SBJ/April 7 - 13, 2003/Marketingsponsorship

Going hungry: USOC takes close look at spending and cuts awards dinner

A chorus of criticism targeting the U.S. Olympic Committee's spending habits has hit the recently announced 2002 athletes of the year. They will lose the traditional awards banquet accorded many previous honorees.

USOC officials decided several weeks ago to retract funding for a gala originally scheduled Saturday night in Fort Worth, Texas, in conjunction with the USOC board of directors meetings. For at least the past 15 years, the USOC typically has honored top athletes with a banquet featuring videotaped highlight packages, awards and speeches, although some years have been skipped.

"We are taking a close look at everything we are doing," said USOC chief communications officer Darryl Siebel.

The awards event apparently is a casualty of fiscal reform. This comes in the aftermath of ethical lapses involving former Chief Executive Lloyd Ward and subsequent public criticism of the USOC's accountability by CEO David D'Alessandro of John Hancock Financial Services, holder of worldwide Olympic sponsorship rights, and members of the U.S. Senate Commerce Committee. Ward's approval of a $50,000 relocation bonus paid to former chief marketing officer Toby Wong and his own travel bills (in excess of $150,000 last year) drew congressional outrage.

The acting head of USOC operations, Jim Scherr, said a campaign to reduce costs is being completed by senior management. Scherr last week told SportsBusiness Journal that jobs will be cut as part of a plan to lower operational costs from 23 percent of the annual budget to at most 20 percent, freeing up more money for athlete-related programs.

USOC officials declined to specify how much will be saved as a result of canceling the awards banquet. Honorees will be recognized during the regular board meeting.

FLY AWAY: In documents filed March 21 in U.S. Bankruptcy Court, the parent of United Airlines, UAL Corp., rejected sponsorship contracts with four U.S. Olympic sports federations — bobsled/skeleton, equestrian, speed skating and synchronized swimming.

The option to reject the contracts was granted United when it entered into Chapter 11 bankruptcy protection.

There is no indication United will sever its U.S. Olympic team sponsorship, a source of revenue for the airline because USOC officials and athletes fly exclusively aboard United. Its deal with the USOC expires at the end of 2004.

ICY OUTLOOK: Television rights negotiator Eddie Einhorn is back in the fray on behalf of the International Skating Union, which has been warned to expect resistance to any rights fee increase from current TV partner ABC/ESPN when its contract expires at the end of 2004. In fact, published reports indicate ABC may seek a 75 percent reduction.

With ratings for televised skating in decline and the ISU facing increased scrutiny of its competition judging system following last year's Olympic skating scandal, Einhorn, the Chicago White Sox vice chairman, has a challenge on his hands. Under its current four-year deal, ABC pays $20 million to $22 million annually for rights to the world championships and a series of Grand Prix events.

If ABC is the lone major network bidder for a new U.S. right deal starting in 2005, the door could open for a counterbid by a cable venture called The Ice Channel, a proposed 24-hour skating network championed by former agent Michael Rosenberg and several former CBS Sports executives, including Jay Rosenstein.

Ice Channel representatives met with ISU President Ottavio Cinquanta in Washington during last week's world championships. The Ice Channel was scheduled to debut this October but that target might be pushed back by tepid economic conditions.

ICY RECEPTION: Amid growing suspicions about the ISU's commitment to reform, a group of retired Olympic figure skating stars and disgruntled international judges last week introduced the World Skating Federation at a Washington news conference. The event was intended to attract media assembled for the ISU world championship.

The splinter organization charges the ISU is conflicted by serving two sports, figure skating and speed skating, and has no interest in judging transparency. But to gain acceptance and challenge the ISU's control, the splinter group will have to convince the International Olympic Committee, sponsors and television rights holders to shift financial allegiances.

"No one really knows what goes on inside the ISU," said Paul Wylie, a 1992 Olympic skating silver medalist and Harvard MBA who is one of the WSF's supporters. "There is no transparency, accounting-wise. We have a steep climb ahead, but I do not believe the ISU can heal itself."

Cinquanta's reply to the WSF threat: "We are not afraid. We do not fear."

RING TOSSES: Perhaps no one is more hopeful that the USOC recovers quickly from its scandal-ridden start to 2003 than NBC Olympics chairman Dick Ebersol. A recent survey indicates U.S. Olympic sponsors are a vital source of advertising revenue for NBC when it televises the Games. According to an industry source, the confidential survey found that 60 percent of U.S. sponsors advertised on NBC during its Salt Lake City 2002 telecasts, up from 51 percent during NBC's Sydney 2000 telecasts. ... Rowdy Gaines, a 1984 swimming gold medalist and network TV analyst, is going to work for USA Swimming as chief fund-raising and alumni officer.

Steve Woodward can be reached at swoodward@sportsbusinessjournal.com.

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