Deal clears way for U.S. to bid for Olympics again
A feud within the USOC helped end a long feud with the IOC
USOC chairman Larry Probst (l) and IOC president Jacques Rogge shake hands after signing a new revenue-sharing agreement between the two organizations Thursday in Quebec City. (Mathieu Belanger / Reuters / May 24, 2012)
It was five days after Chicago had suffered a humiliating first-round loss in the International Olympic Committee vote in Copenhagen for host of the 2016 Olympics. There quickly followed, unsurprisingly, calls for heads in the USOC leadership to roll.
"I’m not a person that backs away from a challenge," Probst told me after the sports federation CEOs gave a collective vote of no-confidence in both him and acting chairman Stephanie Streeter and called for both to resign immediately.
"And I’m not a person that runs from a fight. I think I can do this organization a lot of good."
Streeter resigned. Probst, founder and retired CEO of video games giant Electronic Arts, promised a full-time commitment to the unpaid, volunteer chairman's position.
And he has showed them - while helping the USOC end a self-imposed moratorium on bidding for an Olympics with the signing of a new revenue-sharing deal with the IOC.
Now the USOC can consider a bid for the 2022 Winter Games, which must be made by the middle of next year, or the 2024 Summer Games, which would be made in 2015. Given the current state of the U.S. economy, the 2024 option seems more promising, as it would be hard for any U.S. big-city mayor to get public support for an Olympic bid until the country has more economic confidence.
"We hope this has removed roadblocks to a successful bid for the U.S.," Probst said during a Thursday press conference in Quebec City, where the IOC executive board is meeting.
The feud within the USOC seemed like just another example of how it had become an international and national punch line. But the events of that fateful October day would both stop the snickering and begin the chipping away at the barricades.
Streeter's departure led the Probst-chaired USOC board to hire Scott Blackmun as chief executive two months later -- and Blackmun still is in the job nearly 2 1/2 years on, almost a record tenure over the last quarter-century for a organization plagued by leadership scandal and revolving-door CEOs and volunteer chairmen / presidents.
Then Probst and Blackmun began a rapprochement effort with the IOC that led to the official end of a seven-year revenue-sharing battle that had contributed to the lopsided defeats of both Chicago's 2016 bid and New York's 2012 bid.
Most of the world decried the U.S. share as excessive, no matter that it is the only national Olympic committee receiving no financial support from its government, no matter that the largest pieces (by far) of IOC revenues come from U.S. television rights and U.S.-based multinational companies.
Blackmun did a larger share of the negotiating. Probst, once discomfited by the idea of schmoozing IOC members, wound up doing much of the relationship building.
The situation had deteriorated to the point the USOC decided not to make any new Olympic bids until it was resolved. That undoubtedly was a factor in the decision to begin serious new negotiations with the IOC two years before the agreed-upon start date of 2013.
Probst expects the USOC board to discuss when -or if - to make a bid for either 2022 or 2024 at its next meeting in June.
Both sides described the agreement signed Thursday, which runs through 2040, as a win-win deal. Neither side would reveal details, but numbers first reported by the Associated Press and confirmed by the Tribune indicated concessions the USOC made to achieve peace were reasonable.
Under the previous agreement, which was open-ended, the USOC received 20 percent of the IOC's global sponsorship revenues and 12.75 percent of the U.S. broadcast rights fee. That provided more than 40 percent of the revenue in the USOC's quadrennial budgets.
Those percentages will not change until 2020. After that, the USOC will still get about the same revenue it currently receives but only seven percent on any increases in U.S. broadcast rights and 10 percent on increases in sponsorship money.
The revenue baseline will be determined by an amalgam of the monies received in both the current Olympic quadrennium, which ends this year, and the next two.
NBC has paid $4.38 billion for the rights to the 2014 (Sochi, Russia), 2016 (Rio), 2018 (Pyeonchang, South Korea) and 2020 Olympics (to be awarded next year; the IOC announced Wednesday that Madrid, Tokyo and Istanbul are the three finalists.) Many of the current sponsorship deals run through 2020.
The USOC also ended a dispute over what seems pocket change by comparison: a payment for "Games costs," which includes housing and transport of officials and some other logistical costs of staging the Games. After the USOC agreed to pay them for the current quadrennium, the new agreement formalizes payments of $15 to $20 million a quadrennium until 2040, with the increase occurring after 2020.
The irony behind Probst's role in the armistice and peace treaty is he had been inveigled into what he assumed was a part-time job by former USOC chairman Peter Ueberroth, whose confrontational rhetoric had exacerbated friction with the IOC. Probst had been chairman less than a year when the Chicago debacle occurred.
"I was a deer in the headlights in Copenhagen," he said later Thursday.
Even if these financial issues had been resolved before then, it was clear after the vote there was no way Chicago would have won, despite the quality of its bid.
With 20-20 hindsight, it was evident the path had been cleared for Rio long before.
When the IOC cut the field from seven to four in June, 2008, its own working group gave Rio only the fifth-best rating. It became a finalist when the IOC eliminated Qatar because the dates it proposed were outside those recommended. Soon after, the IOC dispatched a group of advisors to Rio to help the Brazilians improve the quality of their bid, under the pretense the IOC wanted to assure all four finalists would be capable Olympic hosts.
And then there was the matter of giving the Olympics to South America for the first time. When historians assess Jacques Rogge's 12 years as IOC president, which end next year, that will be the most significant item in his legacy.
That the vote for Rio also was perceived -- correctly - as partly a vote against the U.S. catalyzed the changes that have allowed Probst and Blackmun to leave a significant legacy for the USOC.