Today FIDE has finalised the bid procedure for the Candidates 2010 and World Championship Match 2011 and is pleased to announce that it has received an offer from Universal Event Promotion GmbH to organise the Candidates. (UEP make bid for Candidates 2010 and World Championship 2011; Fide.com; 6 February 2009)
The discussions lasted three months. (The slip from 'World Championship 2011' to 'World Championship 2012' occurs later in the story.)
Due to different agendas relating to organisational sovereignty and commercial rights, the parties failed to reach an agreement. Aggravating circumstances included FIDE's financial expectations beyond the original tender details. (World Championship cycle: FIDE-UEP negotiations fail; Chessbase.com; 13 May 2009)
The mention of 'different agendas' was explained in a followup article, Ilyumzhinov: 'It is not the size of the logo, it’s the principle', (Chessbase.com; 19 May 2009), and achieved credibility in certain influential circles, e.g. Logos and cigarettes, (Chessvibes.com; 21 May 2009). A few months later the London organizers popped into the picture.
The [FIDE] Executive Board in Halkidiki, Greece gave an option to London to organise the World Chess Championship in 2012. The Organizing Committee requested the option for Olympic Games year in London and they have until February 15th 2010 to exercise the option which must include the offer of a prize fund similar to that for the match between champion GM V. Anand and GM V. Topalov next April. If the option is not exercised then FIDE will open the bidding procedure. (London given option for World Championship 2012; Fide.com; 2009-10-20)
Although nothing was heard publicly of the resulting discussions, there were tensions between the negotiating parties. I reported on these in my most recent post, with an extract from FIDE's official minutes.
World Championship Match 2012. London has an option. We are facing a serious problem regarding a tax issue. Mr. Makropoulos asked approval for the Presidential Board to authorise the finalising of the details. He said that if we are not able to finalise in the next two weeks, maybe we will have to open a bidding procedure. The players who play in the candidates’ matches want to know first who will organise the final match, before they sign the contract for the candidates match. They want to know the organisers and the conditions. (2010 FIDE General Assembly : Whither the World Championship?, on events which took place from 29 September to 2 October 2010)
The 'two weeks' became two months, then stretched to four months, before the chess world learned that negotiations had failed.
Chess Promotions Ltd has been in discussions with FIDE since February 2010 regarding the staging of the WCC in London. A € 50,000 deposit was paid to FIDE to secure an option on the WCC 2012 match as negotiations commenced and finance was sought. Having secured the necessary funds, on July 21st 2010, CPL sent FIDE a formal offer and a detailed commercial contract to stage the next WCC match in London with financial terms similar to the 2010 WCC match at Sofia.
Unfortunately agreement could not be reached in the autumn. Following more discussions in London in January, CPL asked FIDE to accept the offer by Saturday 29th January 2011. No such acceptance was forthcoming. Therefore, with regret, CPL has withdrawn its offer in time for the next Executive Board meeting which starts today in Turkey in order to give the EB clarity and the opportunity to consider alternatives. The timeline to stage a WCC match before the Olympic Games in May 2012 is now too short.
Signed Malcolm Pein, CEO Chess Promotions Ltd. (London withdraws 2012 World Chess Championship Bid; Chess.co.uk/twic; 3 February 2011)
The chess world loves a good knock-down-drag-out fight, especially between FIDE and a group of influential organizers, and the main chess discussion groups weighed in quickly with blame assessment, much of it centering on the November 2010 withdrawal of GM Magnus Carlsen from the current World Championship cycle, a subject I covered at the time in Carlsen Quits (Again). Here are some representative comments, including an alternative conspiracy theory.
From London No Longer Calling; Chessninja.com; 3 February 2011; comment by rdh: The London sponsors have been very keen to cover their tracks if the Carlsen withdrawal was really important to them. In December I attended a dinner at which they spoke eloquently about their hopes to bring the WC match to London, and that was long after Carlsen had withdrawn. You can say they were just covering themselves if you like, but I'm not sure what you think they needed to cover themselves for. Given that they prefer to remain individually anonymous, it's not really clear what nefarious scheme one might suspect them of, and having seen them talk to Anand, Kramnik, etc (also present at this dinner, as was Carlsen) they don't strike me as Carlsen fanbois [fanboys] particularly. Moreover, I've known Malcolm (or "Pein", if you prefer) for 35 years and he's a straight guy [...]
London withdraws bid to organize 2012 World Championship; Chessvibes.com; 3 February 2011 KPF: Around the time of the last FIDE elections last year parallel to the Olympiad in Khanty-Mansiysk, Malcolm Pein was cited on TWIC for some harsh, personal comments on Kirsan Ilyumzhinov. I don’t remember the exact wording, but besides saying that he found Kirsan utterly unfit as president of FIDE on the background of his track record , he indirectly accused him of being responsible for politically motivated murders in his home country. He would never even contemplate to shake hands with such a man. It is clear then that now it’s simply payback time. Malcolm Pein: [KPF's] remarks about the reasons we didn’t reach agreement with FIDE are based on reasonable assumptions and some hard facts, I have certainly said some harsh things about [Ilyumzhinov] but [KPF's] conclusion is wrong. I had a note from the man himself just before the deadline but it wasn’t his signature on the contract, so that was it, offer expired. They were still keen to do the match in London but the time for talking and negotiating was over. Whatever they think about I have written, the chunky sanctioning fee and the opportunity to be running this event in the shadow of the Olympics whose recognition they desperately crave, was more than enough incentive for them. Judging from the horrified reaction, they were not expecting a withdrawal but some people mean what they say. I gave them a deadline and they didn’t meet it.
FIDE's initial reaction was guarded,
New composition of the Presidential Board discussed the enormous agenda consisting of 60 items. The most important among them is the question of holding the World Chess Championship 2012. It was decided that a separate press-release on this item will be spread the soonest. (1st Quarter FIDE Presidential Board; Fide.com; 7 February 2011)
and on the same day that Malcolm Pein issued a further statement,
London's bid for the FIDE World Championship match in 2012 has been withdrawn. Following over a year of talks and six months of negotiations, I wrote to FIDE in time for the Executive Board meeting in Turkey that concluded on Sunday to advise them that I felt fifteen months was insufficient time to organise the event properly.
The plan was to stage the match, between Vishy Anand and one of the eight Candidates, in May, just before the Olympic Games. The London bid was substantial and given the costs of staging a tournament in London compared with Sofia, the total outlay would have exceeded that of the 2010 match between Vishy Anand and Veselin Topalov which boasted a substantial prize fund. (London withdraws World Chess Championship Bid; Chess.co.uk/twic/malcolmpein; 9 February 2011)
FIDE responded to Pein (Open letter of Mr. Israel Gelfer concerning the FWCM 2012; Fide.com; 9 February 2011:)
On February 2010 FIDE granted you the option to organize the FWCM "under the same conditions like the Sofia match between Anand and Topalov". On 15 February you signed a memorandum accepting the conditions and regulations of the match and two days later paid a deposit of 50,000 Euro for such option.
After that, for a long period, you have been proposing several changes from the Sofia contract. In July 2010 (after the original deadline was extended by FIDE) you sent to FIDE a different version of the contract with different conditions. For most among this were important financial conditions which had to be clarified first. In a constructive manner FIDE, wishing to hold the match in London, accepted several conditions interalia reducing the prize fund by 20% due to UK taxes not covered by the organisers, reduction of the contribution to FIDE, reduction of the number of principals. In January we met in London when I proposed to discuss the agreement based on the Sofia contract as amended above.
In our meeting both you and Mr. Andrew Finan replied that you only consider the version dictated by you, claiming that they are no substantial differences between the two contracts. You made it very clear, as you recall, that the sponsor of the match "lost interest" in it after the withdrawal of GM Magnus Carlsen and consequently instructed you "not to negotiate at all about anything" i.e. "take it or leave it".
Even after the meeting in London I was trying to solve the problems and I informed FIDE about the situation. The FIDE Secretariat then gave me a list of 36 differences between our version and your proposed contract and 16 changes from your original July draft. Many of which were completely unacceptable to FIDE, interalia FIDE being responsible of player’s taxes in their respective jurisdictions, no liability for any cancellation for any reason and putting FIDE as responsible for several obligations which were and are not in FIDE`s hands.
Moreover, in your contract you change the regulations of the match. Furthermore you have informed us only on 27 January that the players may be liable up to 50% tax. This means that the net prize fund could be as little as near 1.2 million EUR after tax where as our agreement was that you will provide, as in Sofia, a prize fund of 2.0 million EUR after tax. Therefore your statement that the conditions were equal to Sofia was incorrect.
In order to try and solve the problems I asked for an extension of the signing date until the Presidential Bord meeting in early February. You were also invited by the FIDE President to come to Antalya so that we could try to reach an agreement. Unfortunately this proposal was rejected and you announced the withdrawal of your offer.
It is clear, and was obvious to me and expressed specifically by you, that the withdrawal of GM Carlsen from the WC cycle meant that the sponsor was no longer interested in sponsoring the match.
There is certainly much in the FIDE response that can be scrutinized -- the wisdom of accepting bids before the players have been identified, the equivalance of Sofia and London, the total cost of a match vs. its value to sponsors, the financial expectations of the players, the responsibility for taxes or tax-related advice, and the time lapses between discussions -- but Mark Crowther of TWIC (a service funded by Malcolm Pein) squashed the speculation on Carlsen along with a rap on the knuckles for having revealed details about the negotiations.
The statement itself reveals details (unverified) of the negotiations that one would expect both parties to keep confidential. Pein's press release scrupulously avoided this and was diplomatic in tone. Malcolm Pein made it clear in talking to me that if London were not interested in hosting the championships any more after the withdrawal of Carlsen from the cycle, they would not have left the offer on the table (a six figure sum) [English pounds?] for more than two months after he declared he was out. (FIDE respond to London withdrawing World Chess Championship Bid; Chess.co.uk/twic; 9 February 2011)
Another insider, FIDE Vice President Ilya Levitov, a newly appointed member of the Presidential Board and a rising star in international chess politics, offered further insight into the difficulties.
Q: On the eve of the FIDE Presidential Board meeting the organising committee of the World Championship match, which was planned for spring 2012 in London, announced that the English wouldn’t be running the match. They explained their decision was based on FIDE’s unwillingness to negotiate with them. They say that the FIDE functionaries didn’t respond to them even after they received financial guarantees in the form of a 50,000 dollar deposit. So what happened? A: I think London’s refusal was directly linked to Magnus Carlsen refusing to take part in the World Championship cycle. The sponsor of the London match, a big chess fan and a wealthy man, expressed a great desire to hold the World Championship match. But after Carlsen dropped out my deep conviction, also based on the information available to me, is that the London organisers ceased to want to run such a match. It seems they considered a direct refusal to be undignified, and therefore they decided to put forward completely unrealistic conditions.
Q: For example? A: There were more than 35 conditions. At first they promised a prize fund of 2 million euros, and then 1.6 million euros. They wanted to burden FIDE with the cost of the players’ taxes and they didn’t want to put money towards the World Championship Development Commission. In case of one of the players refusing to play they wanted themselves, and not FIDE, to take the decision about the replacement. But there are points in the regulations which FIDE can’t simply bypass. Of course, I’m not saying that FIDE’s management is ideal. I wasn’t present at the negotiations... (Levitov on the collapse of the London match Chessintranslation.com; 10 February 2011)
As for me, I don't understand why FIDE would want to justify this latest failure by another recent failure where they played a significant role: the withdrawal of Carlsen from the qualifying cycle. What I do understand is that world class chess has lost a golden opportunity for international media attention. The botched saga might not have been as dramatic as the breakdown of the 1975 Fischer - Karpov negotiations, but it has many earmarks and symptoms of the same sort of bureaucratic failure.