A Long and Winding Road IOC/USOC Relations, Money, and the Amateur Sports Act

Stephen R. Wenn*

In November 1978, U.S. President signed Public Law 95-606, known as the Amateur Sports Act (ASA), into law. It represented the U.S. government’s legislative response to the findings of the President’s Commission of struck by Car- ter’s predecessor, President , in 1975. Declining U.S. international sport results in the Cold War era, the surging levels of success enjoyed by Soviet athletes, and others from behind the “Iron Curtain,” as well as a dismal outcome for the Olympic Committee (USOC) at the 1972 Munich Olympics where administrative bun- gles and disappointing athlete performances grabbed the headlines, pushed Ford, and eventually federal legislators, to intervene. The central purpose of the ASA was to streamline the administration of U.S. Olympic affairs, and place the USOC in a better position to administer U.S. interests as a means of effecting change to the Olympic results table (by country). Less well known, or reported, at the time, were clauses that strengthened and broadened the USOC’s exclusive rights to the use of the Olympic five- ring logo in U.S. territory. USOC officials had lobbied Congress in advance of the pas- sage of the ASA for enhanced legal protection for the USOC’s rights to the use of Olym- pic marks and emblems. It would be a number of years before USOC officials truly understood the revenue generating platform that it had also received through these changes to the ASA. In the 1980s, it employed the ASA as leverage to obtain significant shares of U.S. Olympic television revenue and money flowing from the fledgling TOP (The Olympic Program, now The Olympic Partners) global corporate sponsorship pro- gram. This paper charts the genesis of the ASA and the manner in which it steered IOC/ USOC relations concerning Olympic revenue during the IOC presidencies of (1980-2001) and (2001-2013), and demonstrates that the ASA served as a festering source of friction that damaged inter-organizational trust. Towards the close of Rogge’s presidency both sides took steps to address this issue, ultimately resulting in a means of distributing U.S. television and TOP funds acceptable to the USOC and IOC through 2040. ❖

Introduction

In October 2014, Oslo’s withdrawal from the 2022 Olympic Winter Games bid competition prompted consternation and hand wringing in Lausanne, Switzer- land where IOC officials considered the troubling reality that only two cities

* Stephen R. Wenn is with the Department of Kinesiology and Physical Education, Wilfrid Laurier University, Waterloo, ON, Canada.

Olympika XXIV (2015), 1-46 1 Wenn from the original slate of six finalists remained. Media commentary focused on a list of provocative IOC needs associated with hosting and how this might have contributed to Norwegians’ sense of unease with Oslo’s bid, the earlier decisions of Stockholm, Lviv, and Krakow to shelve their efforts, and that the two cities remaining, Almaty and , were located in countries (Kazakhstan and China) where public dissent is not prized. Cities believed the financial risk out- weighed the possible benefits. It was not a positive circumstance.1 In 2012, former United States Olympic Committee (USOC) President and the impresario of the 1984 Los Angeles Olympics, , issued a warning concerning the increasing financial burden tied to bidding for, and hosting, the . “I really hope the IOC can encourage future cities by making the requirements much simpler, by requiring less expenditure, and that the actual bid process is not so expensive,” observed Ueberroth, “it doesn’t serve anybody in the present world economy to have these Games costing the amounts they do.”2 The IOC, intoned Ueberroth, risked the less-than-robust bid- ding environment of the late 1970s when the intrusion of world geo-politics and the pall cast by ’s massive post-Olympics debt, constrained bidding interest. Oslo’s 2014 decision, which mirrored those rendered in Stockholm, Krakow, and Lviv, confirmed Ueberroth’s prescience on this issue. Judith Grant Long, a scholar who explored the bur- geoning infrastructural demands on Olympic host cities, highlighted the “IOC’s interest in recalibrating the infrastructure required of host cities, since the viabil- ity of its mission, and its political power, is predicated on [a] strong candidate pool.”3 Jacques Rogge’s successor, IOC President , was not tone deaf on this matter and understood the necessity of confronting challenges tied to the new bidding and hosting environments. Bach’s Olympic Agenda 2020 think tank exercise, and its resulting 20 + 20 recommendations, aimed, in part, at dealing with the host city conundrum. His determination fostered a number of policy decisions enacted at the IOC’s Extraordinary Session in December 2014, decisions that heralded greater succour to prospective host cities.4 The IOC also needed to make the bidding environment more welcoming to U.S. bid cities. The USOC (and U.S. cities) stood removed from the 2018, 2020, and 2022 bid processes in light of the embarrassing preliminary round defeats of (2012) and (2016), respectively, at IOC Sessions in 2005 and 2009. Tension between the IOC and the USOC over Olympic rev- enue distribution (that ensnared Chicago),5 sparked by the IOC’s European bloc’s frustration with the lack of progress in negotiations to alter the commer- cial revenue (television rights and global corporate sponsorship fees) distribu- tion formula, and the continuing leverage afforded to the USOC by the Amateur Sports Act (ASA, 1978) in these discussions, explained the USOC’s reticence.6 In the waning months of Jacques Rogge’s presidency, Rogge, IOC negotiators, and their USOC counterparts (notably Executive Director Scott

2 A Long and Winding Road

Blackmun and President ) bridged this previously intractable divide on the USOC’s share of future Olympic dollars through 2040, and the USOC moved forward with prospective bid cities for 2024. By 2024, it will have been 28 years since the U.S. hosted an Olympic Summer Games. Boston, the candidate city that prevailed recently in the 2014 American domestic bid competition, offered the IOC an opportunity to return the Games to U.S. soil, always a fruitful terrain for revenue generation. The inside track was Boston’s, but a groundswell of local opposition to the bid presented tangible concerns for the Boston bidders, the USOC, and the IOC.7 Boston withdrew from the global competition. It was replaced by Los Angeles as the USOC-backed can- didate city, after hurried discussions between Los Angeles officials and the USOC. Were the IOC to grant Los Angeles the right of hosting the 2024 Olym- pics, it would signal in the most powerful way that the two sides have realized that they really do need each other.8

The IOC, USOC, the Amateur Sports Act, and Money: A Brief Overview

In the 1970s, the U.S. government sought to resolve administrative infighting involving the USOC, the (AAU), and the National Collegiate Athletic Association (NCAA) as a means of enhancing the perfor- mance levels of future U.S. Olympic teams. The increasing dominance of ath- letes on the international stage who hailed from behind the “Iron Curtain” concerned U.S. government officials who feared for its effect on “American prestige abroad.”9 It was thought that this bureaucratic squabbling compro- mised America’s ability to compete with its arch-rival in the global sporting , the Soviet Union. The ASA established a new structure for the USOC and elevated its autonomy in the management of U.S. participation in interna- tional amateur sport. It also provided the USOC an avenue for revenue gener- ation by granting it exclusive use of Olympic marks and emblems in its domestic territory. However, years passed before the USOC realized that it possessed the combination to the vault of U.S. Olympic dollars. In 1985, the USOC secured 15% of TOP (The Olympic Program, now The Olympic Part- ners) global sponsor revenue in exchange for its consent for the inaugural set of multi-national companies to operationalize their TOP marketing platforms in the U.S.10 Later in the same year, emboldened by this financial windfall, the USOC demanded accommodation financially if television advertisers wished to continue the existing practice of employing the Olympic rings on U.S. Olympic telecasts.11 The IOC, faced with little legal recourse given that it had not previously obtained sufficient legal protection for Olympic marks and emblems, reached an accord with the USOC. The USOC, in asserting its rights

3 Wenn to permit U.S. Olympic broadcasters to sublicense the use of Olympic marks and emblems to those companies purchasing advertising time, extracted 10% of the value of future U.S. Olympic television contracts from the IOC.12 Soon thereafter, the USOC pressed for a greater share of TOP revenues and connived with federal politicians to further enhance its share of U.S-gen- erated Olympic television revenue. Again, the USOC was accommodated. The IOC granted the USOC 18.5%, and later, 20% of TOP revenue, and 12.75% of future U.S. Olympic television contracts commencing in 2004 ().13 The financial advantage enjoyed by the USOC over the world’s other National Olympic Committees (NOCs) pertaining to this revenue stream became an increasing source of irritation for many IOC members, especially those based in Europe. Juan Antonio Samaranch’s successor, Jacques Rogge, sought to amend the formula for distribution of Olympic revenue generated from TOP and the sale of U.S. Olympic television rights. The USOC, a privately funded organization, dependent upon these sources of revenue for 50% of its operat- ing budget, remained unmoved.14 Given the terms of the ASA, the USOC wielded the hammer in these discussions. However, as Rogge’s presidential tenure approached its close, he and his IOC colleagues, knowing that the IOC needed active U.S. bid cities, and the USOC, cognizant that its own efforts to generate revenue were compromised by the absence of a U.S. host city since 2002, were able to find common ground.15 This paper will examine how the Amateur Sports Act shaped IOC/USOC relations on financial matters since its passage in 1978, specifically how the USOC leveraged the ASA as a means of securing sizable shares of U.S. televi- sion contracts and revenue raised through the TOP corporate sponsorship program. The breakdown and subsequent path to improved inter-organiza- tional relations through discussions that resulted in a revised distribution for- mula for U.S. television and TOP revenue will also be explored. Primary sources, including material from the IOC and USOC archives, and secondary sources will be examined.

The Origins of the Amateur Sports Act

With the stroke of his pen, President Jimmy Carter ended a three-year investi- gative and legislative process designed to improve U.S. fortunes in Olympic competition when he signed Public Law 95-606 in November 1978. Declining U.S. Olympic performance during the Cold War contrasted with the increas- ing levels of success achieved by athletes from the Soviet Union; this circum- stance was exacerbated by numerous breakdowns in the management of U.S. participation in the 1972 Munich Olympics (where the Soviets ultimately out- stripped the U.S. Olympic team by seventeen gold medals), and triggered a

4 A Long and Winding Road reform process launched by President Gerald Ford. In 1975, he established the President’s Commission on Olympic Sports (PCOS) as a lever to address the dysfunctional administration of U.S. Olympic sport, reflected most notably by internecine squabbles between the NCAA and AAU. Ford’s initiative, con- cludes Thomas Hunt, completed the pivot from the approach favoured by his predecessors Dwight Eisenhower and John F. Kennedy, each of whom prized mass sport participation as a means of improving Americans’ fitness, to federal government praxis, hinted at under in the aftermath of the Munich debacle, dedicated to enhancing elite athlete training and Olympic medal counts.16 Nixon and Ford sought “a powerful federally chartered but privately-operated United States Olympic Committee” as the principal means of nurturing future athletic success.17 In his comprehensive analysis of the scope of the ASA, James Nafziger highlighted the administrative inertia that impeded the USOC in the execu- tion of its mandate, the NCAA’s withdrawal from the organization in 1972 (until Congress intervened to streamline its administrative structure through the ASA), the Munich failure, and the significant results of the legislative pro- cess. Central elements of the ASA included: 1) the AAU’s loss of control over eight Olympic sports; 2) the fact that an organization could serve as the National Sport Governing Body (NSGB) for only one sport; 3) the establish- ment of the USOC as the pre-eminent coordinating body related to interna- tional amateur athletic competition; 4) details on an athlete’s rights and an arbitration process; and, 5) the USOC’s assigned responsibility to develop sport programs nation-wide, with a concomitant role in fund raising.18 Inter- estingly, one of the most important elements of the ASA in relation to the USOC’s future revenue generation efforts received no attention. Nafziger, writing in the early 1980s, drew no attention to the assignment to the USOC of the exclusive rights to the use of the Olympic rings in U.S. ter- ritory. When one considers the size and scope of the USOC’s operations in 2015 (its yearly budget was approximately $200 million),19 and the funds required to support its efforts, it is likely the most historically important aspect of the ASA. The iconic Olympic logo, as a possible lever for future revenue generation, was not an element of Washington legislators’ thinking; however, they were concerned about the possible expropriation of the IOC’s property. At the time, USOC funding was discussed and debated only in the context of the amount of seed money that Congress might funnel to the USOC to launch a new era of U.S. Olympic participation geared to advancing the nation’s hopes in sporting confrontations with the Soviets and East Germans.20 Writing a decade after the passage of the ASA, PCOS Executive Director Michael Harrigan explained how the original $30 million in appropriations was later drawn down to $16 million, and that this money was only transferred ultimately to the USOC as a means to save it from bankruptcy at the time of

5 Wenn the U.S.-led boycott of the 1980 Moscow Olympics.21 The entire exercise tested Harrigan’s patience and left him to conclude that while there were individual exceptions, “Liberals don’t give a darn if the U.S. beats the Soviets but are amenable to appropriating money for Olympic sport. Conservatives, on the other hand, want to clobber the Soviets but don’t want to give Olympic sports a federal dime!”22 The decision to tweak the terms of the USOC’s control of the Olympic rings was made in response to suggestions from USOC President Robert Kane in his brief submitted to the Senate Commerce Committee in October 1977. Kane, the former Director (1944-1971) and Dean (1971-1976) of Cornell Uni- versity Athletics, did not advocate modifications as a means of furthering the USOC’s fund raising efforts, but he offered it as a way of enhancing protection against the unauthorized use of the Olympic marks and emblems. His request focused on a desire to refine certain measures (Section 9) in Public Law 805, passed by Congress in September 1950. Public Law 805 resulted in the incor- poration of the United States Olympic Association (its name changed to United States Olympic Committee in 1961) and rendered it unlawful for enti- ties other than the USOA (or those granted permission to employ them) to use the Olympic shield, the five interlocking rings, the words “Olympic” and “Olympiad,” and the motto, “Citius, Altius, Fortius.”23 A long-standing showdown between , President of the USOA, and Paul H. Helms, owner and founder of Los Angeles-based Helms Bakery, who acquired exclusive rights to the use of Olympic marks and emblems in conjunction with his company’s role as bread supplier to the 1932 Los Angeles Olympic Village,24 concluded with the passage of Public Law 805. In 1932, before U.S. Olympic officials even seriously contemplated the need to protect Olympic insignia, Helms had pursued official trademark status throughout the United States for these identifying marks. Though this application was not approved until 1938, he received permission to proceed on a provisional basis.25 In the years following the Los Angeles Olympics, Helms, who founded his company in 1931, expanded his production facilities and successfully peddled Helms Olym- pic Bread with packaging that brandished distinctive Olympic insignia.26 A sport and Olympic booster, Helms established the Helms Athletic Foundation,27 and at the USOA’s request, dispatched one of his firm’s bakers to Berlin to manage bread production for athletes representing the U.S. in the 1936 Summer Olym- pics.28 However, Helms’ commercial activities linking his company’s bread with the Olympic Movement eventually drew Brundage’s heated ire. In 1938, Brundage implored Helms to cease and desist from what he viewed as the continued exploitation of Olympic marks and emblems, but he fell silent until he renewed his campaign after World War II through proxies (and Brundage’s American Olympic confederates) such as J. Lyman Bingham and John Terry McGovern. Helms’ donation of $10,000 to the 1948 U.S. Olym-

6 A Long and Winding Road pic team, and his efforts to raise an additional $50,000 within Los Angeles’ business community did not assuage Brundage, whose disgust for the com- mercial exploitation of the Olympic Movement was well known. Despite hav- ing the stronger legal case, an aging Helms surrendered much of his position (he gave up his legal right to the use of the Olympic rings and the motto, “Citius Altius, Fortius,” but retained use of the word, “Olympic,” and a USOA mark, the Olympic shield). He pledged to take no legal action when the USOA moved forward with registering the Olympic marks. Much to Brundage’s cha- grin, Public Law 805 afforded Helms the legal right to continue these prac- tices, given he had been lawfully doing so prior to September 1950.29 Nearly three decades later, Kane sought to secure further USOC control over Olympic marks and emblems, beyond remedy sought through criminal proceedings alone. He asked the Senate Commerce Committee to grant the USOC exclusive rights to sublicense the use of Olympic marks and emblems, permission to initiate court injunctions against individuals or companies found to be making unauthorized use of those same properties, and the opportunity “to recover the funds or property obtained by anyone in violation of the statute, together with the costs and disbursements of legal action, including reasonable attorneys’ fees.”30 It does not appear that in any manner Kane requested these amendments as a means of establishing a significant, future revenue generation platform for his organization. Harrigan’s analysis supports this conclusion. The ASA, Harrigan wrote in 1989, “brought trade- mark language into conformance with current trademark law and strength- ened the USOC’s ability to enforce the protection of its names and symbols.”31 The prospect of criminal proceedings alone did not serve as a sufficient deter- rent for transgressors, but the possibility of criminal proceedings in conjunc- tion with a financial penalty motivated the USOC in its effort more effectively to protect the rings from commercial exploitation.32 Unfortunately, from an IOC perspective, Killanin and Berlioux were either unaware of the impending legislation or failed to comprehend its potential long-term ramifications. No one understood the extent of financial clout that President Carter and Con- gress gifted to the USOC when the Amateur Sports Act became law. In a few years, as the IOC surely came to realize, the two partners would have to share the fruits of the commercial windfalls.

Juan Antonio Samaranch and the IOC’s Fiscal Reality in the Early 1980s

Juan Antonio Samaranch pursued the IOC presidency with determination and purpose virtually from the time that he was co-opted by then-President Avery Brundage in 1966. He spent time on the IOC Executive Board, the launching

7 Wenn pad for any serious run at the office, and successfully sought out the position of the IOC’s Head of Protocol. This afforded him an opportunity to become acquainted more intimately with IOC members, as the particular portfolio served as the organization’s conduit for communication with the membership. He gathered vital support from Eastern Europe by securing appointment as Spain’s Ambassador to the Soviet Union in the prelude to the 1980 Moscow Olympics. A wave of Latin appointments to key leadership positions in global sport, such as those achieved by João Havelange (Fédération Internationale de Football Association) and Mario Vázquez Raña (Association of National Olympic Committees), and alliances with both individuals, served him well. The changing tides towards Latin control of the levers of power in global sport, away from its previous Anglo-Saxon axis continued within months of Sama- ranch’s own success with Primo Nebiolo’s triumph in the chase for the Presi- dency of the International Amateur Athletics Federation. Samaranch crafted a well-orchestrated campaign, one backed strongly by a kingmaker in the sport industry, Horst Dassler, head of the empire.33 But exactly what kind of chalice did he seize? Buffeted by the combined effect of world geopolitics, the Munich tragedy, Montreal’s financial debacle, and the absence of discernible enthusiasm in major cities for hosting a Summer Olympic festival given burgeoning costs, it was a troubled time for guardians of the Olympic Movement. “In 1980, the Olympic Movement was under sustained attack from political powers and was, indeed, a virtual hostage to world tensions,” concluded former IOC Vice President and Marketing Commission Chair, Richard Pound. “It was dis- united, well short of universal and had no financial resources to give it the autonomy and independence it needed to resist political pressures.”34 “Every- body was writing the Olympic obituary,” averred Michael Payne, the IOC’s for- mer Marketing Director, who worked closely with Pound in the 1980s and 1990s to reconfigure the IOC’s policies regarding revenue generation.35 The challenge ahead was daunting, and Samaranch found himself overwhelmed within days of his triumph at the IOC’s 83rd Session in Moscow in 1980. “I was depressed after the election. I felt so alone, felt that I couldn’t cope with all the demands of the job, with the sizeable problems that I knew were there and had to be handled,” confessed Samaranch. “It was a feeling that lasted maybe two weeks, during which it even crossed my mind how I might withdraw.” 36 He persevered and trained his sights on the IOC’s shaky financial foundation, one of its most pressing problems. In 1974, Samaranch’s predecessor, Lord Killanin, identified the IOC’s dependency on television rights fees for 98% of its income. This prompted him to take action towards refining the organization’s knowledge of the television industry and negotiations practices.37 His principal tool for accomplishing this goal was the IOC Television Sub-Committee, formed in 1974 as an offshoot of

8 A Long and Winding Road the Finance Commission, headed by IOC Director Monique Berlioux. By 1977, Killanin determined that the IOC should take a seat at the negotiations table with officials from Organizing Committees and television network exec- utives to protect the IOC’s interests and financial security, even though this policy was not enacted until the 1984 cycle of negotiations (and even then with minimal success). He grew weary of successive Organizing Committees in Munich, Innsbruck, Montreal, Lake Placid, and Moscow signing contracts subject to IOC approval that undermined the distribution formula for televi- sion revenue established by the IOC, thereby limiting the defined shares for the IOC, National Olympic Committees (NOCs), and International Sport Fed- erations (ISFs).38 Killanin’s initiative empowered the IOC to take a more active role in nego- tiations in the 1980s, but Samaranch knew that its dependence on television money remained both static and troubling. When he arrived in Lausanne fol- lowing the Moscow Olympics, the IOC possessed “less than $200,000 in liquidity, and just $2 million in assets.”39 Samaranch soon informed IOC mem- bers that “the financing of the IOC is a matter of some urgency.”40 He formed the Commission for the New Sources of Financing in 1982, and tasked it to explore possible avenues for the pursuit of a greater measure of financial autonomy. Horst Dassler monitored this development and pounced, in the process capitalizing on his previously nurtured relationship with Samaranch. Dassler pressed the IOC to bundle Olympic marketing rights to a select num- ber of multinational companies for all active Olympic nations through his newly formed company, International Sport and Leisure (ISL).41 Such a plan offered the companies access to these countries without the need to negotiate marketing contracts with individual NOCs. The pursuit of individual deals on the part of prospective Olympic sponsors, stated Richard Pound, marked “a convoluted and time-consuming process, inefficient to the point of being uneconomic.”42 TOP took shape, at least in a conceptual sense, received IOC approval at its New Delhi Session in 1983,43 and offered the IOC needed diver- sification of its revenue base. But, how might the NOCs view this venture given they previously controlled this form of revenue generation in their respective territories?

The USOC Exacts a Price for ISL’s Access to the U.S. Market

Of the dozen or so markets that offered significant allure to companies tar- geted by IOC and ISL officials, the U.S. was paramount. The vast majority of NOCs around the globe, specifically the vast majority without well-developed marketing programs, viewed the TOP program as “found money” and “hag- gled” for their individual shares of funds that would be channeled to the

9 Wenn

NOCs.44 While this haggling proved a time consuming and tedious process,45 resistance to the project was heightened in Great Britain and the United States, homes to well-developed marketing programs. Officials in Springs believed that the majority of sponsors signing up with TOP (correctly as his- tory reveals) would be U.S.-based, and that it denoted an encroachment on its marketing territory. Such sponsors were prospective USOC clients.46 Within 24 hours of the IOC Session’s decision in New Delhi, Muriel Cohen, Vice-Pres- ident of Spencer Marketing Services, the company responsible for the USOC’s marketing plan, registered her curiosity concerning the IOC’s plan and sought a meeting with ISL representatives.47 Without the USOC’s consent, TOP would have been still-born.48 The IOC and ISL hoped to have terms of the program finalized with all NOCs on board by the end of 1983. The USOC did not share this sense of urgency or enthusi- asm for the project. The calendar turned to 1984. When pressed by numerous phone calls and letters from ISL Deputy Managing Director, Jürgen Lenz, USOC Executive Director F. Don Miller informed ISL that further discussions would be delayed as the USOC’s attention was fully drawn to problems associ- ated with a possible Soviet boycott of the rapidly approaching Los Angeles Olympics. Meanwhile, Organizing Committees in Seoul and Calgary were sti- fled in their efforts to align their sponsorship plans with the new venture, especially with regard to the U.S. market. Frustration mounted in Lausanne, Lucerne (home to ISL), Seoul, and Calgary. A vexed Samaranch intervened, appealing to USOC President William Simon in June 1984 to engage in discus- sions. Simon had little enthusiasm for Dassler’s plan. Having been elected to suc- ceed Robert Kane as USOC President in January 1981, Simon fielded an entreaty from Dassler who was keen to put forward ISL’s marketing concept for his consideration. Simon viewed the proposal as one that would realign commercial revenue prospects among NOCs, in effect a “share the wealth” plan that would provide the preponderance of financial benefit to the smaller NOCs at the expense of the established ones. He also thought the USOC would be sacrificing rights enshrined in the ASA. Meeting with Dassler at Simon’s New Jersey home, together with Don Miller, the Adidas boss pre- sented a kickback offer of $5-10 million to him and Miller should they signal the USOC’s consent. Simon asked Dassler to leave his home.49 Simon’s disturbing initial encounter with Dassler hampered progress. Months passed before USOC officials met with ISL executives. Even then, dis- cussions offered few tangible results. ISL sought an extension from Samaranch of the revised deadline for an agreement, that is, from September 30, 1984, to March 31, 1985. Lenz and his ISL colleagues were well aware that a number of NOCs that remained on the sidelines awaited the final disposition of the USOC before they themselves offered a firm commitment. His patience tested,

10 A Long and Winding Road

Samaranch consented to the extension, demonstrating the importance he attached to diversifying the IOC’s revenue base.50 In early September 1984, the USOC pushed its negotiation envelope across the table. Don Miller indicated a willingness to execute an agreement on the USOC’s behalf in exchange for 30% of the revenue derived from the TOP program. Miller’s 15-year tenure as an USOC executive, with a dozen years (1973-1985) as Executive Director, witnessed a massive shift in the USOC’s quadrennial budget from $4 million to $88 million. “A tall, dignified man, given to plain talk and chain-smoking,” Miller was a World War II U.S. army veteran, recipient of a Bronze Star and of two Purple Hearts in the Euro- pean theatre. He had been an NCAA boxing champion at the University of Wisconsin, and he was no push-over.51 Subsequent negotiations resulted in the USOC’s share being set at 15%, with accords cementing the relationships between the USOC, ISL, Calgary, Seoul, and the IOC consummated in late May 1985.52 Interestingly, those events did not unfold on William Simon’s watch; his term ended three months earlier. His successor, , became the new guardian of the USOC’s interests. Richard Pound directed the IOC’s efforts in the final stages of negotiations, given Samaranch’s growing conviction that Monique Berlioux was overmatched in the management of the file.53 Most critically, the ASA provided the USOC with meaningful access to what swiftly emerged as an impressive revenue generation program, fuelled by the sweeping effects of globalization and the accompanying search by multina- tional corporations for global marketing platforms. Dassler’s erstwhile confi- dence in his vision proved justified.

Olympic Television Revenue and USOC Aspirations

It was a cool seven degrees Celsius in Lausanne on March 26, 1986, with inter- mittent periods of drizzle, but from a USOC perspective, it was a day of bril- liant sunshine. The USOC’s sustained campaign for a share of U.S. Olympic television revenue reached its zenith. On this day, the USOC and IOC inked the Broadcast Marketing Agreement (BMA). It channeled 10% of all U.S. Olympic television contracts to the USOC commencing in 1992. These future payments were pledged in exchange for the USOC’s consent to the use of the Olympic rings by the respective U.S. Winter and Summer Olympic broadcast- ers, as well as companies purchasing advertising time on their telecasts. Nego- tiations that culminated with the signing ceremony for the BMA coincided with the IOC’s struggle to conclude a U.S. television contract with the National Broadcasting Company (NBC) for the 1988 Seoul Olympics. At the IOC’s insistence, rather than applying the 10% deduction to Seoul’s $300 million deal with the NBC concluded on the same day, or retroactively to Calgary’s record-

11 Wenn setting $309 million contract with the American Broadcasting Corporation (ABC) reached two years earlier, the Seoul and Calgary Organizing Commit- tees and the IOC each transferred $5 million to the USOC for the same privi- leges granted to future broadcasters and advertisers. Once again, the ASA paid major dividends for the USOC. The path to such an agreement began years before, and again, Robert Kane, as he had done in the formulation of the ASA in 1978, figured promi- nently in events (though he stepped down as USOC President in 1981). Although Barney, Wenn, and Martyn detailed the IOC’s approach to these dis- cussions,54 information recently gleaned from Robert Kane’s personal papers housed at the USOC Archives in Colorado Springs assists in better under- standing the calculated manner in which he and the USOC pursued IOC con- cessions.55 The morning following Jack Kelly’s election to the office of the USOC President following the conclusion of William Simon’s term in February 1985, Kelly and Kane met for breakfast. Kane was perturbed with the flow of U.S. television dollars out of the country dating back to the Moscow Olympics. NBC committed millions of dollars to the Moscow Olympics for U.S. televi- sion rights, but the money left the country with “the performers, our U.S. ath- letes (USOC) receiving nothing,” concluded Kane. He was committed to addressing this “inequity.” He temporarily halted his efforts because the USOC shared in the massive surplus from the 1984 Los Angeles Olympics as a result of its partnership with the Los Angeles Organizing Committee. Kelly granted Kane permission to pursue 10% of the value of the U.S. television contracts. A few weeks later, Kelly, at age fifty-seven, died suddenly while jogging.56 Kane dutifully persevered. He approached ABC and NBC to plead his case for the transfer of 10% of their 1988 U.S. Olympic television contracts to the USOC.57 Predictably, the television executives considered this to be a difficult action in that “they didn’t want to interfere in a matter they would consider aberrent [sic] to their contract with the IOC.” The dogged Kane adopted an alternative approach and leaned on a long-time friend for guidance, fellow Cornell alum- nus Barber Conable, a retired member of the House of Representatives (New York’s 30 th District) who had recently concluded some twenty years of service on Capitol Hill.58 Conable, a World War II Marine Corps veteran who saw action at Iwo Jima, served as the ranking Republican member of the House Ways and Means Committee for the final eight years of his tenure in Washington.59 He steered Kane to Representatives Sam Gibbons (D-Florida) and William Frenzel (R- Minnesota), both of whom served on the House Ways and Means Committee. Kane lobbied them to consider a 10% excise tax on future U.S. television con- tracts when the Games were not staged in U.S. territory60 rationalized by the position that the U.S. Olympic team “was a commodity sent abroad for the

12 A Long and Winding Road benefit of other nations.”61 Nothing materialized from these conversations. Conable, a friend of the Chairman of the Ways and Means Committee and Washington power broker, Dan Rostenkowski, pledged to prepare the neces- sary brief for another member of the Ways and Means Committee, Michigan Republican Guy Vander Jagt, who subsequently took up the cause at the Com- mittee-level. But, progress stalled.62 USOC Executive Director George Miller, Don Miller’s successor, a former deputy Commander of Strategic Air Command and Vietnam combat pilot who assumed his USOC post in 1985,63 consulted Kane, seeking permission to deal directly with the IOC on the matter. Kane, who was never concerned with the manner in which the USOC got its 10%, gave his consent to this approach.64 In September 1985, the USOC informed the 1988 Calgary and Seoul Organizing Committees that it required compensation for “its consent for Olympic telecasts to occur in its territory using , emblems, network composite logo and general Olympic designations.” It was, in Richard Pound’s view, a “new position,” one with serious financial implica- tions for the IOC.65 Pound’s discussions with Robert Helmick and USOC law- yer Richard Kline did not shake the USOC’s resolve to pursue its path.66 The IOC’s Head of Legal Affairs, Howard Stupp, believed the IOC would have to negotiate with the USOC given the secure legal basis of its claim, but neverthe- less queried Samaranch, “why is the USOC now making the claim? Are they genuinely concerned with the well-being of their marketing program and are they trying to protect what is rightfully theirs? Or, are they just being greedy?”67 What irritated Stupp, and other IOC officials, including Samaranch, was that the USOC’s manoeuvre compounded ill feelings arising from the USOC’s refusal to share a portion of the surplus from the Los Angeles Olympic Games to offset travel costs of the participating NOCs. NOCs had delivered addi- tional athletes to compensate for the loss of competitors from the boycotting Communist bloc.68 William Simon and Don Miller used the $110 million to establish the U.S. Olympic Foundation (now, U.S. Olympic Endowment), a non-profit funding agency.69 The IOC asserted that such a surplus would have been impossible without the support of the Olympic teams that expended greater revenue in delivering more athletes to Los Angeles. Samaranch force- fully questioned USOC officials on this matter at the IOC Executive Board’s meeting in Calgary in February 1985.70 Still, Samaranch believed that Stupp’s thought on the necessity for negotiations was well considered. He tasked Rich- ard Pound to seek a resolution. “I quite understand your concern,” Samaranch wrote to Pound, “and my personal point of view is that we should try to reach an agreement with USOC before the respective postures become tougher. I believe you are the right person to propose a project of agreement for which I rely completely upon you.”71

13 Wenn

The answer to Stupp’s question concerning the timing of the USOC’s ini- tiative has to do with the lack of progress in Washington, despite the energies expended by Kane and Conable. USOC officials would have recoiled at the IOC’s charge that their efforts reflected greed. Kane informed members of Congress that the USOC was the only NOC that did not receive government funding. And, he asserted that U.S. money essentially funded the Olympic Movement, citing ABC’s purchase of U.S. television rights to Los Angeles for $225 million, with a mere $61 million paid by broadcasters in all other global television markets.72 However, slumbering legislation soon re-emerged, and Guy Vander Jagt sponsored H.R. 3770 in the House of Representatives on November 18, 1985. Ultimately, the 10% excise tax outlined in the bill was transferred to the Tax Reform Act of 1985.73 Robert Kane and George Miller concluded that the USOC’s two-pronged approach, whether by design or good fortune, shifted the leverage in negotia- tions in its favour, once the prospect for the excise tax’s inclusion in the Tax Reform Act of 1985 emerged. Kane believed that the revival of the excise tax pushed the IOC in the direction of an agreement. “We had strived unavailingly to convince [the IOC]…. to grant the USOC a 10 percent share of US TV rights fees, but it steadfastly demurred. When the Tax Reform Act of 1985 appeared ripe for passage,” wrote Kane, “blockage was suddenly and unexpect- edly released.”74 It was an interpretation shared by George Miller.75 In reality, the IOC was committed to a negotiated agreement with the USOC in late September and early October 1985, weeks before the introduc- tion of Vander Jagt’s H.R. 3770, to judge by the exchange of thoughts between Samaranch, Pound, and Stupp. It was not a matter of ‘if’ an agreement with the USOC would be pursued, given the IOC’s understanding that the USOC’s claim rested on a solid, but admittedly frustrating legal foundation, one that would be challenging for a Swiss organization to contest in a U.S. court, but rather ‘when’ and ‘how much’ should be conceded to the USOC. Yet, Pound confirmed that the prospect of the excise tax was a “relevant factor” and likely expedited an agreement. What should not be forgotten is that the USOC, too, was motivated to reach an agreement without the ultimate involvement of U.S. federal politicians. If money flowed to the USOC from Congress, perhaps the levers of Congressional control over certain elements of the USOC’s opera- tions would also be extended.76 A concern with protecting its autonomy pro- vided the USOC with excellent reasons to bargain, as well. Pound and the IOC were unwilling to accede to the USOC’s demand for 20% of the value of the U.S. television contracts for Calgary, Seoul, and beyond.77 Ultimately, he, and fellow IOC members Julian Roosevelt (U.S.) and James Worrall (Canada), who assisted in the negotiations with USOC officials, recommended to the IOC Executive Board that a 10% payment on all future contracts be settled directly with the USOC, but with the caveat that the

14 A Long and Winding Road

USOC lobby Congressional authorities to remove the excise tax from the Tax Reform Act of 1985.78 Pound and IOC officials wished to pre-empt any excise tax increases by Congress in the future. The USOC Executive Committee, at the urging of George Miller, who cited the need to foster good relations with the IOC, complied with the IOC’s terms and communicated its desire to fed- eral legislators.79 Pound’s delay in moving forward with this recommendation was tied to the nettlesome U.S. television negotiations for the Seoul Olympics. A depressed negotiating environment provided a deep blow to Seoul organizers who looked for $500 million as opposed to the $300 million coaxed out of NBC through Pound’s diligent work.80 Pound wanted to shelter Calgary and Seoul from significant financial concessions. The fact that the Seoul/NBC con- tract was signed the same day as the BMA was no coincidence. Still, in less than a year, the USOC successfully leveraged the ASA to ensure that 15% of all future TOP revenue and 10% of future U.S. Olympic television contracts would be delivered to Colorado Springs. For an organization struggling to attain a measure of financial stability in the 1970s, the USOC’s revenue gener- ation capacity received an immeasurable boost. IOC officials could rationalize these concessions in consideration of the overall growth of commercial reve- nue available with the advent of TOP and the continuing escalation in the value of television contracts, not to mention the percentage of this money emanating from U. S. corporate sources; however, if IOC officials believed that the USOC’s financial ambitions had been fulfilled, they were mistaken.

The USOC, U.S. Olympic Television Money, and Congress

Though the USOC lobbied for 30% of global TOP revenue, it eventually settled for 15%. With ensuing TOP cycles, the USOC argued, its participation necessi- tated the transfer to Colorado Springs of an enhanced percentage of the gener- ated revenue. While IOC/USOC discussions on these matters were not tension- free, and the USOC’s share grew to 18.5% and then topped out at 20% of total TOP revenues directed to all NOCs, the IOC understood that without the USOC’s participation, the TOP program, and the money that it produced for the world’s other NOCs, would not exist.81 TOP deliberations aside, the USOC’s share of U.S. television revenue prompted a far more contentious discussion. USOC officials pressed for 20% of U.S. television contracts in 1989 and 1990, but the IOC, represented by Richard Pound, turned aside these entreat- ies. A strong signal that Congress might take renewed interest in the subject emerged when the Brookings Institution published an article focusing on the disparity in money paid by U.S. broadcasters, and those in other regions, espe- cially heavily populated Western Europe.82 For instance, the 1988 Calgary

15 Wenn negotiations for U.S. television rights, managed by Richard Pound and Barry Frank, proved wildly successful through the utilization of a sealed bid process to secure ABC’s eye-popping $309 million offer. However, Juan Antonio Samaranch, committed to blanket television coverage in Europe, was unwill- ing to explore the possibilities offered by emerging private television compa- nies in the region.83 He did not transfer control of European negotiations to Pound, who he knew would introduce such rival bidders to the process as a means of lessening this disparity that angered USOC officials and U.S. televi- sion executives. Samaranch retained control over European negotiations along with Marc Hodler, a member of the IOC Executive Board. EBU acquired the Western European rights to the 1988 Calgary Olympics for $5.7 million.84 A well-rehearsed approach played out in EBU’s discussions with Hodler and Samaranch. The EBU argued that it operated as a public broadcaster solely on money provided by federal governments within its territory, and therefore did not have the revenue resources available to U.S. networks through paid advertising. EBU’s head of sports programming, Richard Bunn, matter-of- factly informed Robert Lawrence and Jeffrey Pellegrom (authors of the afore- mentioned Brookings Institution article entitled, “Fool’s Gold: How America Pays to Lose in the Olympics”) that “unlike the Americans, we don’t bid for the rights to the games; we negotiate.”85 CBS shelled out $243 million for U.S. rights to the 1992 Albertville Games, while EBU paid a mere $18 million. The USOC denied any involvement in the production of Lawrence and Pellegrom’s article, but Lausanne officials were suspicious.86 Within the IOC’s Executive Board chambers, a concerned Pound lamented EBU’s “sweetheart deals.”87 Before the close of 1989, additional U.S. and Western European Olympic con- tracts further eroded his ability to deal with the USOC. What is more, the con- tracts provided additional cause for Congress, with prodding from the USOC and U.S. television executives, to take action.88 However, as the contest to stage the 1996 Summer Olympics entered its late stages in 1990, the USOC pulled back from applying further pressure on the IOC. Officials in Lausanne realized that the USOC did not wish to poison the atmosphere with financial demands while ’s bid was under consid- eration.89 Within a month of the IOC’s decision to award Atlanta the right to host the Centennial Games in September, 1990, the effects of lobbying on Cap- itol Hill by executives from the U.S television industry and the USOC burst forth in the House of Representatives in the form of the Olympic Television Broadcast Act, sponsored by Tom McMillen (D-Maryland), a former Olym- pian in basketball. From an IOC perspective, three troubling elements formed the founda- tion for the McMillen Bill: 1) U.S. television broadcasters could not interrupt live coverage of an Olympic event with a commercial; 2) The responsibility for negotiating U.S. Olympic television contracts would be transferred from the

16 A Long and Winding Road

IOC to the USOC; and 3) U.S. television networks would be granted an exemption from the Sherman Anti-trust Act, thereby permitting them to sub- mit a pooled bid. Pound sounded the alarm bells in a memo to Samaranch fol- lowing a trip to Washington for a face-to-face meeting with McMillen in January 1991.90 Any limitations on advertising would most certainly cast a pall over offers from U.S. television networks because of the restraint placed on their ability to recoup their rights fee from the sale of commercial time. Sec- ondly, if the USOC controlled negotiations, it could set its percentage share of the contract, and it surely would be greater than 10%. Finally, a pooled bid from the U.S. networks, effectively one absent of a competitive process, would surely have a deleterious effect on the amount of money flowing from the U.S. market.91 Pound was a realist. He understood that the McMillen Bill resulted from Samaranch’s unwillingness to tackle the alarming disparity between sums paid by the U.S. networks and those in other television markets. “If the networks are really involved in this,” wrote Pound in reference to the call for an exemp- tion to the Sherman Anti-trust Act, “then our problem will be exacerbated [and] until we show that other parts of the world are approaching U.S. levels on a per capita or other appropriate measure, we can expect little sympathy from within the U.S.”92 McMillen argued that the U.S., in any number of global ventures, includ- ing military actions such as the one pending in the Middle East (to dislodge Saddam Hussein’s forces from Kuwait), shouldered a disproportionate finan- cial load. His bill, he believed, would have a trickle-down effect for U.S. con- sumers in that prices charged for products by those companies who were required to pay immense sums for advertising time on Olympic telecasts (in light of the needs of the broadcasters paying large rights fees) would be con- strained. Pound framed his hour-long session with McMillen as “cordial” and “worthwhile.” Discussion of these matters with McMillen “without the filter of the USOC” proved useful, he recounted. Pound appraised McMillen of the USOC’s current share of Olympic commercial revenue and its unique position in this regard compared to the world’s other NOCs. Pound floated the possible negative reaction of IOC members resulting from his bill as they prepared to vote on the host city for the 1998 Olympic Winter Games, specifically in regard to ’s candidacy. Reflecting later, Pound mused, might it be time to hire someone to monitor developments in Washington with an eye to providing advice as to how best to protect the IOC’s interests? The exercise, asserted Pound, demonstrated that “our interests at this time are not/not the same as those of the USOC.”93 At the IOC Executive Board meetings in April and June 1991, USOC Pres- ident (and IOC Executive Board member) Robert Helmick94 offered a concil- iatory tone in his remarks concerning the U.S. television market and the

17 Wenn

McMillen Bill. Helmick and Pound agreed on one thing. The sums demanded from the U.S. market stood in stark contrast to those in Europe, and this real- ity played a significant role in fostering McMillen’s initiative. Helmick believed that changes in the European television market would have a corrective effect on this disparity in the future. However, his statement that “it was always a concern to everyone within the Olympic Movement when a government tried to intervene in sport in any way,”95 belied the USOC’s contribution to the craft- ing of the bill, confirmed by McMillen in his meeting with Pound in January. To Pound’s suggestion that the IOC employ a lobbyist in Washington to safe- guard the IOC’s interests, Helmick was resolute: “To seek separate representa- tion in order to attempt to lobby against this bill,” stated Helmick, “would produce very negative effects, as it would in any country if an international organization attempted to become involved in internal politics without calling upon the cooperation of the domestic organization.” Helmick concluded that “it was the USOC’s considered judgement that this could be controlled.”96 His comments reflected that the USOC had perhaps, albeit late in the process, grasped just how much the McMillen Bill would have suppressed the value of U.S. Olympic television rights, and ultimately its own percentage of proceeds. The McMillen Bill disappeared from Washington’s legislative agenda in 1991. This favourable development for the IOC was linked with the results of the IOC’s negotiations with EBU for the European rights to Atlanta’s Centen- nial Games. The key development that pushed EBU to pay $250 million for these rights to the 1996 Olympics was the competing $300 million offer from Universum Film AG (UFA), a German private television network.97 The IOC moved beyond jointly negotiating contracts with the OCOGs in the wake of the Seoul Olympics, although host city representatives retained an advisory capacity. Atlanta, for obvious reasons, desired maximum revenue from television rights. At the IOC Executive Board meeting in September 1991, Pound sensed his boss’s lack of resolve in exploiting the new negotiating environment in Europe when Samaranch opined that perhaps the $90 million paid by EBU for the 1992 Barcelona Games might be improved.98 Samaranch extolled EBU’s past production efforts and its ability to guarantee blanket cov- erage in Europe. He “did not think the IOC should be influenced by OCOGs and abandon EBU for private networks which would not cover the Games properly.”99 Pound hammered home his central argument, primarily for Sama- ranch’s benefit: “The IOC could no longer have all its eggs in one basket and depend almost entirely on U.S. rights. It was also not right for the U.S. to pay a disproportionate price for the rights. The IOC had to broaden its base.” The IOC’s past approach, voiced Pound, lay at the root of its troubles with the USOC concerning television money. “The USA knew that the IOC had taken advantage of it,” and the McMillen Bill had been but one result. “The worlds of television and business had changed,” continued Pound, “everything had

18 A Long and Winding Road changed, except for the IOC, which was still selling TV rights as in the 1960s.”100 Marc Hodler was more hopeful. He believed blanket coverage and addi- tional revenue were possible.101 The $250 million contract reached with EBU within a few weeks provided noticeable relief for Pound, who long campaigned for a different approach in negotiations,102 and a financial boost for Atlanta organizers. Samaranch and Hodler could no longer shelter EBU as the emer- gence of private networks in Europe altered the telecommunications land- scape. OCOGs were unwilling to suffer the loss of revenue from not pressing EBU to pay a fee at least close to market value, irrespective of its proven track record in televising the Games, a card that Samaranch often played. Hodler crossed the Rubicon. Samaranch required additional coaxing.

Long-Term U.S. Television Contracts Cause More IOC/USOC Fireworks

In describing his attitude to life and work, former President of NBC Sports, Dick Ebersol, commented, “I like to win, I like to have fun, and I don’t like to wear a coat and tie.” Sports Illustrated’s Sally Jenkins argued that this approach had been central to Ebersol’s success in marshalling internal support at NBC to pursue, and later in furtive discussions with Juan Antonio Samaranch and Richard Pound to secure, U.S. Olympic television rights for five Olympic festivals at a cost of $3.5 billion in 1995.103 For the IOC, the financial security was simply too appealing, and in addition, future bid committees could more effectively struc- ture their proposals if they understood the extent of available revenue from the U.S. television market. While the contracts for the Sydney and Salt Lake City fes- tivals ($1.2 billion) and the 2004, 2006, and 2008 Games ($2.3 billion) were not the first multi-festival television agreements negotiated by the IOC, they were employed as templates for multiple agreements reached in 1996 and 1997 with other global broadcasters. They firmly established NBC’s ascendance to the sta- tus of America’s Olympic network, a mantle it had sought in connection with its coverage of the Seoul, Barcelona, and Atlanta Olympics.104 Though cigars were lit in Lausanne and NBC’s New York headquarters, the IOC’s decision bothered CBS, ABC, and Fox executives who had been shut out of the discussions, and angered USOC leaders, who correctly understood that part of Pound’s motivation for going forward with the NBC project was his knowledge that the deals locked the USOC into 10% of $3.5 billion.105 In 1992, USOC Executive Director Harvey Schiller renewed the call for addi- tional U.S. Olympic television money, but his tense discussions with Pound, who thought it possible to move the USOC’s share to 15% by 2004, while briefly promising, yielded nothing.106 His successor, Dick Schultz, lobbied the

19 Wenn

IOC for 20%, as had been the USOC’s position when it invoked the ASA in September 1985.107 Pound, entrusted by Samaranch to manage the IOC’s inter- ests in its discussions with the USOC on financial matters, grew increasingly frustrated with those who badgered him. Ebersol’s vision happily coincided with Pound’s efforts to stem the USOC’s financial ambitions. Once again, the USOC turned to Capitol Hill for leverage in discussions concerning its future share of U.S. Olympic television revenue. When the 1996 Olympics opened on the evening of July 19th, weather con- ditions (33 degrees Celsius with 44% humidity) brought a measure of discom- fort to the 83,000 spectators in Atlanta’s Centennial Olympic Stadium.108 Despite the sweltering heat, what should have been a glorious affair for USOC Executive Director Dick Schultz, took an embarrassing turn. Already irked by the USOC’s refusal to approve the second contract with NBC in the absence of a shift in its percentage share, Pound confronted Schultz beneath the stadium, his interest piqued by ongoing consideration of a bill in the U.S. Senate that would have granted the USOC veto rights over any U.S. Olympic television contract.109 Pound recalled that “[w]e went bananas,” when informed of the surreptitious manner in which the USOC tried to advance this legislation under the cover of the Atlanta Olympics. Samaranch, Pound, and IOC Direc- tor General François Carrard queried Schultz on what he knew of the bill.110 Schultz denied any awareness of the matter.111 Pound pulled from his back pocket a copy of Schultz’s own briefing notes for the USOC’s lobbyists con- cerning the bill and his organization’s needs.112 Schultz’s strategy to approach Washington legislators in clandestine fash- ion while conducting discussions on this matter directly with Samaranch, miffed the IOC President, especially after having signalled his willingness to elevate the USOC’s share to 15%. It was one thing for Schultz to go around Pound’s back to discuss the issue with Samaranch, but an entirely different matter for Schultz to go around Samaranch to Congress. Samaranch assumed a direct role in the talks with Schultz as he sought resolution to the matter; he was more amenable to accommodating the USOC than Pound.113 Samaranch advised Schultz to remove the pertinent clauses from the Senate bill.114 When tempers cooled somewhat, the IOC and USOC leadership teams resolved to meet in Lausanne in October 1996 to thrash out their differences.115 There, Schultz learned that Samaranch’s mood had improved, at least somewhat. Samaranch and François Carrard collaborated on the IOC President’s opening remarks for the meeting with Schultz, USOC President Leroy Walker, Deputy Secretary General John Krimsky and Director of International Rela- tions Alfredo LaMont. Pound, Carrard, Payne, and Executive Board members, Thomas Bach, Kevan Gosper, and Anita DeFrantz accompanied Samaranch. “The Olympic Movement,” Samaranch stated bluntly, “is a club, with a set of rules. Being a member was not compulsory, but members had to abide by the

20 A Long and Winding Road rules.” Clearly, the U.S. market was important to the IOC, observed Sama- ranch, as it supplied more than 50% of the television revenue and was home to nine TOP sponsors (of the current 10). However, the USOC “could either be in the club or out of it.” Still, Samaranch’s spine, stiffened sufficiently by the USOC’s decision to engage federal politicians, dismissed the thought of ceding 15% to the USOC. Having wielded the stick, Samaranch offered the carrot. The IOC had previously determined that commencing in 2004, the Olympic Movement would receive 51% of global television revenue (an increase from its previously enjoyed 40%). Thus, Samaranch proposed, following Pound’s suggestion, that the USOC, IOC, ISFs and NOCs receive 12.75% each with the remaining 49% transferable to the OCOG. The USOC was content with 12.75%. It was a relief for the USOC, reported Anita DeFrantz (who, as an IOC Executive Board member, also had a seat on the USOC Executive Committee), who feared that, “the IOC was going to force them to sign something they did not want.”116 The two sides signed a memorandum of agreement on this and a number of other financial and marketing matters. As well, they agreed to engage in follow-up discussions in Cancún, Mexico in November. Within three months, the progress achieved in Lausanne and Cancún unravelled. When the USOC shipped the revised Broadcast Marketing Agree- ment to IOC officials, a perplexed Richard Pound wondered whether the two negotiating teams had attended the same meetings. Pound concluded that the Agreement represented an “an outrageous attempt… to obtain everything and more than [the USOC] would have obtained had it been successful in sneaking through the amendments to the Amateur Sports Act during the Atlanta Olym- pics.”117 He informed Samaranch that he met with a USOC lawyer in early Feb- ruary who indicated that the expanded memorandum of agreement Samaranch signed in Cancún “gave the USOC control of the whole television agreement for US television, not just the protection of the Olympic marks in the US.” Pound was flummoxed. “This is so clearly wrong and so far from what we actually agreed,” Pound reminded Samaranch that, “you must ask yourself if the USOC leadership is dealing with you and the IOC in good faith.”118 Samaranch’s continued willingness to engage Schultz in direct discussions concerned Pound as the practice undercut his, as well as the IOC staff’s, author- ity. On TOP matters, Pound was similarly disconcerted. An apology Samaranch issued to John Krimsky for Pound’s tough bargaining, about which Krimsky boasted in front of IOC negotiators, was “not good for team morale.” The tenor and tone of this portion of Pound’s memo was as close to an upbraiding of a superior as one might imagine. “The USOC does not want any IOC presence in the US… it wants the entire market left to the exclusive control of the USOC. I have well over a decade of experience in dealing with the USOC on commercial matters,” Pound reminded Samaranch, “and I assure you that this is the objective it has in mind and which it pursues relentlessly.”119 Personal attacks by USOC

21 Wenn officials on Michael Payne and Howard Stupp, and others that aided him in negotiations, must cease, declared Pound. “Mutual respect” was required and the USOC needed to extend this respect to “those who negotiate just as hard as the USOC and who expect us to negotiate firmly and fairly in our own interests.” Pound concluded: “All I suggest is that, by having the USOC go around the established structure of negotiations every time the IOC representatives do not agree with a negotiating position adopted by the USOC, our ability to defend our interests on a day-to-day basis risks being compromised.”120 Pound coun- selled Samaranch to withhold his signature from the IOC/NBC long term televi- sion deals until the revised BMA was acceptable. Eventually, both sides resolved issues and pressed forward with the NBC contracts.

NBC and General Electric Smash Competitors for the 2010 and 2012 U.S. Television Rights

Juan Antonio Samaranch set out a vision for revenue generation as IOC Presi- dent, and his right hand, Richard Pound, along with Michael Payne, did the spadework in enacting it. One of Jacques Rogge’s challenges in the wake of his successful campaign for the IOC presidency was to determine the IOC’s approach to television contracts post-Beijing, as most markets had contractual terms settled through 2008. He understood the need to instill the IOC with new knowledge concerning the television industry and its future, and he tasked this responsibility to the IOC Television Rights Commission, a new body that he himself chaired. The Commission invested considerable time querying television and media executives about the status of the industry, while also building a sense of trust with all U.S. television networks that the next U.S contract (for 2010 and 2012) would be subject to a bidding process without the possibility of pre-emptive bids (such as those employed by NBC). In the U.S. market, Payne observed, “some fences needed to be mended” with NBC’s competitors. 121 Pound’s previous role as chief negotiator for the IOC in the U.S. market (he stepped down following his loss to Rogge in the presidential election in order to afford the new President an opportunity to set his own path concerning television negotiations) was assumed by Richard Carrión, a Puerto Rican banker and IOC member, with assistance from Neal Pilson, a former President of CBS Sports.122 The IOC invited five bidders, ABC, NBC, CBS, Fox, and AOL Time Warner, to participate. The IOC mandated that all parties sign the final television rights con- tract, a document some 100 pages in length, in advance of two days of negotiations commencing on June 5, 2003. The five companies assigned their respective legal departments to examine the contracts. AOL Time Warner and CBS backed out of the negotiations process, leaving the way clear for ABC, Fox, and NBC. The

22 A Long and Winding Road

USOC, an exceedingly interested observer of the process given its 12.75% share of the proceeds, was concerned about the diminishing pool of bidders and appealed to the IOC to delay the negotiations, but the IOC forged ahead. 123 Though prevented from tabling a pre-emptive bid, Dick Ebersol came to Lausanne with a novel plan. Not only did NBC bid $2 billion for U.S. television rights, but its parent company, General Electric (GE), also wished to join the TOP sponsor community through 2012 with an additional $200 million on the table. NBC, concluded Payne, “pulled out all the stops,” determined to take the mystery out of Rupert Murdoch’s and Fox’s approach.124 The bids were sealed in envelopes and deposited in a transparent vessel with all bidders present. Following a lunch break, Carrión and his colleagues retreated to the negotiations room, while the television network executives retired to their hotel rooms, or in the case of Fox, a nearby casino. Elation was tempered by reality when Carrión read aloud the terms of NBC’s proposal to Rogge and the members of the IOC negotiating team. The massive windfall offered by NBC’s (and GE’s) approach necessitated rapid consideration of the manner in which GE could be welcomed into the TOP sponsor group in light of its wide ranging product list, which raised the possibility of overlap with other existing sponsor categories. And, how might the USOC respond? Understanding the need for dialogue, Ebersol brought Mark Lewis, Salt Lake City 2002’s Marketing Director, to Lausanne in an advisory role. Daylight dimmed as Lewis and Payne began to deal with the big issues.125 But the USOC balked. Without anyone with sponsorship expertise present in its Lausanne delegation—after all, these were to have been television rights negotiations—Jeff Benz, a lawyer who accompanied Jim Scherr, the acting USOC Executive Director, said that the process was moving too fast; the USOC would consider the proposal in Colorado Springs rather than Laus- anne. The financial aspects of NBC’s proposal, however, were far too enticing for the IOC to afford the USOC such an extended period of deliberation. Heated words ensued. How could the USOC turn its back on an agreement that would see it receive $250 million, approximately 70% of its quadrennial budget? If the USOC blocked the agreement, Payne railed, it would be invited to a press conference with the IOC the following day to explain the reasons for the breakdown in discussions. The USOC relented. NBC’s “shock and awe” strategy won the day.126

European IOC Members Chafe at the Financial Impact of the ASA

In June 2009, when asked to handicap the race for the right to host the 2016 Summer Olympics, IOC member Ottavio Cinquanta () commented, “To me, Chicago is the favorite.” For Cinquanta, it was time for the Olympics to

23 Wenn return to the U.S. “Why? The dossier is excellent and, for me, yet again, it is a matter of the U.S. contribution to sport. The U.S. has given (the world) ath- letes, organization, television and innovation in competition. The candida- tures are from cities,” observed Cinquanta, “but the cities are in countries, and what Chicago’s country has done for sport in general over the years is very important.”127 But, Cinquanta, as future events revealed, did not present an opinion shared by the vast majority of his colleagues. Chicago was summarily dismissed on the first ballot at the IOC’s Session later in the year.128 rode the “It’s South America’s time” message to victory. Cinquanta’s view did not reflect the depth of resentment harboured by European IOC members at the lack of resolution to a four-year long discussion between IOC and USOC officials designed to reallocate a measure of television and TOP sponsor dollars from Colorado Springs to the world’s other NOCs and the ISFs. Chicago’s demise cannot be explained wholly by anti-USOC sentiment within the IOC’s membership, as such an interpretation unfairly overlooks the effectiveness of the well-crafted bid offered by Rio and the energy of its bid team, and also downplays Jacques Rogge’s desire to expand the Olympic brand to a new continent. Yet it is clear that Chicago was caught in the crossfire between USOC officials committed to preserving the USOC’s level of access to U.S. tele- vision and global corporate sponsor dollars and IOC members no longer willing to accept the status quo. In addition, the USOC angered the IOC by advancing its plans for a U.S. Olympic television network mere months prior to the 2016 host city vote, and before those matters of concern had been resolved with its long-term U.S. television partner, NBC.129 The badly frayed state of IOC/USOC relations was a significant factor. Denis Oswald, a Swiss IOC member, minced no words when he concluded that Chicago’s fall was “a defeat for the USOC, not Chicago.”130 The antipathy between the two organizations left a disappointed Chicago 2016 Bid Commit- tee Chair, Patrick Ryan, to liken the two sides to the Hatfields and McCoys.131 In 2008, after three years of fruitless negotiations, Denis Oswald and , two of the three IOC members (the third being IOC Marketing Commission Chair, Gerhard Heiberg) tasked by Jacques Rogge to devise a dif- ferent distribution formula with USOC officials, went public with their frus- trations. Peter Ueberroth, the USOC’s President, was not inclined to cede money to the IOC at the expense of the USOC, preferring various plans to grow the revenue pot before percentages shifted such that the bottom line dol- lars to the USOC did not diminish.132 The BMA and the USOC’s share of TOP sponsor dollars “was no longer morally acceptable,” decried Oswald.133 Ver- bruggen’s rhetoric echoed Oswald’s. When compared to the globally generated commercial revenue flowing to other members of the Olympic family, he charged that the USOC received “an immoral amount of money.”134

24 A Long and Winding Road

Verbruggen and Oswald accused the USOC of “foot dragging” through- out the negotiations. With the Asian and European markets now providing sizable sums of television money, and five of the nine TOP sponsors incor- porated beyond U.S. borders, the USOC’s argument that America funded the Olympic Movement, was far less valid than had been the case previously. It had been a significant consideration in the 1980s when the BMA was estab- lished and TOP evolved. Ueberroth countered that U.S. companies still pro- vided the Olympic Movement with 60% of its revenue base. For his part, Ueberroth expressed frustration that the USOC believed it had reached agreement with Heiberg’s team on a number of occasions only to have the settlement overturned in Lausanne. Discussions ground to a halt following Ueberroth’s departure as USOC President. Both sides thought a cooling off period was advisable; however, the USOC pledged to re-visit the discussions in 2013 (such that a settlement would come into effect for the 2020 Olym- pics).135 While the USOC could walk away from discussions content that it had, for the time being, protected its financial interests during challenging economic times, the IOC extracted assurance from the USOC that it would pursue a new distribution formula, with purpose, in 2013. The USOC’s posi- tion was based on the calculation that in the absence of an agreement with the IOC, no U.S. city had a reasonable chance for success in an Olympic host city competition. No U.S. cities were promoted in connection with the 2018, 2020, and 2022 bid contests.

Larry Probst and Scott Blackmun Bring Stability to the USOC’s Leadership Ranks

A formidable barrier the promotion of improved relations between the USOC and the IOC in the post-Sydney era was the turnstile controlling the USOC’s managerial suite in Colorado Springs. In the nine years leading up to the October 2009 Copenhagen Session, the USOC had six full-time or acting Executive Directors. Between 2000 and 2004, the USOC had four full-time or acting Presidents (William Hybl, Sandra Baldwin, Marty Mankamyer, and Bill Martin). Former President and CEO of John Hancock (a TOP sponsor com- pany from 1993 through 2008), David D’Alessandro, noted that “I’ve had din- ners that lasted longer than some of the management in Colorado Springs.”136 Probst, who succeeded Peter Ueberroth as USOC President in 2008, while crit- icized roundly for Chicago’s loss and the perceived anchor to the bid that the USOC’s strained relations with the IOC provided, survived the affair, and in January 2010 brought Scott Blackmun, a lawyer and former USOC acting Executive Director (November 2000-October 2001), into the Colorado Springs leadership circles. It proved an astute move. Blackmun, the new Exec-

25 Wenn utive Director, set the needed tenor at his inaugural press conference: “At the end of the day,” he observed, “the IOC is the leader of the worldwide Olympic Movement, and we need to respect that, and we need to spend some time lis- tening.”137 It was a departure in both tactic and tone from Blackmun’s predecessors who had sparred with IOC officials, leaving Michael Payne to conclude five years earlier: “The battle over revenues… [soured] relationships between the IOC and the USOC, undermining any attempt at a collaborative effort to develop programs for the broader good of the Olympic Movement. For the USOC, it was a matter of who really controlled the Olympic Movement. Its view was that it should be run from its Colorado Springs headquarters and not from Lausanne.”138 Blackmun envisioned a different way forward. If the IOC and USOC could function in a more collaborative fashion, the entire Olympic Movement stood to benefit, and the USOC’s interests, notably the prospect for hosting future Olympic festivals in the U.S., might be far better served. Jacques Rogge wasted little time when he saw the possibility for a thaw in relations. In 2011, Probst was appointed to the IOC’s International Relations Commission, while Blackmun was installed as a member of the Marketing Commission. The two Americans employed these opportunities as platforms for outreach to the global Olympic community, in effect renewing the face of the USOC.139 Their focused efforts at diplomacy paid dividends. Richard Pound, no stranger to dealing with USOC officials over revenue matters and the some- times charged negotiating environment fostered by the realities of the U.S. market and the Amateur Sports Act, complimented them on giving “the USOC a human dimension as opposed to being this gigantic money-raising organization that doesn’t care about anything outside of the United States.”140 Central to their success was the fulfillment of Probst’s pledge to re-visit the USOC’s share of U.S. television money and TOP revenue in 2013. In fact, dis- cussions were fast-tracked and commenced in January 2011.141 A deal was concluded the following year that preserved the USOC’s level of U.S television and TOP dollars through the , but any increases in 2020 and beyond would result in the USOC’s share reduced from 12.75% to 7% (for television) and from 20% to 10% (for TOP).142 “We restructured our financial relationship in a way that I think,” noted Blackmun, “made the IOC feel better and that was fair for them, and that gave them greater shares of revenue growth.”143 The accord established the financial terms of the IOC-USOC rela- tionship through 2040. If any further evidence was needed to signal not just detente, but an honest desire to work towards shared goals, IOC President Thomas Bach welcomed USOC officials into the final stages of his secret nego- tiations with NBC Universal for a $7.75 billion, six-festival (2022, 2024, 2028, 2030, and 2032) extension to its U.S. television partner status in March 2014.144

26 A Long and Winding Road

Conclusions

In 1967, Avery Brundage lamented what he perceived to be the deleterious effect of television money on relations between the IOC and its partner orga- nizations, the NOCs and ISFs. “I have deplored on more than one occasion,” observed Brundage in a letter to Roger Coulon, the President of the Fédération Internationale des Lutte Associées (now, United World Wrestling), “the idea of financial considerations being introduced into Olympic affairs. For the first time serious arguments have been provoked and I do not like it!”145 It is true that the IOC sparred with NOCs and ISFs over an acceptable method of distributing Olympic television money in the 1960s. However, in the end, Brundage was content with 1/9th shares of global television revenue being channelled to the IOC, ISFs, and NOCs respectively, with the rest pay- able to the OCOGs as had been determined by the “Rome Formula” estab- lished in 1966. But, the ISFs and NOCs were not pacified. And, the OCOGs saw this as too much money being diverted from the funds required to host the Olympic Games. Discontent within the NOC and ISF communities mani- fested itself in the formation of the Permanent General Assembly of NOCs (later the Association of National Olympic Committees) and the General Assembly of International Sport Federations (GAISF), umbrella lobby groups envisioned as a means of pressing the autocratic Brundage and the IOC for greater consideration of their concerns in the future.146 As Brundage prepared to retire in 1972, the primary locus of conflict over commercial revenue had shifted to the Olympic Movement’s share of television revenue (33%) in com- parison to the allotment enjoyed by the OCOGs (67%). Successive efforts by Organizing Committees in the 1970s to enhance their share of television revenue at the expense of the IOC and its partners forced the hand of Brundage’s successor, Lord Killanin, who first sought to enhance the IOC’s knowledge of the television industry, and subsequently inserted its representatives into the negotiations process (commencing with the 1984 cycle of negotiations) alongside the television executives and OCOG officials. With respect to television contracts, relations between IOC officials such as Killanin, Monique Berlioux, and Chairman of the IOC Finance Com- mission Count Jean de Beaumont, and leaders of OCOGs faced with climbing budgetary demands because of the expanding costs of hosting Olympic festi- vals, were often fractious. Killanin’s moves, of course, were motivated by a need to protect the IOC’s financial interests. On the other hand, such actions accelerated the organization’s evolution away from the type of sporting body envisioned by the likes of Coubertin or Brundage.147 Juan Antonio Samaranch’s arrival in Lausanne heralded further change, as did the shifting world of sport within an emerging globalized economy. Sama- ranch recognized the dangerous financial dependency of the IOC solely on

27 Wenn television money, and sought a means through the TOP program to diversify the Olympic Movement’s revenue base, while at the same time augmenting sums of money available to OCOGs.148 Samaranch’s vision for financial auton- omy required foot soldiers capable of converting the vision to reality, and in Richard Pound and Michael Payne, he found those individuals. As events described in this essay demonstrate, much of their time was devoted to dealing with USOC officials determined to leverage the Amateur Sports Act as a tool for generating revenue for the execution of the USOC’s mandate. The time line of IOC/USOC relations in the 1980s and 1990s is lit- tered with episodes that sparked conflict, including the USOC’s initial efforts to pursue a percentage of TOP revenue and U.S. television contracts, the McMillen Bill, and the eventual establishment of long-term television con- tracts. With the election of Jacques Rogge, the cast of characters in Lausanne who represented the financial interests of the IOC changed. So, too, did the people and personalities in Colorado Springs in the post-Sydney 2000 years as a result of diminished stability within the USOC’s leadership ranks. The con- flict between the IOC and USOC over the distribution of commercial revenue persisted. At the heart of this disputatious dynamic rested the Amateur Sports Act. It was the most significant driver in setting the agenda for financial discussions between the IOC and USOC for three decades. Debates, arguments, and at times, personality clashes, affected the ability of the two organizations to advance their mutual interests. Given the USOC’s rights enshrined within the ASA, the marriage of the Olympic Games to commercial interests and the bur- geoning sums offered by television networks and corporate sponsors, together with the IOC’s need to safeguard its financial interests along with those of its partners, the NOCs and ISFs, the Act was destined to serve as a source of con- flict between the IOC and the USOC. Chicago’s collapse in the 2016 bid competition marked a significant turn- ing point in the narrative of conflict with respect to the distribution of com- mercial revenue. Within a few short months, Scott Blackmun, an individual who grasped the necessity of improving the working relationship between the IOC and the USOC, arrived in Colorado Springs.149 Rather than investing their energies in future U.S. bids that harboured no chance for success, he and USOC President Larry Probst, who himself bore a few scars from Chicago’s demise, targeted the troubled inter-organizational relations.150 Their efforts at outreach did not go unnoticed. “You gradually get to be known. Neither of them is a particularly frightening personality,” commented Pound. “They’ve worked out a modus operandi that seems to work.”151 An ambitious travel schedule aimed at engaging Olympic officials in discussions fostered better feelings, culminating in Blackmun’s invitation to serve on the IOC Marketing

28 A Long and Winding Road

Commission, Probst’s appointment to the IOC, and the USOC’s decision to support a city (Boston) in the 2024 bid city competition. Boston dropped its prospective host city candidacy in mid-2015, but as Los Angeles, now the USOC’s candidate for 2024, ramps up its efforts to secure the right to host the 2024 Olympic Games, one observation is abun- dantly clear. In both words and actions, the leaders of the two titans of Olym- pic revenue generation have arrived at a point in time when both parties understand that their individual and collective aspirations, especially those tied to revenue generation, are better served when collaboration and mutual respect govern their interaction.

Endnotes

1 See for instance, Matt Bonesteel, “Oslo drops bid, leaving IOC with two bad choices,” Washington Post, 2 October 2014, http://www.washingtonpost.com/blogs/early-lead/wp/2014/10/02/oslo- drops-2022-winter-olympics-bid-leaving-ioc-with-two-bad-choices/ [15 January 2015]; Tony Manfred, “The Olympics Desperately Needed Oslo To Host The 2022 Games, And The IOC Is Outraged They Pulled Out,” Business Insider, 2 October 2014, http://www.businessinsider.com/olym- pics-oslo-2022-olympics-2014-10#ixzz3OuGRMF4B [15 January 2015]; “Oslo 2022 bid hurt by IOC demands, arrogance,” USA Today, 5 October 2014, http://www.usatoday.com/story/sports/olympics/2014/10/05/oslo- 2022-bid-hurt-by-ioc-demands-arrogance/16759151/ [15 January 2015]. 2 Rick Burton and Norm O’Reilly, “Soaring cost of Olympic host bids con- cerns Ueberroth,” Street & Smith’s Sport Business Journal, 20 August 2012, http://m.sportsbusinessdaily.com/Journal/Issues/2012/08/20/Opin- ion/Burton-OReilly.aspx [29 November 2014]. 3 Judith Grant Long, “Rethinking Olympic Infrastructure,” LSECities.net, October 2013, http://lsecities.net/media/objects/articles/rethinking-olym- pic-infrastructure/en-gb/ [29 November 2014]. 4 While the 20 + 20 recommendations cover far more ground than the shift in bidding policies, important changes in this regard include: 1) placing more emphasis on pre-existing facilities in assessing bids; 2) permitting cit- ies to place a sport on the Olympic program that has deep cultural connec- tion to the host country; 3) reducing the cost of bidding by limiting the required number of presentations, authorizing the production of the bid books in electronic format only; and, 4) permitting joint city bids, with the possibility that the two cities are in different countries. “Olympic Agenda 2020: 20 + 20 Recommendations,” Olympic.org, http://www .olympic.org/ Documents/Olympic_Agenda_2020/Olympic_Agenda_2020 -20-20_Rec-

29 Wenn

ommendations-ENG.pdf [25 January 2015]; and, Philip Hersh, “IOC allows summer or winter Olympics in two countries; baseball, softball get second life,” Chicago Tribune, 8 December 2014, http://www.chicagotri- bune.com/sports/breaking/chi-ioc-will-allow-summer-or-winter-olym- pics-in-two-countries-20141208-story.html [25 January 2015]. Early indications are that Thomas Bach’s Olympic Agenda 2020 plan has given some comfort to those considering the financial risks inherent in hosting an Olympic festival. The IOC is looking at a wider field of candidate cities for 2024 as opposed to the winnowed field it faced in the context of the competition to host the 2022 Olympic Winter Games. Confirmed candi- date cities for 2024 are: Budapest; Hamburg; Los Angeles; Paris; and, Rome. 5 Chicago 2016’s first ballot exit at the IOC vote in Copenhagen in 2009 spelled out the high degree of dissatisfaction primarily from European- based IOC members with the lack of progress on a revised Olympic reve- nue distribution deal between the IOC and USOC, and convinced the USOC to withhold support for future U.S. bid cities given their dim pros- pects for success. See, Stephen R. Wenn, “IOC/USOC Relations and the 2009 IOC Session in Copenhagen,” in Robert K. Barney, Janice Forsyth, and Michael K. Heine, eds., Rethinking Matters Olympic: Investigations into the Socio-Cultural Study of the Modern Olympic Movement – Tenth International Symposium for Olympic Research (London, University of Western Ontario, 2010), pp. 60-75. 6 Nancy Armour, “Boston will be USOC’s bid city for 2024 Olympics,” USA Today, 8 January 2015, http://www.usatoday.com/story/sports/olympics/ 2015/01/08/boston-2024-us-olympic-bid-city/21458619/ [15 January 2015]; Amy Shipley, “Deteriorating USOC-IOC relations threaten both organi- zations,” Washington Post, 22 December 2009, http://www.washington- post.com/wp-dyn/content/article/2009/12/21/AR2009122101900.html?sid =ST2009122602221 [15 January 2015]; “IOC, USOC finalize new revenue deal,” ESPN, 24 May 2012, http://espn.go.com/olympics/story/_/id/ 7967000/ioc-usoc-resolve-differences-revenues [15 January 2015]; and, Wenn, “IOC/USOC Relations and the 2009 IOC Session in Copenhagen.” 7 Support for the bid at the local level was underwhelming. A poll con- ducted by the local National Public Radio affiliate revealed only 40% of Bostonians in favour of the bid, and 50% opposed in light of concerns over cost overruns and the thought that Boston’s transportation system could not adequately support the staging of the Games. Jon Kamp, “Bos- ton Area’s Support Still Low for 2024 Summer Olympics Bid, Poll Shows,” Wall Street Journal 16 April 2015, http://www.wsj.com/arti- cles/boston-areas-support-still-low-for-2014-summer-olympics-bid- poll-shows-1429174872 [28 May 2015]. See also, Juliet Macur, “If 2024 Olympic Bid Is a Hot Potato, Boston Has No Appetite,” New York Times, 2 April 2015, http://www.nytimes.com/2015/04/03/sports/olympics/bos- ton-2024-olympic-bid-is-a-problem-of-usocs-own-making.html?_r=0

30 A Long and Winding Road

[28 May 2015]. A massive two decade-long highway project, known as “The Big Dig,” prompted many Bostonians to shudder in fear of possible Olympic-related costs. The highway project was supposed to cost $2.4 bil- lion, but expenditure mushroomed to over $14 billion. With interest, the cost estimate, with the books not closed until 2038, rests at over $24 bil- lion. Justine Hofherr, “Can We Talk Rationally About the Big Dig Yet?” Boston.com, 5 January 2015, http://www.boston.com/cars/news-and- reviews/2015/01/05/can-talk-rationally-about-the-big-dig-yet/0BPodDn- lbNtsTEPFFc4i1O/story.html [28 May 2015]. The USOC commenced a review of the bid given the level of local dissent. Jack Encarnacao, “Boston 2024, USOC Huddle to Right Ship,” Boston Herald, 17 July 2015, http:// www.bostonherald.com/news_opinion/local_coverage/2015/07/bos- ton_2024_usoc_huddle_to_right_ship [23 July 2015]. 8 While most insiders pegged Los Angeles as the favourite in this domestic contest, the USOC initially selected Boston (over Los Angeles, San Fran- cisco, and Washington) to enter the wider competition against the likes of Rome and possible entrants from France (likely Paris) and (Ber- lin or Hamburg). Jere Longman, “U.S.O.C. Chooses Boston as Candidate for 2024 Summer Olympics,” New York Times, 8 January 2015, http:// www.nytimes.com/2015/01/09/sports/olympics/boston-to-be-us-bid- city-for-2024-olympics.html?_r=0 [15 January 2015]; Eddie Pells, “Bos- ton the surprise choice for 2024 Olympic bid,” Houston Chronicle, 8 Janu- ary 2015, http://www.houstonchronicle.com/olympics/article/Boston- the-surprise-U-S-choice-for-2024-Olympic-6003380.php [15 January 2015]; and, “IOC expects high interest in 2024 Olympic bids,” Sportsnet, 15 January 2015, http://www.sportsnet.ca/more/ioc-expects-high-inter- est-in-2024-olympic-bids/rtsn [15 January 2015]. 9 Thomas M. Hunt, “Countering the Soviet Threat in the Olympic Medals Race: The Amateur Sports Act of 1978 and American Athletics Policy Reform,” The International Journal of the History of Sport 24 (June 2007): 796. 10 Robert K. Barney, Stephen R. Wenn, and Scott G. Martyn, Selling the Five Rings: The International Olympic Committee and the Rise of Olympic Commercialism (Salt Lake City: University of Utah Press, rev. ed., 2004), pp. 168-175; and, for a record of the actual signing, see Minutes of the Meeting of the IOC Executive Board, Lausanne, 28 May 1985, pp. 177-178, International Olympic Committee Archives, Lausanne, Switzerland [hereafter cited as IOCA]. 11 This USOC initiative was first conveyed to Juan Antonio Samaranch through two telexes from Richard Pound, an IOC Executive Board mem- ber and Chairman of the IOC’s Television Rights Negotiations Commis- sion. See, Richard Pound to Juan Antonio Samaranch, 26 September 1985; and, Richard Pound to Juan Antonio Samaranch, 30 September 1985, “Seoul 1988 TV-General II” File, IOCA.

31 Wenn

12 This agreement was reached on 26 March 1986, with the signing of the Broadcast Marketing Agreement. Included in its terms were a $15 million payment to the USOC, shared by the IOC, and the 1988 Seoul and Cal- gary Organizing Committees, and the USOC’s receipt of 10% of all future U.S. Olympic television contracts commencing in 1992. Minutes of the Meeting of the IOC Executive Board, Lausanne, 11-12 February 1986, p. 5; and, Minutes of the Meeting of the IOC Executive Board, Seoul, 22-24 April 1986, p. 4, IOCA. 13 The path to the USOC’s improved share of TOP money is recounted in Barney, Wenn, and Martyn, Selling the Five Rings, pp. 177-179. For the television episode, and the IOC’s decision in 1996 to cede 12.75% of U.S. television contracts to the USOC commencing in 2004, see Stephen R. Wenn, “Riding into the Sunset: Richard Pound, Dick Ebersol, and Long- Term Olympic Television Contracts,” in Kevin B. Wamsley, Scott G. Martyn, Gordon H. MacDonald, and Robert K. Barney, eds, Bridging Three Centuries: Intellectual Crossroads and the Modern Olympic Move- ment – Fifth International Symposium for Olympic Research (London: University of Western Ontario, 2000): 37-50. The USOC’s share shifted to 18.5% for TOP II (1989-1992), and 20% for TOP III and beyond. It is rel- evant to one’s understanding of these financial matters to know that these percentages are the publicized figures, but that the USOC pays a fee towards the administration of the TOP program so they do not represent their net receipts from TOP. The USOC also now contributes to a fund that assists in defraying the administrative costs of staging the Games, such as those needed to support doping control. TOP I earned $97 mil- lion, with the succeeding TOP II and III cycles generating $175 million and $350 million respectively. Scott G. Martyn, “The Struggle for Finan- cial Autonomy: The IOC and the Historical Emergence of Corporate Sponsorship, 1896-2000” (PhD dissertation, University of Western Ontario, 2000), p. 264. 14 The collapse of Chicago 2016’s bid in Copenhagen is addressed in detail, in Wenn, “IOC/USOC Relations and the 2009 IOC Session in Copenha- gen.” 15 “IOC, USOC finalize new revenue deal”; and, Tripp Mickle, “Improved IOC-USOC relationship on display,” Street & Smith’s Sport Business Jour- nal, 12 May 2014, http://www.sportsbusinessdaily.com/Journal/Issues/ 2014/05/12/Olympics/ [15 January 2015]. 16 Hunt, “Countering the Soviet Threat in the Olympic Medals Race: The Amateur Sports Act of 1978 and American Athletics Policy Reform,” 796- 818. 17 Ibid., p. 804. 18 James A. R. Nafziger, “The Amateur Sports Act of 1978,” BYU Law Review, 1983, Issue #1, Article 9, pp. 47-99, http://digitalcom- mons.law.byu.edu/lawreview/vol1983/iss1/9/ [27 January 2015].

32 A Long and Winding Road

19 Scott Blackmun reports that the 2013-2016 quadrennial budget for the USOC is approximately $800 million. The budget for any Olympic year is higher than for non-Olympic years. “Interview with USOC CEO Scott Blackmun,” Universal Sports Network, 22 January 2015, http://universalsports.com/2015/ 01/22/interview-with-usoc-ceo-scott-blackmun/ [9 March 2015]. Blackmun sat for an interview with host Rick Horrow for the network’s show, “Beyond the Medals – The Business of Sport.” 20 Hunt, “Countering the Soviet Threat in the Olympic Medals Race,” pp. 161-163. 21 Michael Harrigan, “A Class Act,” The Olympian, January 1989, pp. 14-15. The author would like to express appreciation to Teri Hedgpeth, Archi- vist and Historical Steward, USOC, for locating and subsequently sending him a copy of the article. 22 Ibid., p. 15. 23 “Amateur Sports Act: Hearings before the Committee on Commerce, Sci- ence, and Transportation, United States Senate, Ninety-fifth Congress, First Session on S. 2036,” October 18 and 19, 1977, p. 87, http:// babel.hathitrust.org/cgi/pt?id=mdp.39015077913609;view=1up;seq=1 [27 January 2015]. 24 Barney, Wenn, and Martyn, Selling the Five Rings, pp. 31-49. 25 Robert K. Barney, “An Olympian Dilemma: Protection of Olympic Sym- bols,” Journal of Olympic History 7 (September 2002): 10. 26 Available data show production soared with nearly 9 million loaves of bread produced in 1935 with the number steadily climbing to 15.5 million loaves in 1939. Sales figures for the bread department which produced cakes, breadrolls, loaves of bread, and doughnuts improved from $1.46 million (1935) to $2.6 million (1939). Helms, who drew a nominal salary in 1932 ($10,000), received $52,000 on a yearly basis between 1937 and 1939. The bread business was good! See, Helms Bakeries v. Commissioner of Internal Revenue, 23 T.C. 967 (T.C. 1955), Docket No. 32321, 11 March 1955, https://casetext.com/case/helms-bakeries-v-commissioner-of-inter- nal -revenue-1 [27 January 2015]. 27 Bulletin of the International Olympic Committee, No. 25, January 1951, pp. 26-28. The article was accessed through the digital archives of the LA84 Foundation, and if one wishes to know the scope of its operations, one can access this article at http://library.la84.org/OlympicInformation- Center/OlympicReview/1951/BDCE25/BDCE25n.pdf [26 January 2015]. 28 Helms Bakeries v. Commissioner of Internal Revenue, 23 T.C. 967 (T.C. 1955). 29 Barney, “An Olympian Dilemma: Protection of Olympic Symbols,” pp. 12-24. Scott Martyn notes that Helms attempted to acquire trademark registration of the term, “Olympic Winner” in 1951, but formally aban- doned the attempt in 1953, under pressure from USOC officials. Scott G.

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Martyn, “Toward an Impasse: An Examination of the Negotiations Behind the Inclusion of the United States Olympic Committee in the Olympic Programme,” in Robert K. Barney, Scott G. Martyn, Douglas A. Brown, and Gordon H. MacDonald, eds., Olympic Perspectives: Third International Symposium for Olympic Research (London: University of Western Ontario, 1996), p. 110. 30 “Amateur Sports Act: Hearings before the Committee on Commerce, Sci- ence, and Transportation, United States Senate, Ninety-fifth Congress, First Session on S. 2036,” October 18 and 19, 1977, p. 87. 31 Harrigan, “A Class Act,” p. 14. 32 “Amateur Sports Act: Hearings before the Committee on Commerce, Sci- ence, and Transportation, United States Senate, Ninety-fifth Congress, First Session on S. 2036,” October 18 and 19, 1977, p. 87. 33 Simson and Jennings detail the Samaranch/Dassler connection in, Vyv Simson and Andrew Jennings, The Lords of the Rings: Power, Money and Drugs in the Modern Olympics (Toronto: Stoddart Publishing Co., Ltd., 1992), pp. 72-84. See also, Deborah Philips and Garry Whannel, The Tro- jan Horse: The Growth of Commercial Sponsorship (New York and Lon- don: Bloomsbury Academic, 2013), pp. 57-59. Smit addresses Dassler’s rise to power and prominence within the world of global sport in, Barbara Smit, Sneaker Wars, The Enemy Brothers Who Founded Adidas and and the Family Feud That Forever Changed the Business of Sports (New York: Ecco/Harper Collins, 2008). Hill touches on Samaranch’s relation- ships with Havelange, Vázquez Raña, and Dassler in, Christopher R. Hill, Olympic Politics: Athens to Atlanta, 1896-1996 [2nd Edition] (Manchester and New York, Manchester University Press, 1997), pp. 63-64. 34 David Miller, “Evolution of the Olympic Movement,” in From Moscow to Lausanne (Lausanne: International Olympic Committee, 1990), p. 9. 35 Jere Longman, “Juan Antonio Samaranch Dies at 89; Led I.O.C.,” New York Times, 21 April 2010, http://www.nytimes.com/2010/04/22/sports/ 22samaranch.html?ref=sports&pagewanted=print [21 April 2010]. 36 David Miller, Olympic Revolution: The Biography of Juan Antonio Sama- ranch (London: Pavilion Books Ltd., 1992), p. 20 [Emphasis Miller’s]. 37 “Notes on the Work of the Television Sub-Committee,” 23 June 1974, “TV Divers 1974-1985” File, IOCA. 38 Killanin’s approach is explained in, Scott G. Martyn and Stephen R. Wenn, “A Prelude to Samaranch: Lord Killanin’s Path to Commercial- ism,” Journal of Sport History 16 (July 2008): 40-48. For the successive series of Organizing Committee-managed negotiations, see Barney, Wenn, and Martyn, Selling the Five Rings, pp. 103-150. 39 Michael Payne, Olympic Turnaround (Twyford, Berks: London Business Press, 2005), p. 9. 40 Ibid., p. 14.

34 A Long and Winding Road

41 Richard Pound notes that Dassler kept a close watch on these discussions. “In and around the new commission,” wrote Pound, “hovered Horst Das- sler, an inveterate sports politician who was responsible for part of the family-owned Adidas operations.” , Inside the Olympics: A Behind-the-Scenes Look at the Politics, the Scandals, and the Glory of the Games (Toronto: John Wiley and Sons Canada Ltd., 2004), p. 141. For Dassler’s efforts in pushing forward his sport marketing agenda, see, Alan Tomlinson, “The Making – and Unmaking? – of the Olympic Corporate Class,” in Helen Lenskyj and Stephen Wagg, eds, The Palgrave Handbook of Olympic Studies (New York: Palgrave MacMillan, 2012), pp. 233-247. 42 Pound, Inside the Olympics, p. 143. 43 Barney, Wenn, and Martyn, Selling the Five Rings, p. 170. 44 Pound, Inside the Olympics, pp. 143, 149-150. 45 Payne, Olympic Turnaround, pp. 80-81. 46 Barney, Wenn, and Martyn, Selling the Five Rings, p. 171. 47 Muriel Cohen to Monique Berlioux, 25 March 1983, “ISL Marketing,” File, IOCA. Scott Martyn unearthed the USOC’s wary approach to the emergence of TOP in, Martyn, “Toward an Impasse.” 48 USOC suspicions about the IOC’s intent, and the relationship with Das- sler and ISL, offers former IOC Marketing Director Michael Payne, was likely tied to Monique Berlioux’s project with Stanley R. Shefler, President of Intelicense SA Corp on the marketing of pictograms originally used in conjunction with the 1972 Munich Olympic Games (but, more recently employed in Montreal). The USOC resisted Shefler’s attempt to activate the pictograms in the U.S market, and the scenario drew the IOC, USOC, and Intelicense into protracted legal proceedings. Personal communica- tion, Michael Payne to the author, 13 February 2015. For an analysis of the Intelicense matter, see Scott G. Martyn, “Dreams of Grandeur: The Games of the Twenty-first Olympiad and the Exploitation of the Olympic Mystique,” in Kevin G. Wamsley, Robert K. Barney, and Scott G. Martyn, eds., The Global Nexus Engaged: Past, Present, Future Interdisciplinary Olympic Studies. Sixth International Symposium for Olympic Research (London: University of Western Ontario, 2002), pp. 85-92. 49 William E. Simon (with John M. Caher), A Time for Reflection: An Auto- biography (Washington: Regnery Publishing Inc., 2004), pp. 207-208. Simon wrote that neither he nor Miller “thought it wise to concede con- trol of U.S. Olympic Committee finances to an international organiza- tion. Under federal law, the USOC had exclusive rights to market the Olympic name and symbols in the U.S. Why would we give up that right?” Michael Payne casts some doubt on Simon’s version of events. Such a meeting might have occurred, but Payne notes ISL was not estab- lished until after the 1982 World Cup. Personal communication, Michael Payne to the author, 13 February 2015. Had Simon’s memory failed him

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on the timing of the discussion, or had Dassler merely sounded him out on the concept of such a marketing approach in 1981 (based on bundling Olympic marketing rights to all NOCs) when he still had a business rela- tionship with Patrick Nally, co-founder of the West Nally Group? For background on Nally, see Roger Blitz, “The Godfather of sports market- ing,” Financial Times, 4 May 2012, http://www.ft.com/intl/cms/s/0/ 1652cf54-fb40-11e0-8df6-00144feab49a.html#axzz3ReiytWCz [13 Febru- ary 2015]. 50 Barney, Wenn, and Martyn, Selling the Five Rings, pp. 171-173. 51 Frank Litsky, “F. Don Miller, 75, U.S. Olympic Committee Chief,” New York Times, 18 January 1996, http://www.nytimes.com/1996/01/18/us/f- don-miller-75-us-olympic-committee-chief.html [2 March 2015]; and, “F. Don Miller, Former Head of USOC, Is Dead at 75,” Los Angeles Times, 18 January 1996, http://articles.latimes.com/1996-01-18/sports/sp- 26017_1_f-don-miller [2 March 2015]. Miller’s success at the 1943 NCAA Boxing Championships in the 155 pound category is chronicled in Doug Moe, Lords of the Ring: The Triumph and Tragedy of College Boxing's Greatest Team (Madison, University of Wisconsin Press, 2004), pp. 93-95. 52 Barney, Wenn, and Martyn, Selling the Five Rings, p. 174. 53 Samaranch’s decision reflected his general loss of confidence in Berlioux and, when combined with the breakdown in their working relationship, marked another step along the path to her dismissal later in the year. 54 Barney, Wenn, and Martyn, Selling the Five Rings, pp. 211-213, 224-226. 55 Teri Hedgpeth once again supplied the author with important leads in sifting through Kane’s efforts. The first document is a handwritten sum- mary produced by Kane concerning his efforts to work with Congressio- nal leaders to institute a 10% excise tax on the value of U.S. Olympic television contracts. See, “TV Rights Sharing,” Undated, Robert J. Kane Personal Papers, Box 4c, USOC Archives, Colorado Springs [hereafter cited as RJKP]. Based on its content, the document was produced between August 1991 and Kane’s passing in 1992. The second document is a brief, prepared by Robert Kane, with the likely assistance of his friend, former Congressman Barber Conable, that was sent to members of the House Ways and Means Committee. See, Robert J. Kane, “Why the U.S. Deserves a Share of IOC TV Revenues,” Undated, RJKP, Box 4c. Based on the timeline of proceedings on Capitol Hill, the document dates to mid- 1985. 56 Kelly told Kane that the USOC would cover any personal expenses incurred while pursing the revenue. “TV Rights Sharing.” 57 Kane’s memory may have failed him on one count in terms of his recol- lection of events. It would have been impossible for him to convene with NBC officials in early to mid-1985 about its U.S. television contract for Seoul. The first round of bidding, with ABC and CBS officials also

36 A Long and Winding Road

engaged in the process, was not staged in Lausanne until September. Bar- ney, Wenn, and Martyn, Selling the Five Rings, p. 221. 58 Ibid. Kane informed Conable on the disparity of funds provided by U.S. networks and those in other markets. “The USOC gets none of this back. However, of the IOC’s one-third split, it does dole out aid to the needy nations in what it calls its Solidarity Fund.” Kane implied a less than impressed view that Communist nations benefited from these U.S. dollars. “Cuba, East Berlin, Hungary, among others, share in our lar- gesse,” he wrote. Robert J. Kane to Barber Conable, Jr., 11 July 1985, RJKP, Box 4c. 59 Wolfgang Saxon, “Barber B. Conable, 81, Congressman and Bank Chief, Dies,” New York Times, 2 December 2003, http://www.nytimes.com/ 2003/12/02/nyregion/02/CONA.html [5 February 2015]. 60 Kane, “Why the U.S. Deserves a Share of IOC TV Revenues.” 61 “TV Rights Sharing.” 62 Ibid. 63 Michael Janofsky, “Miller Quits as U.S.O.C. Chief,” New York Times, 25 August 1987, http://www.nytimes.com/1987/08/25/sports/miller-quits- as-usoc-chief.html [2 March 2015]. Teri Hedgpeth informed the author that USOC President Jack Kelly and Executive Director George Miller were officially installed in their roles on 9 February 2015. See Personal Communication, Teri Hedgpeth to the author, 3 March 2015. 64 “TV Rights Sharing.” 65 Richard Pound to Juan Antonio Samaranch, 26 September 1985. 66 Richard Pound to Juan Antonio Samaranch, 30 September 1985. 67 Howard M. Stupp to Juan Antonio Samaranch, 3 October 1985, “Seoul ’88 TV General II 1985” File, IOCA. 68 The widely accepted rationale for a Soviet bloc boycott has been retalia- tion for the U.S.-led boycott of the 1980 Moscow Olympics. This interpre- tation of events has been recently, and effectively, challenged by Robert Edelman, in Robert Simon Edelman, “The Russians Are Not Coming! The Soviet Withdrawal from the Games of the XXIII Olympiad,” The International Journal of the History of Sport 32 (1, 2015): 9-36. On the basis of declassified archival material in the former Soviet Union, Edel- man makes a compelling case that the Soviets wanted to avenge the U.S. boycott by trouncing its Cold War adversary in 1984 on its home soil. However, the passing of and the Soviets’ downing of a Korean commercial airliner changed the course of events. An energized anti-Soviet movement in the United States, headed by the Ban the Soviets Coalition, dissuaded the Soviets from attending as officials feared for the safety of the athletes and remained wary of the possibility of defections. 69 Simon, A Time for Reflection, pp. 217-218.

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70 Ibid; and, Minutes of the Meeting of the IOC Executive Board, Calgary, 25- 28 February 1985, pp. 54-56. 71 Juan Antonio Samaranch to Richard Pound, 1 October 1985, “Seoul ’88 TV General II 1985” File, IOCA. 72 Kane, “Why the U.S. Deserves a Share of IOC TV Revenues.” 73 “TV Rights Sharing.” Conable updated Kane in early December that the substance of the bill devised by Vander Jagt had been added to the Tax Reform Act through assistance from a number of his “friends” on Capitol Hill. Barber B. Conable, Jr. to Robert J. Kane, 6 December 1985, RJKP, Box 4c. 74 Ibid. 75 Robert J. Kane, “Alumni Who Aid Athletics,” Cornell Alumni News, June 1986, p. 65. A pdf of the issue can be downloaded from: http://www.goo- gle.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CCQQFjAB &url=http%3A%2F%2Fecommons.library.cornell.edu%2Fbitstream%2F1813 %2F28022%2F1%2F088_10.pdf&ei=6cv5VPiFMuqRsQSEx4GYDg&usg =AFQjCNH8lRnzcf05hXnqOUdCStjHzh4fVg&sig2=cElNQFZ4V60vwg BADqCrkw&bvm=bv.87611401,d.cWc [15 February 2015]. See also, George D. Miller to Barber Conable, 6 March 1986; and, George D. Miller to Robert J. Kane, 7 April 1986, RJKP, Box 4c. 76 Phone conversation, Richard Pound, 20 July 2015. 77 “Report to the Finance Commission Paris 6th June 1986,” p. 6, “Seoul 1988 TV General Août-Décembre 1986,” File, IOCA. 78 “TV Rights Sharing”; Minutes of the Meeting of the IOC Executive Board, Lausanne, 11-12 February 1986, pp. 5, 7; and, Minutes of the Meeting of the IOC Executive Board, Seoul, 22-24 April 1986, p. 4. 79 Kane opposed the decision to withdraw the excise tax. “TV Rights Shar- ing.” See also, George D. Miller to Barber Conable, 6 March 1986. George Miller met with Guy Vander Jagt in Washington in late February to explain recent developments concerning negotiations with IOC officials. Vander Jagt expressed his pleasure that HR 3770 and the Tax Reform Act had assisted the USOC in achieving its goal. In his letter to Conable, Miller confirmed that the Tax Reform Act served as “insurance” in the event that the IOC considered “reneging” on the deal and that nothing would be done to “perturb” the Tax Reform Act until the IOC signed the Broadcast Marketing Agreement. 80 This tortured set of negotiations is detailed in Barney, Wenn, and Martyn, Selling the Five Rings, pp. 213-226. Seoul’s financial expectations for a U.S. television contract had been set by Calgary’s earth shattering $309 million ABC deal, and the fact that history had shown that the Summer contract had a value in excess of two times the value of the Winter contract (when both were staged in the same year). However, ABC, and the losing suitors for the Calgary contract, CBS and NBC, were only too aware, even within

38 A Long and Winding Road

hours of the conclusion of the negotiations that the price was an inflated one driven upwards by the use of a sealed bid process devised by Richard Pound, and an advisor to the Calgary Organizing Committee, Barry Frank. Even the IOC concluded that ABC stood to lose between $50 and $60 million on the deal. Growing resentment at the sums of money paid by U.S. networks when compared to other global broadcasters, the feeling that they had been treated shabbily by the sealed bid process in the Cal- gary negotiations, and the time zone difference with Seoul, drove down interest amongst U.S. television executives. Much of the delay in conclud- ing a U.S. contract in the latter months of 1985 and the early months of 1986, and hence the IOC’s need to extend discussions concerning the USOC’s prospective share of future U.S. television revenue, is attributable to the Korean negotiators’ inability to accept the realities of the negotiat- ing environment and NBC’s extended effort to extract the best possible deal. 81 Miller, Olympic Revolution, pp. 108-109; and Personal communication, Richard Pound to the author, 9 February 2015. 82 Robert Z. Lawrence (with Jeffrey D. Pellegrom), “Fools’ Gold: How America Pays to Lose in the Olympics,” Television Quarterly (Fall, 1989): 5-10. 83 Peter Ueberroth pressed unsuccessfully for this consideration in relation to the 1984 Los Angeles Olympics. Barney, Wenn, and Martyn, Selling the Five Rings, pp. 196-198. 84 NBC paid $300 million for U.S. television rights for the 1988 Seoul Olym- pics, while EBU paid a fraction ($28 million) for Western European rights. 85 Lawrence (with Pellegrom), “Fools’ Gold: How America Pays to Lose in the Olympics,” p. 6. 86 Payne, Olympic Turnaround, p. 68. 87 Minutes of the Meeting of the IOC Executive Board, Lausanne, 24-26 July 1988, p. 26, IOCA. 88 American networks paid $401 million (NBC) and $300 million (CBS) for the rights to the 1992 Barcelona and 1994 Olympic Winter Games, while EBU acquired European rights for the same festivals for $75 million and $24 million respectively. 89 Payne, Olympic Turnaround, pp. 68-69. 90 “Notes on the Meeting with Congressman Tom McMillen, Washington, D.C.,” 17 January 1991, “IOC-USOC” File, Personal Computer Files of Richard Pound, Montreal, Canada [hereafter cited as PCFRP]. 91 Ibid; and, Richard Pound to Edward J. Markey (Chairman, Committee on Energy and Subcommittee on Telecommunications and Finance), 30 Sep- tember 1991 (draft), “IOC-USOC” File, PCFRP.

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92 “Notes on the Meeting with Congressman Tom McMillen, Washington, D.C.” Square brackets mine. 93 Ibid. 94 A former President of the Fédération Internationale de Natation Ama- teur, the international sport federation for aquatic sports, Helmick suc- ceeded William Simon as USOC President in 1985. In September 1991, he resigned his office in light of revelations that he had accepted more than $300,000 in consultancy fees for services that placed him in a conflict of interest. Former Deputy U.S. Attorney General Arthur Burns conducted an investigation for the USOC, and Samaranch tasked Keba M’Baye, Marc Hodler, and IOC Director General, François Carrard, to conduct a parallel IOC exploration of Helmick’s activities. Helmick fought to retain his place on the IOC Executive Board, but he was forced to resign his IOC membership in December. Miller, Olympic Revolution, pp. 220-221. Jour- nalist Michael Janofsky was scathing in his analysis of Helmick’s violation of USOC By-Laws, and the manner in which he had sullied the IOC. His resignation from the IOC triggered his immediate loss of positions with the Executive Boards of the Atlanta Organizing Committee and the USOC, leaving Helmick to “do little more to help future Olympic efforts than cheer from the sidelines.” Michael Janofsky, “OLYMPICS; As Helmick Resigns, His Familiar Rationale Misses the Ethical Point,” New York Times, 5 December 1991, http://www.nytimes.com/1991/12/05/ sports/olympics/as/helmick/resigns/his/familiar/rationale/misses/the/ ethical/point.html [12 February 2015]. 95 Minutes of the Meeting of the IOC Executive Board, Barcelona, 14-16 April 1991, p. 56. 96 Minutes of the Meeting of the IOC Executive Board, Birmingham, 10-11 June 1991, p. 43. While not privy to Pound’s suggestion concerning the pos- sible wisdom in securing the services of a lobbyist in his memo to Sama- ranch, dated 17 January 1991, he knew of the suggestion through Pound’s statement in, “Marketing Report to the Executive Board Birmingham June 1991,” in Annex 12, pp. 108-112 of the aforementioned minutes. 97 It was not UFA’s first attempt to acquire the rights to an Olympic festival. UFA offered $75 million for the rights to the 1992 Albertville Olympic Winter Games, but Samaranch and Hodler settled for $18 million from EBU. UFA was a Bertelsmann property. 98 Samaranch’s reflection was not accurate. EBU paid $75 million for West- ern European rights, but the entire European market yielded $94.5 mil- lion. 99 Minutes of the Meeting of the IOC Executive Board, Berlin, 17-19 Septem- ber 1991, p. 42, IOCA. 100 Ibid. 101 Ibid.

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102 Minutes of the Meeting of the IOC Executive Board, Lausanne, 4-6 Decem- ber 1991, pp. 43-44, IOCA. 103 Sally Jenkins, “Peacock Power – Talk about smoking the competition: With the 1996 Atlanta Games already in hand, Dick Ebersol of NBC Sports has grabbed five more Olympics – in the years 2000-2008,” Sports Illustrated, 25 December 1995, http://www.si.com/vault/1995/12/25/ 209185/peacock-power-talk-about-smoking-the-competition-with-the- 1996-atlanta-games-already-in-hand-dick-ebersol-of-nbc-sports-has- grabbed-five-more-olympics---in-the-years-2000-to-2008 [11 February 2015]. Jenkins returned to the Washington Post in 2000. 104 Six months of secret discussions yielded NBC a six-festival (2022, 2024, 2026, 2028, 2030, and 2032) contract through 2032 for $7.75 billion in May, 2014. This deal followed up on a four-festival agreement (2014, 2016, 2018, and 2020) acquired through a competitive bid process for $4.38 billion in June, 2011. NBC can boast an uninterrupted series of 17 Olympic festivals having been already broadcast or scheduled for ensuing years. See, Stephen Wilson, “NBC extends Olympic deal through 2032 for $7.75 billion,” Denver Post, 7 May 2014, http://www.denverpost.com/ books/ci_25714725/nbc-extends-olympic-deal-through-2032-7-75b [11 February 2015]. CBS was the U.S. Olympic broadcaster for the 1994 Lille- hammer and 1998 Nagano Olympic Winter festivals. 105 James Christie, “Reconcile with U.S. TV Networks, IOC is warned,” Deseret News, 27 February 2001, http://www.deseretnews.com/article/ 828136/Reconcile-with-US-TV-networks-IOC-is-warned.html?pg=all [12 February 2015]; and, Minutes of the Meeting of the IOC Executive Board, Nagano, 4-6 December 1995, pp. 63-65, IOCA. 106 Richard Pound to Harvey Schiller, Draft, revised, 3 December 1992, “IOC-USOC” File, PCFRP. 107 Richard Pound to Harvey Schiller, Draft, revised, 3 December 1992, “IOC-USOC” File, PCFRP. 108 The opening to NBC’s coverage of the Opening Ceremony and Bob Cos- tas’ reference to the weather conditions can be found on YouTube at, https://www.youtube.com/watch?v=dxly5ZUclx8. 109 Payne, Olympic Turnaround, p. 69. 110 Personal communication, Richard Pound to the author, 12 May 1999. Brackets mine. 111 Ibid. 112 Payne, Olympic Turnaround, p. 69. The IOC was tipped off to the USOC’s activities in Washington by an NBC staff member tasked to monitor pending federal legislation. 113 And, it seems Schultz and other USOC officials made a habit of pursuing Samaranch when they did not like the answers they received from Pound on financial matters linking the two organizations. In a memo to Sama-

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ranch, dated 13 February 1997, Pound wrote: “The practice of the USOC running to you each time I refuse to agree to an unreasonable position it has adopted is an insult to the IOC and to you as President. It is nothing more than the actions of a bully which cannot negotiate on the merits of its position and which thinks you will agree, on a ‘political’ basis, to com- mercially indefensible points.” Richard Pound to Juan Antonio Sama- ranch, 13 February 1997, “IOC-USOC” File, PCFRP. 114 Personal communication, Richard Pound to the author, 12 May 1999. 115 While she understood the IOC’s frustration with USOC officials, Anita DeFrantz informed her IOC Executive Board colleagues that “the USOC was as tired of the situation as the IOC was.” Minutes of the Meeting of the IOC Executive Board, Lausanne, 8-10 October 1996, p. 16. Pound was quite concerned about the USOC’s designs for its future financial rela- tionship with the IOC. When in receipt of the USOC’s suggested agenda items for the meeting in Lausanne, Pound informed Samaranch that, “the nature and extent of the direct challenges to the position of the IOC as leader of the Olympic Movement are even greater than I had expected.” Barring a shift in the USOC’s approach, it was tantamount to a “real dec- laration of war.” Richard Pound to Juan Antonio Samaranch, 10 Septem- ber 1996, “IOC-USOC” File, PCFRP. 116 Minutes of the Meeting of the IOC Executive Board, Lausanne, 8-10 Octo- ber 1996, p. 16. 117 Richard Pound to Juan Antonio Samaranch, 13 February 1997 [Italics Pound’s]. This careful reading of the draft saved the IOC from the type of financial disaster that it suffered amidst negotiations for the U.S. televi- sion contract for the 1976 Montreal Olympics. On that occasion, the Montreal Organizing Committee (COJO) obtained IOC consent to deduct 50% of the U.S. television contract for technical services, payable directly to COJO, such that the IOC, NOCs, and ISFs received only one- third of $12.5 million as opposed to one-third of the total value of the contract with ABC, $25 million. It was, in effect, with respect to the per- centage deducted from the U.S. television contract for technical services, the same consideration that the IOC gave to the 1972 Munich Organizing Committee. However, the concession to COJO, as had been the case with Munich, was made with the strict condition that no other contracts would be subject to a technical services fee. Montreal organizers proceeded to draft the agreement, and send it to Lausanne for signature. The IOC’s lawyer did not notice an addendum to the agreement that rendered all television contracts subject to a technical services fee (50%). The agree- ment was signed by the IOC. It was a costly oversight, one that enraged Lausanne officials, who were left with no legal recourse. Stephen R. Wenn, “Television Rights Negotiations and the 1976 Montreal Olym- pics,” Sport History Review 27 (November 1996): 111-138. The sophistica- tion of the IOC’s negotiating and financial management skills had increased quantum-fold on Samaranch’s Presidential watch.

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118 Ibid. 119 Ibid [Emphasis Pound’s]. Michael Payne concurred with Pound’s con- temporary assessment. Payne, Olympic Turnaround, p. 68. 120 Ibid. 121 Payne, Olympic Turnaround, p. 56. 122 Ibid., p. 57. 123 Ibid., pp. 59-60. 124 Ibid., p. 63. 125 Ibid., pp. 62-65. 126 Ibid., pp. 65-66. The “shock and awe” label was coined by Michael Payne in reference to NBC’s bid and GE’s sponsorship proposal. 127 Philip Hersh, “IOC member Cinquanta: Chicago the favorite,” Chicago Tribune, 18 June 2009, http://newsblogs.chicagotribune.com/sports_glo- betrotting/chicago_2016/page/2/ [23 February 2015]. The article appeared in Hersh’s blog, “Globetrotting: A Wordly View of Sports.” 128 Richard Pound, for one, believed that the IOC’s treatment of Chicago’s bid was short-sighted. “This is not the way you deal with the United States of America,” Pound intoned. He feared that a guaranteed 18-year gap between Olympic festivals on U.S. soil (this would later increase to at least 28 years between festivals) might shrink available U.S. commercial reve- nue. Shipley, “Deteriorating USOC-IOC relations threaten both organiza- tions.” 129 Richard Sandomir, “Olympics Channel Draws Rebuke from the IOC,” New York Times, 9 July 2009, http://www.ny-times.com/2009/07/09olym- pics.html [23 February 2015]. 130 “Television revenue not important insists Rogge,” More than the Games, 5 October 2009, http://www.morethanthegames.co.uk/121st-ioc-session- 056536-television-revenue-not-important-insists-rogge [23 February 2015]. 131 “Chicago bid boss says regional voting, IOC-USOC friction costly,” Reu- ters, 6 October 2009, http://blogs.reuters.com/sport/2009/10/06/chicago- bid-boss-says-regional-voting-ioc-usoc-friction-costly [23 February 2015]. The legendary Hatfield –McCoy rivalry pitted the families of Wil- liam Anderson Hatfield (West Virginia) and Randolph McCoy (Ken- tucky) against each other in the post-U.S. Civil War era. Wrote Otis K. Rice: “Antagonisms born of wartime emotions, anger over relatively triv- ial incidents such as the alleged theft of a hog, election-day disputes brought on by overdrinking, and family disapproval of the romantic attachments of some member were the kinds of experiences that were shared and understood by countless Americans” of the time. Otis K. Rice, The Hatfields and McCoys (Lexington: The University of Kentucky Press, 1982), p. 125. But these events, in the case of the Hatfields and McCoys,

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facilitated a decades-long rivalry marked by vendettas and murder that has become part of American folklore and the subject of television docu- mentaries, a television mini-series starring Kevin Costner and Bill Pax- ton, and numerous literary analyses. 132 “Dispute over Olympic Revenue Sharing May Impact Chicago Bid,” USA Today, 3 June 2008, http://www.usatoday.com/sports/olympics/2008-06- 03-chicago-share_N.htm [23 February 2015]. 133 Ibid. 134 “IOC, USOC to revisit Olympic Revenue Sharing,” CBS Sports, 4 June 2008, http://sportsline.com/worldsport/story/10852373 [23 February 1015]. 135 Juliet Macur, “Olympic Committees Compromise in Revenue-Sharing Dispute,” New York Times, 28 June 2009, http://nytimes.com/2009/03/ 28olympics.html [23 February 2015]. 136 John Powers, “Boston could benefit from better relationship between IOC, USOC,” Boston Globe, 18 January 2015, http://www.boston- globe.com/sports/2015/01/18/boston-could-benefit-from-better-rela- tionship-between-ioc-and-usoc/m1RTtCjkVBXTSqgmo1I2dM/ story.html [25 February 2015]. 137 Alan Abrahamson, “Scott Blackmun: Arguably the USOC’s last best chance,” Universal Sports, 6 January 2010, http://universalsports.com/ blogs/blog=alanabrahamsonsblog/postid=387006.html [23 February 2015]. 138 Payne, Olympic Turnaround, pp. 68, 138-140. Payne revealed that dis- putes concerning revenue distribution aside, the two organizations understood the need to protect the value of the Olympic brand when con- fronted with ambush marketers. And, they could collaborate when required. One such example unfolded in 1996 during the Atlanta Centen- nial Olympics, interestingly, at the same time that the IOC and Sama- ranch took much offense to the USOC’s effort to secure support for a Senate bill in Washington that offered changes in the manner in which U.S. Olympic television contracts would be negotiated and the manner in which the money would be distributed. In Atlanta, Nike launched an advertising platform underpinned by tag lines such as, “You do not win silver, you lose gold,” “If you can’t stand the heat, get out of Atlanta,” and in a “sarcastic swipe” at the type of themed advertising preferred by offi- cial Olympic sponsors, “We don’t sell dreams, we sell shoes.” Athletes, reports Payne, were disturbed by Nike’s approach and its dismissive atti- tude towards those who might capture silver medals. The IOC and the USOC were both greatly exercised by Nike’s campaign as it diminished the value of ’s USOC sponsorship deal and smeared the Olympic ideal. The IOC demanded a meeting with Nike, and such a dialogue occurred at Atlanta’s Marriott Marquis Hotel. Pound, Payne, and the USOC’s John Krimsky confronted Howard Slusher, one of Nike founder

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Phil Knight’s trusted executives. Slusher and Krimsky had a heated verbal exchange, highlighted by a challenge to settle their differences “man to man.” Payne noted: “Both men were of similar stature, similar egos, and of questionable fitness. The impending boxing match had definite enter- tainment value, if doubtful sporting discipline, but was probably not going to resolve the issue.” Nike reconsidered its approach in the ensuing days and backed away from its aggressive campaign. Nike supplanted Reebok as an official sponsor of the 2000 Sydney Olympics when the lat- ter walked away from its deal with the Sydney Organizing Committee as a result of a dispute. See Wenn, Barney, and Martyn, Tarnished Rings, pp. 115-117. 139 Stephen Wilson, “USOC leaders appointed to 2 IOC commissions,” Washington Post, 11 March 2011, http://www.washingtonpost.com/wp- dyn/content/article/2011/03/11/AR2011031103098.html [26 February 2015]. 140 Powers, “Boston could benefit from better relationship between IOC, USOC.” 141 Wilson, “USOC leaders appointed to 2 IOC commissions.” 142 “IOC, USOC finalize revenue deal,” ESPN.com, 24 May 2012, http:// espn.go.com/olympics/story/_/id/7967000/ioc-usoc-resolve-differences- revenues [24 February 2015]. 143 “Interview with USOC CEO Scott Blackmun.” 144 Mickle, “Improved IOC-USOC relationship on display.” See also, Wilson, “NBC extends Olympic deal through 2032 for $7.75b.” 145 Avery Brundage to Roger Coulon, 11 September, 1967, Avery Brundage Collection, Box 207, Wilfrid Laurier University, Waterloo, Ontario, Can- ada [hereafter cited as ABC]. 146 The struggle over shares of television revenue amongst members of the Olympic Tripartite in the 1960s is detailed in, Stephen R. Wenn, “An Olympian Squabble: The Distribution of Olympic Television Revenue, 1960-1966,” Olympika: The International Journal of Olympic Studies III (1994): 27-47; and, Stephen R. Wenn, “Growing Pains: The Olympic Movement and Television, 1966-1972,” Olympika: The International Journal of Olympic Studies IV (1995): 1-22. 147 See Barney, Wenn, and Martyn, Selling the Five Rings, pp. 103-150. 148 For a brief analysis, see Stephen R. Wenn and Scott G. Martyn, “Juan Antonio Samaranch’s Score Sheet: Revenue Generation and the Olympic Movement, 1980-2001,” in Gerald P. Schaus and Stephen R. Wenn, eds., Onward to the Olympics: Historical Perspectives on the Olympic Games (Waterloo, Ontario, Wilfrid Laurier University Press, 2007), pp. 309-323. 149 In reference to his first five years in office, and to the prior instability within the USOC’s management ranks, Blackmun observed: “I was lucky. I came in at a really good time. The bar, candidly, was pretty low. We set

45 as our two objectives coming in; one, we wanted to substantially increase our philanthropic revenue because we’re the only national Olympic com- mittee in the world that doesn’t get government support – at least in a developed country. And we really wanted to rebuild our relationships internationally … you know, I think it’s worked well.” A determined push was applied to the major gifts portion of its fund raising efforts. In 2009, the USOC brought in less than $1 million per year; as of early 2015, it has raised this figure to $15 million. “Interview with USOC CEO Scott Black- mun.” 150 Wenn, “IOC/USOC Relations and the 2009 IOC Session in Copenhagen,” p. 72. 151 Ibid.

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