Can USOC get over Boston?

It wasn’t supposed to be this way for Team USA.

For years, U.S. Olympic Committee CEO Scott Blackmun and Chairman Larry Probst patiently laid the groundwork for a new American Olympics, only to watch as the Boston bid imploded over the course of six difficult months.

But here’s the thing: They rebuilt relationships with the International Olympic Committee and their own constituents so effectively that they’ve won a large amount of political capital and goodwill over the years — a much-needed chit as they determine their next steps amid a firestorm of criticism.

“I have been completely impressed with every effort that was made by the USOC and the people in Boston to give this thing the best chance of success,” said USA Gymnastics President Steve Penny, one of the chief critics of the failed Chicago bid in 2009. “It’s too easy to point fingers.”

The USOC’s mission, its defenders are quick to note, is far broader than winning a bid. Blackmun has repaired the committee’s historically fraught relationships with governing bodies, athletic performance has been strong and the IOC, broadcast partner NBC and sponsors are happy. Blackmun has presided over five years of organizational and financial stability after years of turmoil.

That all counts for a lot after the USOC board grossly misjudged political winds in Boston, leading prominent writers like USA Today’s Christine Brennan to call the Boston bid a “national debacle.”

IOC President Thomas Bach has encouraged the USOC to submit different bid city for the 2024 Summer Games. Photo by: GETTY IMAGES

The second chance is proof of how successful Blackmun and Probst have been in rebuilding relations with the Euro-centric IOC, experts said. The IOC doesn’t see the U.S. 2024 attempt as a failure … yet.

“All of this will be long forgotten if the USOC has a strong candidate,” said former IOC chief marketer Michael Payne.

But despite the encouragement from Bach, the U.S. must think very carefully about Los Angeles’ ability to assemble a bid quickly and its chances against a strong field of European contenders like Paris, Rome and Hamburg, Germany. Los Angeles was one of four bid city finalists, along with San Francisco and Washington, D.C., before the USOC selected Boston in January, and the city’s political leaders have eagerly jumped at this fresh opportunity.

The USOC has gone quiet since moving on from Boston and won’t comment again until later this month. But conversations with Los Angeles officials have restarted, a source familiar with the talks confirmed, and Blackmun remained stateside as Probst and two staffers attended the annual IOC gathering 9,000 miles away.

They have until Sept. 15 to submit a city, or decide to back off and consider bidding for the 2026 Winter Games instead. A final vote on the 2024 Games won’t occur until 2017. Some observers say the failure of Boston can be overcome but the USOC is operating with a thin margin.

“The bigger issue is the USOC cannot afford to enter into the ’24 race officially and then have a further mega-embarrassment after having lost with New York [in 2005] and having lost with Chicago,” Payne said.

Big challenge, big risk

Blackmun called bringing the Games back to the U.S. his biggest challenge in 2013, and that goal has guided tactical decisions throughout his tenure. Under that standard, the implications of the Boston failure are less easily dismissed amid the improvements.

“If my kid came home with an F, and the next quarter he came home with a D, I’m not sure I’d be completely happy with that,” said David D’Alessandro, former CEO of Olympic partner John Hancock Financial Services.

Hosting is a goal seen typically through a soft lens, more important to national pride and prestige than hard financial returns. The 13-year-and-counting gap between American Olympics hasn’t prevented the USOC from adding sponsors and growing revenue.

But that could change soon because of a deal the USOC struck with the IOC in 2012. Beginning in 2020, the USOC will get only 10 percent of increases in worldwide sponsorship revenue instead of 20 percent, and reduce its cut of increases in U.S. television rights from 12 percent to 7 percent. The USOC also agreed to contribute $15 million to each Olympics’ operational costs through 2020, and $20 million after that.

The USOC accepted those terms in 2012 to help repair its relationship with the IOC. Before the change, many in the international Olympic community thought the U.S. received too much of the IOC revenue, straining relations and hurting bid efforts.

“The management of the USOC may be taking a bigger risk than anybody quite understands,” D’Alessandro said. “They’re rolling the dice by saying, ‘We’ll never get the Games back to the U.S. unless we give up a large portion of revenue and make nice with Lausanne.’”

Harvey Schiller, former USOC executive director who also was Turner Sports’ first president, agreed that the apparent downside of the IOC revenue share could be made up by a domestic Olympics. The USOC was budgeted to receive $413 million from Boston 2024’s Games sponsorship sales, and the committee would keep part of any operating surplus as well.

“I wouldn’t use the ‘necessity’ term,” Schiller said. “It certainly would be an upside, but there are other vehicles and other ways to make up that difference.”

The real loss, Schiller said, is in prominence and visibility. Domestic Games, particularly in a large market, lure media and fan engagement at multiples of those held overseas, benefiting sport recruitment and marketing efforts for years to come.

The Olympic ideal

Team USA’s domestic partners are taking the bid struggles in stride. Several current sponsors, none willing to speak publicly, said they want the Olympics on their home turf but don’t consider it necessary to achieve their goals.

One partner praised the USOC for recognizing Boston as a lost cause before it was too late. Others disliked the headlines but ultimately felt the location of the Games in nine years had little bearing on their current strategy.

A sponsorship “relates to being part of the Olympic ideal and what it stands for in this country. That’s No. 1,” said Michael Lynch, former head of global sponsorship marketing at worldwide Olympic partner Visa. “And No. 2 is helping to enable the very best Olympic team, and the USOC has demonstrated a spectacular ability to provide a great, quality Olympic team.”

In the years since the USOC retrenched after Chicago’s failed bid, the committee added domestic partners such as BP, BMW, Deloitte, Chobani and many others.

“I don’t think this impacts what [Chief Marketing Officer Lisa] Baird is trying to do on the sales side at all,” said Tim McGhee, former AT&T executive director of sponsorships, who now heads consultancy MSP Sports.

Blackmun’s contract runs through 2016. If the U.S. team again wins the medal count in Rio, and Los Angeles is seen as a credible bid city at that time, expect his tenure to continue. USA Wrestling Executive Director Rich Bender said he has “total confidence” in the USOC to make the right choice about Los Angeles. Blackmun’s attention to the governing bodies has won him deep loyalty within the movement, Bender said, but the bidding system does need to be addressed.

Boston’s selection already was the result of reforms that eliminated a formal competition for finalist spots, as the USOC hoped to discourage lavish spending early in the process.

“Obviously, I think there’s an opportunity right here to evaluate the strength of our Olympic Committee specifically when it comes to the bidding process,” Bender said.

That means taking a much closer look at public opinion and subtle political dynamics in Southern California than they did in Boston, Schiller said.

McGhee summed it up with a sense of long-term optimism: “I continue to think it’s a matter of when, not if, the United States gets another Games,” he said. “Whereas if you’d asked me five years ago, I’d say we may not get another Games in our lifetime because of our fractured relationship with the IOC.”