014 to 2018. (Denstadli and Solberg 2020).

The Arctic Race of Norway (ARN), which ranked fourth on the grant list, is a cycling event comprising four stages across Northern Norway. The race, which has been hosted annually since 2013, is owned (60%) by the French company Amaury Sport Organisation (ASO) and the Norwegian company, Arctic Sport AS (40%) (Accounting 2020). ASO, which is a subsidiary of the Amaury Group, media and sport group is a powerful stakeholder in the sport business. Annually, it organises 90 events in 25 countries, of which 23 are cycling races, including the Tour de France and Vuelta a España (ASO 2020).

The first application, which was submitted in 2013, emphasised the possibility of promoting the region, both among residents and to potential tourists (Arctic Race of Norway 2012):

The race can profile or develop coastal Norway as a residence and tourist destination by using a healthy Norwegian nature as the main arena … an annual event like this will invite its reuse and provide new and exciting possibilities within the cycling sport, the media market, various forms of tourism, commercial event competence, and the profiling of Norwegian industry and businesses. TV pictures of spectacular surroundings will be shown worldwide.

It also highlighted the connection to ASO, whose media agreements with 200 TV channels in 190 nations provided unique profiling possibilities, which could help the region to achieve marketing effects that otherwise would be impossible to achieve. The application copied the chess organisers’ strategy of connecting the event to the government’s High-North strategy (Arctic Race of Norway 2012):

The Arctic Race of Norway can help the government to achieve the aims in their policy for Northern Norway. The impacts from the race harmonise with the existing political ambitions. They can increase feelings of well-being and stimulate the desire to live in these areas, and in that way, create a positive development in the society.

The application was accompanied by consulting reports which measured the worth of the marketing values. The value of the 2013 race was assessed at NOK 130 million, whereas later reports doubled the respective values for the races in 2016 and 2018.

Despite the efforts, ARN had their first application rejected. However, they did not give up, and in 2015 their efforts paid off when the government decided to grant NOK 15 million annually over the next three years (Fredagsvik 2015). Subsequently, the grant was extended for another three years, starting in 2019 (Dammen 2019). The letter of awarding showed that the arguments in the application paid off:

The Arctic Race is a very significant sporting event that generates higher financial returns for the private sector than many are aware of. Furthermore, the Arctic Race has engaged both national and local politicians, the tourism industry, business players, and local sports teams in a way we did not think was possible.

An important reason for the turnaround was the success of creating connections with powerful politicians. The first one they got on board was Per Sandberg, a local politician who at that time was a Parliament member but who later became the Minister of Trade. Additionally, local politicians also lobbied on their behalf. One of them was the mayor of Tromsø, who in a media interview admitted having contributed (Olaussen 2015):

I have talked to four ministers and also the prime minister, encouraging them to support the Arctic Race. I am happy the organiser succeeded with the applications. There are many that have done a great job in this case.

The applications also included supporting statements from municipalities, regional sport federations, influential companies, and organisations representing various industries in Northern Norway. Over the years, the organiser continued cultivating close connections to politicians. The Minister of Trade visited it in 2013, and the prime minister visited in 2014, 2017 and also in 2019 when she was accompanied by the Minister of Petroleum and Energy and the Minister of Culture. The 2017 race was visited by four ministers. Indeed, some of the relations had the character of being personal relations. One indication was that the letter of awarding of government funding was handed over to the managing director at his wedding party, where Per Sandberg, the Minister of Trade was a guest (Tomassen and Eilertsen 2015).

There were also signs that political disagreements could have worked in favour of the organiser. The Minister of Culture was heavily criticised by a local politician from a rival party, who served as vice mayor in one of the host cities, for having invited himself to the first race, despite his government having rejected the first application for funding. This initiated a competition between political parties, from which ARN benefited when the application was resubmitted to the Ministry of Culture (Budalen and Skjåstad Lysvold 2013).

Minor grants

The 2017 X

The 2017 X Games which was funded with NOK 18 million, is an annual extreme sports event that is hosted at different places around the world. It is owned, hosted, and produced by ESPN, an American broadcasting company (XGames 2019). Therefore, the events receive substantial attention in the media, which in turn can promote the destinations. A precondition for the funding was that it was hosted in the village of Hafjell, not in Oslo as previously planned. Hafjell hosted most of the Alpine skiing events of the 1994 Winter Olympics. Previously, in 2015, Hafjell had been elected as the national main venue for Alpine skiing, which guaranteed a support of NOK 30 million for a period of two years.

The 2017 Homeless World Cup, which is a street soccer tournament for people who have experienced tough life circumstances, was granted NOK 15 million. This participatory event gathered approximately 500 players, including 24 women’s teams, 48 men’s teams (Homeless World Cup Foundation 2018).

The success of the Arctic Race of Norway inspired other cycling events to apply for funding. In 2016, Parliament granted NOK 5.1 million to three major international cycling events (Kulturdepartementet 2016b).

Finally, NOK 0.9 million was granted to The IBU World Biathlon Championships in Oslo for their cultural event. A similar amount was granted to The 2015 Bridge European Championship in Tromsø to support Northern Norway’s profiling and tourism.

Additional funding

All the ‘top-3ʹ events experienced financial difficulties during the preparations, which made it necessary to apply for additional funding. Lillehammer 2016 found it more difficult to recruit sponsors than expected, as the manager explained:

In the beginning everyone thought that we would get large sponsorship deals, but it did not work like that.

The application paid off, and the Ministry of Culture granted them NOK 20 million.

As for the Chess Olympiad, the reason for the financial problems was that FIDE, the International Chess Federation, announced that they would prefer applicants for the Olympiad that were also willing to host an additional tournament, which was part of the qualification for the world championship in 2013. The problems were so critical that the board leader threatened to resign unless additional funding was granted. He explained the reason for the problems:

The former board hoped to increase sponsorship, but this turned out to be impossible. We applied for an additional NOK 15 million, but the government was initially negative towards the application. We then put in effort with politicians who worked hard on lobbying the government, which they succeeded with so that we were granted NOK 12 million.

In a media interview, he used the ‘cancellation card’ to make people aware of the consequences (Haugli 2014, NTB 2014):

No money, no chess tournament … yes, that could be the result. We cannot use money that we don’t have.

The problems for the World Cycling Championship were both due to decreased revenues and cost overruns. Additional efforts related to traffic adjustments and public transport contributed to cost overruns. Without these extra efforts, it would have been impossible to host the championship.

A cancellation of the championship would have caused a severe loss of prestige for many stakeholders, not only those that were directly involved in the preparations. Such considerations were highlighted by a respondent from Bergen Municipality administration:

We reached a stage when it was impossible to cancel the event … Achieving the cycling championship was such a political victory that a U-turn was impossible … .

The organiser applied to the Ministry of Culture for an additional grant of NOK 20.8 million, of which they were given NOK 7.5 million.

Grant losers

Table 3 presents an overview of events with rejected applications from 2012 to 2018.

Table 3. Sports events with rejected funding application

Event	Amounts applied	Applicant
2022 Winter Olympics	NOK 21.7 billion grant NOK 33.7 billion financial guarantee	Oslo municipality and The Norwegian Olympic and Paralympic Committee and Confederation of Sports (NIF)
2019 Solheim Cup, Oslo	NOK 45.2 million	Norwegian Golf Federation
2015 Ironman World Championships, Haugesund	NOK 10 million (only financial guarantee)	Wen Events AS
2017 FIDE World Rapid & Blitz Championships, Stavanger	NOK 6 million	Altibox Norway Chess, Stavanger municipality
2018 FIDE World Chess Championship Match, Oslo	NOK 7 million grant NOK 9 million financial guarantee	The Norwegian Chess Federation

In January 2012, Oslo municipality and the Norwegian Olympic and Paralympic Committee and Confederation of Sports (NIF) started a process to present Oslo as a host candidate for The 2022 Winter Olympics. An application for a financial guarantee was submitted in June 2013. One year later, Oslo was given the official status of a candidate city, along with the cities of Almaty and Beijing. The plan was to submit the final application to the IOC in January 2015. National polls, however, had for a long time showed that the majority of the national population was negative, mainly due to fear of cost overruns, which had been documented in previous research (Flyvbjerg et al. 2016). Therefore, the government decided not to support the application for a financial guarantee, which resulted in the withdrawal of the financial funding application. In a media interview, the prime minister explained the reason as follows (Nordahl and Døvik 2014):

The support among the population must be big enough for us to support such a big project. It is not natural to go through with it without enthusiasm.

The Solheim cup

The Solheim cup is a major golf tournament and was planned to be hosted for 3 days in Oslo in 2019. It was expected to attract 70,000 spectators and 600 million TV viewers. The application highlighted the ‘unique marketing of Norway’, improved public health, volunteerism, and also the aim of attracting more women to golf.

Ironman 70.3

Ironman 70.3 which had been hosted in Haugesund since 2012, applied for a financial guarantee of NOK 10 million in 2015, emphasising its relevance to the county, such as the growing interests from athletes and the number of overnight stays.

Rejected applications also include two major chess tournaments. The 2017 FIDE World Rapid & Blitz Championships, which was planned to be hosted in Stavanger, was expected to attract more than 200 top world-ranked chess players. The other chess tournament was The 2018 FIDE World Championship match between the Norwegian world champion, Magnus Carlsen, and his challenger.

Discussion

The findings showed that all applicants argued that their events would create various forms of externalities to legitimise their events. However, they also showed that this does not automatically guarantee funding. Those that were most successful, the ‘top four’, also succeeded with getting powerful stakeholders, i.e. primarily influential politicians, to lobby on their behalf. In that respect, the prospect of externalities was effective to legitimize the politicians’ involvement. Additionally, support from other stakeholders such as sports federations, local public sector and industrial organisations had similar effects. This combination of power and legitimacy helped the ‘top four’ to achieve a position as a dominant stakeholder (Mitchel et al 1997). The most successful of them, Lillehammer 2016, even got the Ministry of Culture on board as the main owner of the event organisation. The advantage of this was illustrated when a consultancy company recognised that the initial budget was insufficient to cover the costs. On this occasion, they received additional funding without having to apply for it.

However, academic research has shown that events often fail to create the impacts they promise, or at least not as much as expected (Nooij de and van den Berg 2018). Although sports participation can improve public health (Downward et al. 2015), empirical research has not shown that sports events automatically increase sport participation and physical activity. Very often, the ideas seemed to be justified by intuition, anecdotes, and a political desire to establish positive outcomes (Weed et al. 2015).

Such patterns were shown in the applications as well as in empirical research of the events. The World Cycling Championship did not increase cycling activities (Denstadli and Solberg 2020). The calculated employment effects from the Chess Olympiad were exaggerated. The organiser of the Youth Olympics argued that the event would generate significant growth in the regional economy. This, despite the 1994 Winter Olympics which was a significantly larger event, only created moderate effects (Teigland 1999). The organiser of the Arctic Race presented high monetary values on the TV pictures despite that methodology used in such reports has been subject to criticism from academic researchers (Gripsrud et al. 2010).

However, optimistic statements can still convince decision-makers that the events deserve to be funded. Neither the politicians nor the bureaucrats have the competence to critically assess whether statements are correct. The organising committees for one-off events are temporary organisations that are closed down shortly after the events are finished. Consultants who predict unrealistic optimistic effects in order to convince politicians to support the events can even be hired for similar tasks by other event organisers.

These incidents refer to situations which is well known in principal-agent theory (Douma and Schreuder 2002). Those who operate as agents and are involved in the preparation of the event will not be held responsible for predicting incorrect information about the impacts. Therefore, they can predict positive effects, without having to worry about the realism.

The findings showed that the applicants can improve their chances by tailoring the expected impacts to the governments’ existing political programmes. The awarding letters showed that the organisers of the Arctic Race and the Chess Olympiad succeeded with their strategy of connecting the impacts to the aims in the government’s High North programme. Similarly, Lillehammer 2016 accepted to host competitions in venues from the 1994 Winter Olympics, an event that was funded by the Ministry of Culture. The host of the X Games used the same strategy. Hence, the funding of these events contributed to legitimise the Ministry of Culture’s funding of the 1994 Winter Olympics and their selection of Hafjell as national venue for Alpine skiing. This, further strengthened the applicants status as a dominant stakeholder (Mitchell et al. 1997)

The top-three events applied successfully for additional funding after experiencing financial problems. For the Chess Olympiad and the World Cycling Championship, the problems occurred so late that the situations had a sense of urgency. Cancellation shortly before the events were planned to start would have been devastating. Instead of the positive promotion of the destinations, the outcome could have been a severe loss of prestige, not only for the organiser but also for a number of stakeholders. Therefore, the cancellation card was effective to activate politicians to lobby on their behalf when they applied for additional funding. Without the additional funding, the events could have been cancelled, and all the efforts would have been wasted. This gave the organisers a status of being a dangerous stakeholder (Mitchell et al. 1997), which in turn made it easier to achieve additional funding.

The findings indicated that popularity of the sport and the events influenced the outcome of the applications. Although the hosting of major sports events has been documented as increasing the happiness of residents, the effects depend on the level of the popularity of the sport in the respective nation or country (Kavetsos and Szymanski 2010). This may have made it easier for politicians to support events in cycling and chess, which are considerably more popular in Norway than, for example, golf. In a national survey, Golf was not even among the top-25 popular sports in Norway (Svenning 2016). The same may have been a disadvantage for organiser of the Ironman, which neither belong to the popular sports in Norway. Additionally, the support from popular individuals can make a difference. The organiser of the Chess Olympiad, as an example, benefited from the popularity of Magnus Carlsen, the world champion who was very active in supporting their campaign.

However, the popularity of the events can also be influenced by other factors than the popularity of the sport. This was illustrated when the government ended Oslo’s plans to host the 2022 Winter Olympics. Although the Winter Olympic sports are very popular in Norway, the many incidents of cost overruns on previous Olympics created fears that the Oslo Olympics would be more expensive than planned. Therefore, the polls were negative which in turn frightened politicians from supporting the Olympic application. Politicians aiming for re-election tend to listen to their voters before deciding which activities they will support (Downs 1957).

Conclusion

The findings in this paper showed that the ‘top four’ applicants in terms of government funding succeeded with getting politicians on board to lobby on their behalf. All applicants argued their events would create positive externalities for the host region, this despite that academic research has shown that the impacts often fail to appear, a pattern that also applied to the events in this research. This, however, did not prevent politicians from supporting the organisers. In these cases, the sports that were popular domestically had the easiest time. In addition, it paid off to connect the events to existing political programmes.

Limitations and future recommendations

This study has mainly analysed the strategies of events that achieved funding, and not those that were unsuccessful. Therefore, we recommend future research also to focus those that are rejected. The data are from Norway, where the public sector has a tradition of intervening in the economy. In nations that are more market oriented, organisers may look for other financial sources. Such aspects influence to what degree the results can be generalised. Research on this issue in countries with different political- and cultural environments may therefore give different results and conclusions.

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.