Australian state reaches deal after withdrawing as Commonwealth Games host

The Australian state of Victoria will pay a multi-million dollar settlement after pulling out of hosting the 2026 Commonwealth Games, it announced in a joint statement on Saturday.

The Victorian government has agreed to pay Aus$380 million (US243 million) to the Commonwealth Games Federation (CGF), Commonwealth Games Federation Partnerships (CGFP) and Commonwealth Games Australia (CGA), the parties said.

The state's premier Daniel Andrews announced in July that the Games would no longer go ahead due to spiralling costs.

The event typically attracts more than 4 000 athletes from the 54 nations of the Commonwealth, almost all of them former territories of the British Empire.

The 2026 version – featuring 20 sports and 26 disciplines – was due to be held across five regional hubs, including Geelong, Ballarat, Bendigo, Gippsland and Shepparton, with each having its own athletes' village.

Andrews said in July that the initial estimate of Aus$2 billion (US$1.36 billion) needed to hold the Games would more likely be around Aus$7 billion, which he called "well and truly too much".

All parties then entered "confidential good faith negotiations", according to Saturday's joint statement, with a mediation process overseen by former New Zealand judge Kit Toogood and former chief justice of the Western Australia Supreme Court Wayne Martin.

The statement added: "All parties engaged respectfully and made appropriate concessions in order to reach an agreement.

"The parties also agreed that the multi-hub regional model was more expensive to host than the traditional models."

The rest of the settlement will remain confidential, it said, adding that this "finalises all matters between the parties (and they) are legally bound not to speak further regarding the details of the settlement".