Chicago 2016’s Olympic bid money woes
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With their venue plans now having received the necessary approvals from the 26 international sports federations, Chicago 2016 bid officials now can focus entirely on the issue that will have the greatest impact on their chances to win the Summer Games.
Money.
But the thorniest part of that issue is out of their hands.
It will be up to Chicago 2016 to do two things:
1.) Convince International Olympic Committee members that it has sufficient guarantees to cover operating expenses in case of possible shortfalls in projected revenues – especially if the recession drags on.
2.) Convince the same members, who will choose the 2016 host at an Oct. 2 vote in Denmark, that it can find developers willing to build a $1-billion Olympic Village just south of downtown Chicago.
Given the financial problems that have hit village plans for both the 2010 Winter Games and 2012 Summer Games, the IOC wants as much certainty as possible from all four candidates, despite – or because of – the global recession.
Meanwhile, the U.S. Olympic Committee must resolve the hot-button financial issue, the ongoing dispute over the USOC share of global sponsorship revenues and U.S. broadcast rights.
USOC chairman Larry Probst, who took over that position from Peter Ueberroth in October, traveled this week to Lausanne, Switzerland, to introduce himself personally to IOC president Jacques Rogge and officials of several international federations that also have headquarters in Lausanne.
The revenue issue apparently was not discussed during Probst’s trip, described as a ‘meet-and-greet’ by someone familiar with its purpose.
Exactly what role Probst is playing in the interminable USOC-IOC negotiations on the matter is unclear.
Rogge said in December he had a letter from the USOC indicating that Ueberroth still is the point man in discussions with a three-man IOC committee: Gerhard Heiberg of Norway, CEO of the 1994 Lillehammer Olympics and IOC marketing commission chair; Denis Oswald of Switzerland, president of
the International Rowing Federation and the Association of Summer International Federations (ASOIF); and Mario Vazquez Rana of Mexico, president of the Association of National Olympic Committees.
The dynamic of that group is fascinating: the measured, pragmatic Heiberg between two men whom everyone will tell you don’t get along: Oswald and Vazquez Rana.
And then there is the Ueberroth factor.
The ex-USOC chairman is a person one crosses at great peril.
And Ueberroth was not pleased that, after getting handshake agreements on a solution to the problem more than a year ago, the deal fell apart when it got back to Lausanne. Sources have told me the USOC was making some concessions on the percentages in that original deal, but later negotiations have concentrated on other forms of ‘payment.’
Ueberroth was just plain angry last spring after learning that Oswald used his ASOIF pulpit to send a letter to all national Olympic bodies saying it was ‘no longer morally acceptable’ for the USOC to receive such a large percentage – 20% of broadcast rights and 12.75% of global sponsorship in an open-ended deal the IOC approved in 1996.
He was even angrier when former IOC member Hein Verbruggen of the Netherlands, whom some feel is Rogge’s stalking horse on this issue, used the word ‘immoral’ two months later to describe the USOC share. Rogge himself called it ‘not morally acceptable’ that the existing agreement also frees the USOC from paying the same share of Games costs as the other national Olympic committees.
So, in his final speech as USOC chairman last Oct. 11, Ueberroth essentially told the IOC where to get off with a barrage of numbers to answer a question he posed: ‘Who pays the bill for the world Olympic movement?’
His answer was ‘Starting in 1988, U.S. corporations have paid 60%.’
Ueberroth also indicated he was no longer going to sit back while foreign media coverage of the issue ignored those facts and painted the USOC as the bad guy. He was tired of hearing the situation oversimplified into: ‘The USOC receives more than all the other national Olympic committees combined.’
That sounded pretty intransigent.
It also may account for the occasional friction between Chicago 2016 and the USOC as they work together on the bid, since Chicago officials squirmed as the rhetoric escalated.
The words may have reflected just how fed up Ueberroth had become, but he also did not become a very wealthy and successful man by stubbornly clinging to a position simply out of ego.
He believes in doing what is best for the Olympics if it does not compromise doing what is best for the USOC, which gets about 50% of its revenues from the deals in question.
He wants Chicago to win its bid for the 2016 Olympics, in part because a U.S. Summer Games should attract increased sponsorship and TV revenues that will help all parties concerned, in part because he simply does not like to lose.
But you can bet the other 2016 finalist candidates are reminding IOC members about the revenue issues and portraying Ueberroth as an America-firster.
Of course, the latter half of that argument may have lost some oomph when then President-elect Barack Obama recorded a speech shown at last November’s annual meeting of European Olympic Committees in which he emphasized that a Chicago Olympics would be a way for the United States to ‘serve the Olympic movement. . .reach out, welcome the world to our shores and strengthen our friendships across the globe.’
Last December, Rogge said he wanted a proposal on the revenue issue to be ready for the IOC executive committee to consider at its late March meeting in Denver.
You can bet Chicago Olympic bid officials want it even more.
-- Philip Hersh
