Norway’s Minister of Culture has ruled out a state rescue for Tromsø. chess24 brings you the latest on the financial crisis that threatens to derail the 2014 Chess Olympiad, and also looks back at how the story developed before it hit the headlines.
by Tarjei J. SvensenOn May 14th, chess24 reported that the Tromsø Chess Olympiad was apparently in danger of being cancelled. The organisers’ appeal for 15 million NOK (1.8 million EUR) in additional state support had been turned down, leaving them facing a serious money shortage just two months before the scheduled start on August 1st.
The news shocked the entire chess world, including FIDE, which published open letters critical of the President of the Norwegian Chess Federation Jøran Aulin-Jansson and the Chairman of the Tromsø 2014 Organising Committee Hans Olav Karde.
Responding to why FIDE wasn’t informed of the difficult financial situation, Aulin-Jansson commented to VG:
We didn’t quite see the purpose, as it’s a complicated picture. We could have given clearer signals earlier, but we do feel that we signaled it to them.
About FIDE asking for a guarantee, “that there is no chance that the Tromso Chess Olympiad will be cancelled”, Aulin-Jansson said:
We have a guarantee of 75 million NOK. They’ll have to make do with that for now. Then we’ll explain the whole situation to them and try to solve it in a constructive manner.
Unsurprisingly, most of the Norwegian news sites followed the story closely. In the days since chess24 published the news, there have been some interesting developments.
In another interview with VG on Thursday Norway’s Minister of Culture, Thorild Widvey (Conservative Party), commented on the situation for the first time.
She repeated her views from a Q&A session in the Norwegian Parliament in March.
It’s true they had extra costs due to the World Cup event, but it’s also the case that these costs were there when they applied for the Olympiad. This is nothing new.
They haven’t gained the sponsor revenue they anticipated. Whether that’s due to excessively high estimates or not doing a good enough job, I don’t know.
Her final comment must feel like being kicked where it really hurts:
You can’t just come and ask for more money because you haven’t been able to get it. The premise was known when they applied.
Although no doubt a disappointment, the comments can hardly have surprised the Norwegian Chess Federation President:
Aulin-Jansson: Ouch. Those were harsh words.
VG: But is Widvey right, or is she wrong?
Both. It’s correct that the costs were known to us when we sent the application, but she forgot to mention that both KrF (the Christian Democratic Party) and FrP (the Progress Party) encouraged the then Minister of Culture Anniken Huitfeldt to increase the funding when parliament considered the case. Since then we’ve been in contact with the Ministry of Culture on and off to inquire about this, but the answer has been that it isn’t possible. Then there was a change of government this autumn.
So after the election you were hopeful of getting funding anyway?
Yes. It’s also important to emphasise that we didn’t overspend. We’ve tried to save as much as possible. I think we’ve been hit pretty hard for a relatively small amount considering the amount spent on various Olympic events these days.
The President of the Norwegian Chess Federation is referring to the Lillehammer Youth Olympics 2016, a relatively unknown IOC event. It was revealed that the organisation is spending a massive 98 million NOK purely on administration. In 2011 the previous government guaranteed 232 million NOK in state support, quite a huge amount considering there are only 1000 participants. The event in Innsbruck 2012 didn’t reach Norwegian media and had no TV coverage, despite Norway winning 9 medals.
Moreover, the Minister of Culture - despite not having support from the Norwegian people - is working hard to secure a bid for the 2022 Winter Olympics. The cost is estimated to be at least 22 billion NOK. The preparation of the bid alone will cost the Kingdom of Norway 312 million NOK.
Aulin-Jansson’s final comment, when asked “if cancelling the Olympiad is still an option,” is also of interest:
I should be careful what I say, but we’re in an incredibly difficult situation. I don’t know where this ends. This is very serious. If the event actually takes place, it will be very limited.
Nordlys, Tromsø’s local newspaper, held a live web-TV interview with Hans Olav Karde on Friday. Karde, previously the CEO of one of Northern Norway’s largest banks, has been Chairman of the Tromsø 2014 board for a year. He gave an insight into the timeline and explained how they ended up in the current situation, responding to a number of questions many have been asking themselves.
Karde said that the application for 70 million in state support was sent in June 2009. The budget included was based on the estimated costs at the time.
On 30 November 2009 they were informed by FIDE that the criteria had changed to also include the FIDE World Cup. However, the application for state support had already been sent out, minus the additional 15 million that event would entail.
Nordlys: Karde, this means in November 2009 you already knew you'd receive an extra bill for 15 million NOK, but it seems as if this has come as a surprise to many just two months before the event begins?
Karde: That must be because they haven’t read the documents. Several members of the board did actually attend parliament’s processing of the application and informed them of the issue.
But shouldn’t you already have gotten a guarantee for the amount then?
Yes, we tried but we couldn’t get it. From then on we were trying to raise money via other means, but the end result, and we’ve worked pretty hard on this, is that we can’t do it.
He added that despite not raising the amount they’d hoped from commercial sponsors they did actually find a substantial amount in addition to state support:
There aren’t many events where the contribution from the state is that small in comparison to the money raised from sponsors.
Finally, Karde was asked whether he still thinks the Chess Olympiad will take place in Tromsø as planned:
At least I strongly hope so, because I think the alternative is so depressing. It will put the reputation of Tromsø as an organising city at stake and it will also damage Norway’s reputation as a host of big events. All due to a very small amount of money.
The financial situation surrounding the Tromsø 2014 Chess Olympiad was never brushed under the carpet. In fact, it’s repeatedly been covered by the Norwegian media over the last 12 months.
In a story in February 2013, Børge Robertsen, the CEO of Tromsø 2014, stated they were still 37 million NOK short of their 124 million NOK budget. But he wasn’t worried:
The Chess Olympiad is not in danger. With the financial resources we have today we’ll organise a better event than Istanbul.
Only three months later, however, Tromsø City Council did express growing concern:
A championship on the back burner won’t help to build Tromsø’s reputation.
Robertsen, on the other hand, was still not worried.
We've spent 10 million less than we budgeted for from 2009 to 2013. In addition, we've acquired a lot of knowledge of how to organise the event. We're working on a new budget for 2014, and it will likely be less than expected.
On August 17th, during the FIDE World Cup, Nordlys published a long story featuring interviews with Robertsen and Aulin-Jansson.
At that stage Robertsen was still rather positive about the status of the Olympiad preparations.
We’re adapting and not spending money we don’t have. We’ve already secured sufficient income to organise a satisfactory Chess Olympiad. I’m certain we’re going to have a complete and successful event next year, in accordance with the expectations and demands of FIDE.
We need 16 million NOK after tax. Our cash in hand next year is not a problem, so the 16 million can be from reducing the costs of goods and services. Money saved is money earned. We’ll revise our budget after the World Cup. We’ve learned a lot and it’s easier to quantify the various budget items.
Admitting they still had to work hard in order to raise 16 million NOK, Aulin-Jansson was also certain the Olympiad was in no danger:
With the funds we have today we’ll organise a successful Chess Olympiad, although it won't be as good as we expected and still plan for. If we get the 16 million in sponsorship we’ll have come a long way. We’ll be talking about the best Chess Olympiad ever.
And when the news emerged on March 19th that Tromsø had to apply for 15 million in additional state support Robertsen told NRK he was “optimistic about the government’s decision”. He also added:
What’s certain is that there will be a Chess Olympiad in August.
And if they didn’t receive the necessary amount? Robertsen said they would have “to somewhat reduce our ambitions”.
The approximately 2,000 people provided with accommodation and food may have to settle for more basic catering than we'd wish.
chess24 asked Børge Robertsen what had changed since he made those comments:
It’s a complicated financial situation and there are several factors here. For example, we have a record number of teams signed up. That's an extra overhead for us as we're paying for board and lodging, plus there's limited hotel capacity, which poses additional challenges. FIDE is now saying we can’t have the fees they had in Istanbul 2012, although we feel it’s up to the organiser to decide whether that accreditation fee should be there or not.
Based on what we now know we can’t cover the costs we have today.
Robertsen also referred to a paragraph in Norwegian stock law that says board members of a company can be held personally responsible unless they inform their owners of financial risks.
He went on:
We're not going to stop working and the planning will continue as before. There will now be more discussions in parliament at the beginning of June, but it was important for us to signal towards the Norwegian government and the owners that with the economic restrictions that exist today we can’t go through with the event. This is our obligation as responsible organisers.
chess24 also spoke to Aulin-Jansson about his comments from last August. He responded by revealing a previously unmentioned issue:
The biggest problem is that the arena expenses increased. That’s the most unpleasant surprise.
On Friday the City Council of Tromsø decided to officially apply to the Norwegian government for the remaining 15 million. Whether the government’s response will be different when the request comes from a city rather than an organisation remains unclear, but it does emphasise the seriousness of the situation.
Børge Robertsen told chess24 it was a significant step:
It’s an important signal coming from Tromsø and supported by all parties. The biggest shareholder is standing behind the application. What it means technically, I don’t know, but it’s certainly an important sign that this event is important for Tromsø and Northern Norway.
MP and Venstre (Liberal Party) Deputy Leader Ola Elvestuen told NRK that he promised to work hard to raise funds for the Chess Olympiad.
This event is important for Tromsø and Norway. The international attention will be tremendous, and when we get an event like this in the first place it’s important that we organise it to the necessary standard.
Former Minister of Education Bård Vegard Solhjell (Socialist Left Party) is a chess enthusiast who’s been a guest on VG’s chess coverage several times. His response on Twitter when asked if they were working on finding a solution was: “We’re on it”
And just in case everything else fails, Sami artist and chess player Lars M. Andreassen seems to have a brilliant idea for a fund raiser:
Translation: I've just transferred 100 NOK (12 EUR) to the Chess Olympiad. If 149,999 others do the same the Chess Olympiad can go ahead as planned!
In any case, the Tromsø Olympiad team are continuing to hold pre-Olympiad events, and joined in the fun of Norway’s Constitution Day:
P.S. Aulin-Jansson will attend a meeting of the Norwegian Ministry of Finance on Tuesday to discuss the situation. On the same day FIDE Executive Director Nigel Freeman and Vice President Israel Gelfer will arrive in Tromsø to carry out inspections. Can they help rescue the situation? Or do they have other plans? Russian Grandmaster Sergey Shipov half-joked:
Or perhaps it's not in the FIDE leadership's interests to hold the Olympiad in Tromsø?
After all, for chess players and the majority of fans it's first and foremost a vast team tournament and a huge celebration of chess. But for our officials it's above all about the FIDE Congress and the Presidential Election. And a lot depends on the place the elections are held.
Might it be the case that some reserve airfield in Russia will soon emerge? It can host the election with a greater probability of victory.
Note: Shortly after publication chess24 asked FIDE some questions related to this story, but so far without any response.
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