A costly and potentially damaging legal case will hang over preparations for the London Olympics after a funding row between 2012 organisers and sports chiefs headed to a Swiss court.
The British Olympic Association (BOA) said it had applied to the Court of Arbitration for Sport (CAS) in Lausanne for a “speedy, final and binding” resolution to a long-running dispute with the London Organising Committee of the Olympic Games (Locog) over its share of the financial spoils from the Games after 2012.
It is understood that the IOC and Locog will be co-defendants in the case under the terms of the host-city contract signed by the BOA, the London Mayor, then Ken Livingstone, and Jacques Rogge, the IOC president, when London was awarded the Games in July 2005. Locog became a co-signatory when it was set up three months later.
The BOA’s case is that any cash surplus from Locog’s £2 billion operational budget should be divided up before the cost of the Paralympics, a loss-making event for which Locog has already secured a £95 million public subsidy.
A marketing agreement with Locog allocates the BOA one fifth of any profit from the Games plus a bonus capped at £5 million. After the Paralympics, however, Locog is only budgeting to break even.
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The BOA believes the cost of the Paralympics is eating into the cash that it could earn from ceding the rights to the Olympic brand between 2005 and 2012. It received about £33 million in compensation from Locog, but has complained that it is not enough.
The case will take months to come to court and will be expensive, with CAS arbitrators charging SwFr350 (about £230) an hour plus expenses for their work in such disputes on top of court costs.
This state of affairs could be hugely damaging for the international reputation of British sport only 15 months before the Games as a carefully orchestrated image of harmony between the various Olympic stakeholders disintegrates in a public spat over money.
The BOA defended its move after bypassing a dispute resolution process agreed with the IOC that seemed unlikely to go in its favour. The body said that it was pursuing its CAS claim to ensure that there was a “lasting and transformational sports legacy”.
The IOC, the BOA’s higher authority in the Olympic Movement, said last night that it would adjudicate on the dispute regardless of any decision by the CAS. Locog said the discord would not affect the delivery of the Games or the preparations of athletes.