Victoria agrees compensation deal following Commonwealth Games withdrawal

Featured image credit: Rodger Wang on Unsplash

The Australian state of Victoria has agreed to pay A$380m (£191m/€224m/$243m) in compensation following its decision to withdraw from hosting the 2026 edition of the Commonwealth Games.

The state government announced last month that it would not proceed with hosting the Games due to rising costs involved with staging the event. The government said at the time that it was “certain” that the cost of hosting the Games would exceed A$6bn – more than twice the estimated economic benefit the event would bring to the state.

The state government has now settled its disputes with the Commonwealth Games Federation (CGF), Commonwealth Games Federation Partnerships (CGFP) and Commonwealth Games Australia (CGA) regarding the cancellation of the event. The A$380m will be paid to the CGF, CGFP and CGA.

In a statement released on Friday, the CGF said that the affected parties have been involved in confidential “good faith” negotiations since the decision was made last month. The matter was referred to Mediation, and New Zealand Judge Kit Toogood was appointed as a joint mediator alongside Wayne Martin, the former Chief Justice of the Western Australia Supreme Court.

As well as the A$380m settlement, the parties agreed that the multi-hub regional model was more expensive to host than the traditional models. The CGF said that the settlement finalises all matters between the parties, and no further details regarding the settlement will be made public.

The CGF last month described Victoria’s decision to withdraw from hosting the Games as “hugely disappointing” for the Commonwealth Sport Movement, athletes and the local organising committee.

The CGF said that the A$6bn figure quoted by the Victorian government was 50% more than what was advised to the organising committee board at its meeting in June. The governing body added that these figures were attributed to price escalation primarily due to the “unique regional delivery model” that Victoria chose for the Games, and in particular related to village and venue builds, as well as transport infrastructure.

The announcement represented a huge blow to the CGF, with the future of the Games now up in the air. The CGF was also forced to switch the location of its 2022 Games from Durban to Birmingham.

Victoria was announced as the first-ever multi-location host of the Commonwealth Games back in April 2022. The Melbourne Cricket Ground (pictured) had been due to stage the opening ceremony, with venues in Geelong, Bendigo, Ballarat and Gippsland also scheduled to host events.The government has committed to delivering a A$2bn package to ensure regional Victoria still receives all the benefits that would have been facilitated by the Games. The government will also provide a new A$1bn regional housing fund and a new A$150m regional tourism and events fund.

Each of the permanent new and upgraded sporting infrastructure projects planned as part of the Games will still be completed, including a new Aquatic Centre at Armstrong Creek, a six-court indoor stadium at Waurn Ponds, an upgraded Eureka Stadium in Ballarat, a new community sporting facility at Miners Rest, upgrades to Bendigo Stadium, BMX trails in Shepparton, Gippsland Sports and Entertainment Park, Ted Summerton Reserve in Moe, and more.