Just hours after the announcement from the Victorian government that the 2026 Commonwealth Games would not be going ahead in the state, some media were already speculating that the decision would be the final nail in the coffin for the struggling sporting event.

Adam Karg is a Researcher, Academic and Consultant of Sport Management, Marketing and Innovation at Swinburne Business School and said today’s announcement will spark even more debate about the viability of the Commonwealth Games in the future, with fewer cities competing to host the games.

“That an Australian state with significant sporting infrastructure cannot deliver on the games contract will have other cities and countries assessing any future engagement,” he said.

“These difficulties are in line with a growing diversification in the number of sport events that are hosted and increasing competition for consumers. The Commonwealth Games still has a role, but may need to consider its structure – such as the number of sports, timing and scope of countries, and its hosting model – to attract future hosting bids.”

Karg said major events are and will continue to be important marketing assets for cities and countries – both for brand building and other leverage activities. With Australia and Saudi Arabia’s investments being prime examples of this.

“Annual events such as the Melbourne Grand Prix and Australian Open tennis are part of event strategies shared by city and government, with costs also shared out over multiple renditions of an event.”

He said major single sport one-off events like FIFA World Cups and Rugby World Cups need to be seen separately, given they have far larger commercial scope and opportunity, and do not come with costs needed to resource an event which requires delivery over 20 or more sports.

Australia, which is hosting FIFA and RWC events in the future already has large stadiums capable of hosting football and rugby.

“The idea of hosting and leveraging events though, as this decision shows, cannot just be at any cost – and in this case, the scope and budget needed to delivery across five regional areas was ultimately more complex and expensive that perhaps originally considered,” Karg said.

Read more about the Commonwealth Games announcement:

• Victorian govt axes Commonwealth Games 2026
• Victoria Tourism Industry Council calls for support in wake of cancelled Commonwealth Games
• Perth mayor says Western Australia should “swoop in” and host Commonwealth Games

What differentiates the Commonwealth Games from these other major upcoming events in Australia is the commercial opportunity that comes from events. The Olympics, Rugby World Cup and FIFA Women’s World Cup will generate significant commercial and ticketing revenue as well as tourism inflow and spend into the country.

He said this week’s announcement will damage the Commonwealth Games brand, but it could also bring about much needed change to the event.

And, damage won’t necessarily be limited to the sporting brand, either.

“Organisers would have looked at Victoria, Australia and the Commonwealth Games as an enviable pairing – one that both should have benefitted from. Unfortunately, this will not be the case.

“It is likely that this will do some damage to the Commonwealth Games brand, and will challenge the model of delivery for the games, and the appetite for any risk associated with the event from countries looking to host in the future.

“There may be some short term damage to Victoria and Melbourne as event hosting destination brands and by extension Australia’s reputation as a major event destination,” he said.

Should large scale events go “back to basics?”

Karg said there is already a trend of looking to reduce the overall footprint or scope of delivery for major events in global setting. Essentially trying to maximise impact via a more efficient approach.

“Victoria’s plan to distribute the stadiums infrastructure and events across regional cities was innovative, but has been difficult to deliver from a cost perspective.

“Stripping back events that don’t have large commercial revenue or inflow to a back-to-basics format certainly makes sense.

“This includes approaches to the number of sports, size of new stadium builds, ceremonies and villages, among other decisions.

Likewise, choosing and delivering in regions or cities with already established stadiums and infrastructure clearly increases event viability,” he said.

Could Brisbane face similar challenges in hosting the Olympics?

One of the major factors in the Melbourne decision not to proceed was the considerable budget blowout, and Karg says it won’t be the first or last time we will see this.

“We’ve seen many examples of stadium and venue builds and sport event delivery, as well as other forms of infrastructure spend outside of sport run well over budget.

“Certainly, Brisbane may face the same situation in terms of falling (well) over budget. However, the Olympic Games presents an event of scale and commercial opportunity well beyond that of the Commonwealth Games and presents transformational opportunities for the cite and country outside of sport.

“Importantly, should there be a budget shortfall, some revenue generated from Olympic commercial rights deals such as media and sponsorship flows down to the local organising committee and helps to increase the pool of resources for building of stadiums, infrastructure and the operational teams which deliver the event,” Karg said.