How the Night Of The Long Prawns shaped Sydney's Olympic bounty

On a Sunday night in March 1996, the House of Guangzhou in Sydney's Chinatown became the venue of an agreement which guaranteed the success of the Sydney Olympics and the future of the Australian Olympic Committee.

The restaurant is the favourite of Labor Party politicians and often used to broker deals, none more important than settling the rapidly escalating dispute between NSW Minister for the Olympics Michael Knight and AOC president John Coates over the power/profit sharing arrangement of the Sydney Games.

Michael Knight and John Coates at Olympic Park in 1998.Credit: Robert Pearce

After months of war by press release and media leaks, former federal sports minister and senator Graham Richardson told Coates, "You and Michael should talk" and nominated his favourite restaurant as the meeting place.

At issue was the host city legislation which tethered the NSW government to a caveat that the AOC president had veto powers over budgetary matters.

Under the legislation, the AOC was to receive 90 per cent of the Games profits (of which 80 per cent was to be allocated to a future fund) and the International Olympic Committee was to be allocated 10 per cent.

The NSW Carr government, elected the previous year, had revived threats to change the host city agreement which gave Coates a veto over expenditure: arguing the deal had been reached with the previous Fahey Government. Coates, who speaks fluent legalese, insisted everything flowed from the contracts signed at IOC headquarters in Switzerland and threatened to sue for damages.

John provoked some of the crises leading up to the meeting at the Chinese restaurant ... how much of this was planned, I'll never know.

NSW Minister for the Olympics Michael Knight

By the Sunday, relations had become hostile – particularly following Coates' claim on a TV show that morning accusing the NSW government of seeking to claw back money lost on broken tollway promises. When Coates walked into the almost empty second-floor dining room, Knight – sitting alone – opened with invective. Coates, typically, responded; Richardson was 20 minutes late, possibly by design. Yet each knew a deal was inevitable if the Games were not to become an international embarrassment.

Knight sought to achieve two objectives: remove the AOC's veto power and cut the NSW government in for a share of the profits. Coates similarly had twin aims: secure the AOC's financial future long term and establish a sports commission outside of the Sydney Organising Committee for the Olympic Games which gave him power over sports related matters. He had committed to ensuring the Sydney Olympics would be "the Athletes Games."

Graham Richardson set up the key meeting between Coates and Knight.Credit: Edwina Pickles

Knight says, "With John, the athlete is uber alles. He wanted the Games to be good but his paramount focus was the athletes. He always knew we had to buy out his veto."

The accord they reached became known as "The Knight of the Long Prawns": a title I gave it because they negotiated over Richo's favourite dish of prawn cutlets, rather than skewer each other with chopsticks. Knight pointed out the Games' anticipated profit in the bid documents was $20 million. But Coates had been to every Summer Olympics since 1976 and knew the profit at the end of a Games was far greater than the early estimate.

"John knew far more than anyone at SOCOG about Olympic Games," says Knight. "So he was negotiating with people who had about one tenth of his knowledge."

Knight argued Coates' veto power over how much was spent on the Games could paralyse SOCOG, particularly if his cost-cutting was designed to swell AOC profits as they inevitably grew towards the end of the Games. Coates argues his veto power was security against the NSW government including major infrastructure, such as a new expressway, into the Games' operating costs.

Finally, they agreed on $70 million, a $50 million increase on the $20 million bid figure, in exchange for Coates surrendering his veto over budgetary matters.

Discussion then moved to sport which, Coates pointed out, had rarely been raised at SOCOG meetings. Frustrated, he asked to establish a sports commission where the board would delegate responsibility on sports specific matters to him and consult with him on sports related matters, such as transport to venues. (It angered some that Coates retained the power to appoint the mayor of the athletes village, an honour given to Richardson.)

SOCOG, which Knight chaired after the Atlanta Olympics, took control of everything else ... ticketing, TV, catering and security.

The day following the dinner, Coates called Knight and pointed out that as the bid figure of $20 million was expressed in 1992 dollars, the $70 million should be similarly adjusted, meaning that by 2000, it would have grown. Knight says, "I saw it as a clarification, rather than a try on" but they agreed the amount announced to the media be $70 million.

He claims the Games revenue was ultimately $1 billion more than the bid figure, meaning Coates technically could have missed out on $900 million.

AOC President John Coates last month with the Sydney Games cauldron at Homebush.Credit: Getty

Coates points out the key figure was profit and, after the AOC received its cut, the Games made a loss of $120 million. He also points out he used his past Olympic experience at SOCOG meetings to point out cost savings and revenue opportunities, benefiting the NSW taxpayer. Bid documents also reveal he insisted the NSW Institute of Sport be built.

Knight believes the "Night Of The Long Prawns" was a piece of classic Coates opportunism.

"John provoked some of the crises leading up to the meeting at the Chinese restaurant, knowing the NSW government was not travelling well and it was the lead up to the Atlanta Olympics," he said. "How much of this was planned, I'll never know."

But, according to Knight, their relationship blossomed during the Atlanta Games.

"We certainly had a rocky start but what turned it around was one morning in Atlanta when the Hockeyroos were playing a preliminary match," he says. "It was sweltering hot and no one was there bar a few accredited officials. I was sitting there with John and that's when he realised I was a sports nut after all."

(Unlike Premier Bob Carr who read the book Midnight in the Garden of Good and Evil on the plane to Atlanta, explaining it was necessary background for the sailing events in Savannah).

"It was a seminal moment in our relationship. Once we got to the point where John knew we would make the Games work, he was happy to focus on the athlete. The athlete has always been No.1 with him."

By the beginning of 2000, their working relationship was such that the Games were run, as Knight says, "by a committee of two".

The AOC's eventual legacy of $88.5 million was housed in an Australian Olympic Foundation (AOF) which Coates had established in 1996. The AOF has been highly successful in delivering a return of 8 per cent per annum and, notwithstanding COVID-19, the fund is now $160 million.

Importantly, as per its objectives, it has paid $124 million to the AOC over this period to fund Olympic teams. The AOC does not receive grants from the federal or state governments – but this has not prevented politicians eyeing off its coffers.

However, any change to the distribution or Trust Deed would require a vote of 75 per cent of the guardians, all of whom are the Life Members of the AOC.

Coates, in an address to the AOC's 2018 annual general meeting, said: "To those with designs on raiding the Foundation- you are well served to look elsewhere. Put simply, our Guardians on the wall cannot be defeated by any Barbarians at the gate"