The Olympic Money Wars
TWO WEEKS from Friday, the stars of the winter sports world will take center stage in the ultimate festival of ice and snow: the 2010 Olympic Games in Vancouver, Canada. Among the 2500 expected competitors are U.S. fan favorites like figure skater Evan Lysacek, alpine skiers Lindsey Vonn and Bode Miller, speed-skaters Shaniani Davis and Apolo Anton Ohno, and snow-boarderer Shaun White. The world will be watching as they face off against athletes from around the globe.
But there’s one rivalry you won’t see televised. Beyond the slopes and behind the scenes, the United States Olympic Committee is caught in an ongoing dispute with the International national Olympic Committee. At stake is the USOC’s OC’s reputation— and funding for future U.S. Olympic teams.
One sign of the conflict was the IOC’s lopsided October vote awarding the 20166 Summer Games to Rio de Janeiro. The selection off that vibrant Brazilian city was not unexpected, but many had predicted a better showing for Chicago, Ill.—especially in light of President Obama’s trip overseas to lobby personally for his hometown’s bid. Americans viewed Chicago’s last-place finish as a slight to the President, but Swiss IOC member Denis Oswald called the elimination “a defeat for the USOC, not for Chicago.”
There have been other signs of friction, too. For some time, in an attempt to broaden public interest in Olympic sports, the USOC had been openly developing a plan for an Olympic cableTV network. “Low-profile sports need exposure; they need a branded home,” said Norman Bellingham, the USOC’s chief operating officer and a 1988 kayaking gold-medalist. In July, the USOC informed the IOC of its impending cable deal and then went ahead with a public announcement— only to meet with vehement protests from abroad.
“They just do what they want to do,” IOC finance-commission chairman Richard Carrion complained. Surprised at the negative reactions, the USOC quickly backtracked. “We will not move forward with the network until we have the full support and cooperation of the IOC,” Bellingham said.
Television is also at the heart of the primary dispute between the two committees. The IOC earns a great deal of its budget by auctioning U.S. broadcasting rights, but in theory the USOC could control these rights, since it owns the Olympic brand in the U.S. In exchange for allowing the IOC to broker the auction, the USOC receives 12.75% of the broadcast revenue. (Given that NBC paid $820 million for this year’s rights, the stakes are high.) The USOC also gets 20% of the IOC’s worldwide sponsorship income.
The IOC would dearly love to renegotiate these terms. And it may get the chance—Scott Blackmun, the new CEO of the USOC, has pledged to immediately open talks for a new deal. A revised agreement
A behindthe-scenes rivalry may affect future Olympians
would likely reduce the percentages the USOC receives from the IOC.
All told, the USOC helps field teams in 45 sports with less money than the New York Yankees spend on salaries alone. Its annual budget of $150 million is already less than estimated budgets for European rivals with smaller populations. Comparisons across borders can be deceptive, since individual sports raise additional money separately—some U.S. programs, such as skiing and figure skating, are flush with cash. But in small sports for which the USOC is the primary sponsor, the difference is clear. Former canoe/kayak director David Yarborough estimates, for example, that the U.S. budget for his sport is one-tenth of Britain’s, France’s, Germany’s, or Hungary’s. Most of the 205 Olympic nations provide government funding for their Olympic committees. The U.S. does not. A portion of the USOC’s revenue is from sponsorships, but more than half comes from its deal with the IOC, so any cut would be felt all the way down to the athletes.
Questions about federal funding have been raised recently. And in June, President Obama announced the formation of a White House Office of Olympic, Para-lympic, and Youth Sport, which may signal a change in the USOC’s relationship with the government. M OST OLYMPIC ATHLETES ARE too focused on training to pay attention to such political questions. And surprisingly, though it’s hard to find one who wouldn’t like more funding, even those in the “forgotten” sports express a certain affection for the status quo.
Consider U.S. speed-skater Nick Pearson, 30, who is scheduled to compete in the 500-and 1000-meter events in Vancouver. In November, when he was in Berlin for the World Cup, he was contacted for an
interview. He e-mailed back asking if it could wait until he was home. “It’s just quite expensive to have my phone turned on over here,” Pearson explained. Despite being a veteran of the 2002 Olympic team, he still has to buy his own skates.
Speedskating, biathlon, and kayaking could all be hurt by budget cuts