Olympics Blog

News about the Summer and Winter Games

« Previous Post | Olympics Blog Home | Next Post »

Hoist a cold one: $18 mill taking chill out of USOC - IOC relationship

Peter1 To paraphrase a famous utterance, the financial agreement announced Thursday between the U.S. Olympic Committee and the International is a small step in settling account ledgers and a giant leap in getting past the idea that this was more about settling accounts than reaching a reasonable solution.

The differences between the USOC and the IOC on financial issues had become so great and divisive over the past few years it seemed one side was from Mars, the other from Venus and both had chosen to emulate Ralph Kramden's threat when he got fed up with his wife, Alice, on the old ``Honeymooners'' sitcom:

"To the Moon, Alice."

The result of all the squabbling over games costs, the issue more easily taken out of play, and revenue sharing, which will remain much harder to solve, gave those of us who cover the Olympics some wonderfully vitriolic outbursts to report.

All that noise also gave Chicago's failed 2016 Summer Games bid a headache for which there was no medicine.  While it was not the prime reason Chicago lost to Rio, which was destined to win, it gave the IOC voters an easy excuse to humiliate the United States by eliminating a good Chicago bid in the first round a year ago.

So where does it all stand now, and how did the parties get there?

The war of words ended with the departure of Hein Verbruggen from the IOC and Peter Ueberroth as chairman of the USOC.

It took nearly another year for the USOC to overcome its internecine feud, which began when board member Stephanie Streeter engineered the ouster of USOC chief executive Jim Scherr. When Streeter, haplessly unfamiliar with the peculiarities of Olympic administration,  took Scherr's job on an acting basis, the USOC's constituents were so furious they tried to oust not only her but Peter Ueberroth's successor as chairman, Larry Probst, who had been looking at his post as a very part-time thing.

Streeter was forced out soon after the Chicago bid demise. Probst, both combative and chastened in reaction to the criticism, vowed to do the USOC work on a full-time basis and is keeping his word.   The USOC board then showed uncommon good sense in hiring Scott Blackmun as CEO, knowing his past involvement with the USOC would make Blackmun's learning curve a flat line.

Probst, not a natural schmoozer, set about traveling the globe to build and rebuild relationships with the IOC.  Blackmun, an attorney, set about thinking through ways to handle the legal and financial problems making those relations difficult.

Throughout the years of bitter negotiations, IOC member Gerhard Heiberg of Norway had remained a font of Nordic reasonableness. Christophe de Kepper, the Belgian who has been Jacques Rogge's chief of staff since his countryman became IOC president in 2001, also worked to calm the waters. 

The games cost issue, which involves each national Olympic committee's share of expenses related to things like doping control and sports' officials travel and lodging during an Olympics, involved relatively simple math.  The USOC asked if, say, $18 million would erase the debt. The IOC said okay. A check for that amount (I have confirmed that the $18 million number first reported by the Associated Press is in the ballpark) will be in the mail very soon.

The revenue sharing issue involves much bigger numbers, contracts in place (some until 2020) and hot-button emotions.

In deals begun more than a quarter-century ago and revised in the 1990s, the USOC receives 20 percent of the revenue from the IOC's global sponsorship program and 12.75 percent of the U.S. television rights fees.

The original rationales for those contracts?  1) U.S.-based multinationals and U.S. TV rights were providing the lion's share of IOC revenues in both areas.  2)  By agreeing to be part of the IOC global sponsorship program, the USOC had lost the ability to sell sponsorships in categories the IOC sold (soft drinks, computers, etc.).   Since the USOC is the only Olympic committee with no government funding, it needed a share of those IOC revenues to run its operations and fund strong Olympic teams.  About half the USOC quadrennial budget -- more than $200 million --comes from the shares of TV and global sponsorship.

About 2006, a groundswell of international opposition to those deals began to build, much based on one easy argument: the USOC's dollar share of IOC revenues is greater than that given to the other 200-plus national Olympic committees combined.  When non-U.S. companies became a majority of the global sponsors in recent years, that made the U.S. share seem even more galling.  (U.S. companies are a majority again.) Some IOC members wanted the USOC to demand government funding.

Ueberroth became angry over the IOC leadership's refusal to accept revised revenue-sharing deals he thought had been brokered.  He would be so infuriated by some IOC members' criticism of the USOC in 2007 and 2008 that his final public speech as USOC chairman essentially was a defiant refusal to concede a penny.

Both sides have stepped away from their hard-line positions in the past eight months.  Make that tiptoed away, so quiet have the negotiations been, with nothing more than anodyne statements about fruitful discussions and the like.  (There must be a whole orchard by now.)

The announcement of the agreement on games costs arrived in routine emails from the IOC and USOC.

Here is the content of the USOC email:

The following is a joint statement from the IOC and the U.S. Olympic Committee.

The International Olympic Committee (IOC) and the United States Olympic Committee (USOC) have reached agreement on a significant financial contribution from the USOC to resolve the Games' costs issue.

During a very productive and amicable meeting at the Youth Olympic Games in Singapore last month, the two sides also agreed to establish a process to accelerate talks on the outstanding issue of revenue sharing.

The agreement followed fruitful discussions in Denver, Colorado, last year and at the Vancouver 2010 Olympic Winter Games this February. The IOC and USOC delegations have pledged to continue working in a constructive manner and in a spirit of good faith and cooperation.

The following statement is (from) USOC Chairman Larry Probst:

I am pleased that our relationship has progressed to the point where we can begin to make significant headway on a number of issues that have been a point of contention between the USOC and the IOC.  This agreement demonstrates that when people work together constructively to develop innovative solutions to challenging problems, the future of the Olympic Movement will benefit.

The following statement is (from) USOC CEO Scott Blackmun:

I am very pleased that we can put the issue of Games' costs behind us for the time being so that we can pursue a broader discussion. That discussion will be difficult and complicated, but we will be aided by the fact that we can have a constructive dialogue, and that would not have been possible just a few months ago.

As Blackmun's statement notes, constructive dialogue would have been impossible until recently.  As Probst said, the relationship between the two sides has progressed.

Peace in our time? Or maybe just a piece of the pie so small it no longer worth was fighting over.

In either case, the games costs resolution was reached well before expected, which allows negotiations over the big piece to begin three years earlier than the starting date agreed upon a year ago.

My colleague Alan Abrahamson, who was at the Youth Olympic Games, wrote today that you could see a new spirit in the IOC-USOC relationship with the help of the spirits at the Ritz Carlton bar in Singapore.

It's still too early to uncork the Dom Perignon.

But now that cooler heads have prevailed, a cold one would taste pretty good. As soon as he gets the $18 mil, Rogge can buy.  After all, Belgium has the best beer in the world.

-- Philip Hersh

 
Post a comment
If you are under 13 years of age you may read this message board, but you may not participate.
Here are the full legal terms you agree to by using this comment form.

Comments are moderated, and will not appear until they've been approved.

If you have a TypeKey or TypePad account, please Sign In





Comments (0)

Connect

Recommended on Facebook


Advertisement

In Case You Missed It...


About the Bloggers



Categories


Archives