SBJ/January 7 - 13, 2002/Marketingsponsorship

Relative lack of government cash seen as vote-loser for prospective U.S. sites

With four American cities poised to bid for the 2012 Olympic Games, one longtime observer wonders whether they know what they're up against.

The fact is that while the United States' private sector continues to underwrite the worldwide Olympic movement, U.S. cities will probably have an increasingly difficult time persuading members of the International Olympic Committee to place the Games here, Olympics historian John MacAloon says.

"The issue remains of paying for future Games," said MacAloon, associate dean of social sciences at the University of Chicago. "There are quite a few IOC members who are on record saying they will never again support a host city that does not offer significant government support."

MacAloon said that "given the reticence for support of large taxpayer subsidies related to the Games," no U.S. bid candidate can promise the nearly unlimited federal backing that existed leading to the 2000 Games in Australia, or that is the foundation of 2008 Games preparations in China.

On one hand, U.S. politicians defer to taxpayers by saying the Games should be privately financed to the largest extent possible. On the other hand, the public at large disapproves of commercialization by the same corporations who are expected to sign all the checks.

"We create a circumstance in which the Games become ruined in order to give private sponsor corporations a return on their investments," MacAloon said. "Or, as in the case of Atlanta [in 1996], you have a situation where the city of Atlanta organized against the organizing committee and turned the whole thing into a flea market."

The four U.S. candidates for 2012 — Houston, New York, San Francisco and Washington — were required to verify $200 million-plus guarantees against budget shortfalls. But safety nets are not upfront subsidies.

Meanwhile, MacAloon is irritated by the hand-wringing over federal government funding of the Olympic Winter Games in Salt Lake City. The U.S. General Accounting Office in November reported that federal funding will be $342 million, or 18 percent, of the "total direct cost." More recently, Sports Illustrated published an investigative report projecting that $1.5 billion has been poured into projects in Utah because of the Games.

"This goes back to 1984 when [Los Angeles chief organizer Peter] Ueberroth tried to convince everybody there was no government support of the L.A. Games, when in fact we know it was somewhere between $90 million and $120 million," MacAloon said.

"You can't find any serious sports economist who would tell you we have an agreed-upon formula [for calculating federal expenditures on hosting the Games]. No responsible sports economist takes either official reports or Olympic organizing committees ... seriously."

Racine might face on-air
questions from her former
brakeperson Jen Davidson
SCENARIO BREWS: Jean Racine, the U.S. bobsledder who fired her teammate and friend, and thus split up a marketing powerhouse in the making, might have a challenging media encounter on her horizon.

While Racine was on her way to winning the Dec. 23 Olympic trial and qualifying for the Salt Lake Games with a new brakeperson, ex-teammate Jen Davidson joined spectators at the Park City, Utah, bobsled run. Davidson was preparing for a pending assignment during the Games with a Salt Lake television station.

The first time Davidson and Racine speak to each other since the emotional split might be on camera.

POWER SHIFT: The appointment of Norway's low-profile Gerhard Heiberg as chairman of the IOC's pivotal Marketing and Television Commission ends a long, productive era of deal making between former commission head Richard Pound of Canada and global Olympic sponsors and TV rights holders.

Pound, who resigned last summer after holding the post since 1983, was at the center of the discussions with Dick Ebersol in the late 1990s that led to NBC locking up Olympic TV rights through 2008 for more than $3 billion.

With Jacques Rogge of Belgium winning election last July as IOC president, his selection of Heiberg resolutely shifts political power within the IOC to the Europeans. It also portends a long period of relationship building with TV network executives, and the 10 global sponsors (seven are U.S. based), by Heiberg, 62, the former head of a Norwegian oil rig manufacturer and president of Lillehammer's 1994 Olympic organizing committee.

Heiberg has been a senior energy executive since the 1970s, but he has little experience in sports business and, unlike Pound, was not an Olympian. Surprisingly, Heiberg was not a member of the IOC marketing and television group before being named its chairman.

Steve Woodward can be reached at SteveWoodwardHere@hotmail.com.

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