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American Green is Envy of Others

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TURIN, Italy — One day before the International Olympic Committee voted on where to stage the 2012 Summer Games, IOC officials were locked in a backstage test of wills with the U.S. Olympic Committee over the sports movement's most precious resource: money.

At issue last July in Singapore was how to split up hundreds of millions of dollars in sponsorship revenue over the seven years it takes to produce an Olympic Games.

Four of the cities seeking the 2012 bid, Moscow, Madrid, Paris and London, had reached agreement with the IOC months earlier.

But the USOC, the IOC and 2012 bidder New York struck a deal only minutes before an IOC-imposed deadline — and only after a series of tense, obscenity-laced meetings marked by "hardball negotiations," according to people with knowledge of the events.

The next day, London won the 2012 Games. New York finished a dismal fourth.

The behind-the-scenes events in Singapore underscored long-simmering tensions between the IOC and the USOC, which has traditionally enjoyed a notably large share of Olympic television and marketing revenues.

That special cut has pumped up USOC revenues. But people in U.S. and international Olympic circles say it also has undermined U.S. influence within the Olympic movement and fueled anti-American sentiment.

That not only helped to derail New York's 2012 bid, these insiders say, but also could color the selection process for 2016 if the U.S. decides to submit a bid.

Anti-Americanism helped boot baseball and softball out of the Olympics, they say, and could hurt the chances of U.S. candidates seeking seats on the IOC's executive board.

Officials say other factors also have played a role in recent USOC struggles. They include a lack of a coherent international relations strategy; the collapse just weeks before the Singapore vote of New York's West Side stadium plan; Major League Baseball's struggle with doping-related issues during the 2005 season; and the European domination of the IOC's membership rolls.

At the same time, said one senior IOC member, speaking on the condition of anonymity, "There is an anti-American feeling … there has to be an understanding the world has changed — it really is not 1984 anymore," the year of the triumphant Los Angeles Summer Games, headed by current USOC Chairman Peter Ueberroth.

While the USOC's fund-raising abilities and professional staff are the envy of other nations, the Americans are also "perceived as greedy and avaricious and not caring about sport and only about money," said a longtime Olympic insider.

Influential Olympic insiders elsewhere want the U.S. to receive a smaller share of marketing revenues, but the USOC maintains it is being a good Olympic citizen, settling for amounts far below what it could generate if freed to pursue marketing efforts on its own.

"The American dream is something that people appreciate," said Anita DeFrantz, the senior U.S. delegate to the IOC, a member since 1986. "And yet it can be something that angers people. That can be a part of what's felt as a current of anti-Americanism."

Ueberroth and IOC President Jacques Rogge have discussed these issues during face-to-face meetings, including one at IOC headquarters in Lausanne, Switzerland, in late November.

"In all families there are times when the different members do not agree 100% on everything — but what is important is that there exists a bond between the members, and a desire to work through the issues and find solutions," Rogge said in a statement. "This is certainly the case between the IOC and the USOC."

Ueberroth, interviewed recently at his Newport Beach offices, acknowledged what he called a "continuing friction" between the USOC and IOC.

"It's based on the misconception that the Olympic Games are a financial bonanza for the United States and that the United States takes more than its fair or proper share of the revenues from U.S. television and from sponsors," Ueberroth said.

He added, "I have a high degree of confidence that the Olympic leadership at the IOC is beginning to understand that we can grow the economic pie together substantially and the best way is through mutual cooperation."

A measure of how the Americans are viewed could come this week, when IOC members might vote on whether to reinstate baseball and softball, and on whom to place on the executive board.

Read the rest of the story by clicking here:

American Green is Envy of Others

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What a great, revealing article.  I always thought there was more to New York's 4th place loss in Singapore than just "it was Europe's turn once again."

And I am not surprised by these revalations.  Ueberroth is a hard-assed negotiator.  He had the IOC by the balls during the years leading up to LA-1984.  And calling the USOC 'greedy' by certain quarters in the IOC is like the pot calling the kettle black.  Without the huge dollar flows from the US, the IOC and the Olympic movement would still be counting pennies.

My stand is: the USOC is only fair in getting the 12.75% from TV rights revenues; but a little high on the 20% from the TOP sponsors' fees.  Perhaps, the USOC should only get 20% from US companies.  But after all this, the point is without US monies into the IOC purse, it (the IOC) wouldn't get fat.  

I can also see why the USOC has told the bid-happy US wannabe-hosts to cool their heels for awhile.  Until the IOC-USOC flap is settled amicably -- and that's why PU has threatened there may be no US bid city for 2016 -- and that's more a threat to the IOC than to the US cities -- if the IOC becomes too intransigent for negotiation.

I wonder if Peter knows I am running for 2009.  I might be able to help turn things around a little quicker.   :wink:

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Very interesting. It certainly puts Ueberroth's caution about a 2016 US bid in a different light.

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Very interesting. It certainly puts Ueberroth's caution about a 2016 US bid in a different light.

This article is certainly revealing and explains a lot.

The disturbing part to me is that these deals were being made with regards to the percentage that the IOC was going to get from the winner of the 2012 election?  What I read from this article is that London, Paris and Madrid offered more return to the IOC than the U.S. was willing to give so they ranked higher in the final tally.  So much for reform of the IOC.  Seems to me that unless a bidding city bows down to the IOC's financial demands that they are SOL.

Also kind of explains why New York went out in the second round.  I never expected them to win (just hoping) but for Madrid to place ahead of New York was puzzling to me.  This news, combined with other factors that I know were detrimental to New York's bid, kind of puts everything together.

Frankly, if this is how the IOC is going to operate I hope Ueberroth sticks to his guns and doesn't cave in to these ridiculous demands.  We provide the highest rate of revenue for the IOC, which without would put the IOC in a totally different financial situation.  The USOC brings in the major sponsorship and rightfully should be entitled to the percentages they are demanding.

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Exactly.  If Tanzania brought in 1% to the IOC coffers; then that's how much percentage return they should get back from any IOC bounty.  Seems only fair.

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Certainly the comments made by Ueberroth to postpone US cities excitment about 2016 make more sense, although I think that this was also a method of giving New York enough time to lick any wounds it may have picked up from the 2012 campaign as I'm sure New York must still be the favoured candidate by those with conections to the IOC.  Maybe "not biting the hand that feeds you" is a phrase that could be used to describe both the USOC and the IOC on this occasion.  

Also lets not get carried away with the idea that New York would have done significantly better without the funding debate in the background - Madrid had large numbers of support by those still loyal to Samaranch and hadn't had any stadium difficulties either.  It may or may not have polled more votes than Madrid, we'll never know.

It will be interesting to know how much the USOC's position changes when US sponsors are in the minority and Chinese (and possibly Indian) broadcast rights dwarf those of NBC, which will most likely happen over the next 20 years or so.  Perhaps some long term thought about getting the best deal for the future as well as a deal for the present it required.

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Certainly the comments made by Ueberroth to postpone US cities excitment about 2016 make more sense, although I think that this was also a method of giving New York enough time to lick any wounds it may have picked up from the 2012 campaign as I'm sure New York must still be the favoured candidate by those with conections to the IOC.  Maybe "not biting the hand that feeds you" is a phrase that could be used to describe both the USOC and the IOC on this occasion.  

Also lets not get carried away with the idea that New York would have done significantly better without the funding debate in the background - Madrid had large numbers of support by those still loyal to Samaranch and hadn't had any stadium difficulties either.  It may or may not have polled more votes than Madrid, we'll never know.

With regards to Madrid perhaps I should clarify.  I by no means meant to imply that this issue was the overriding factor.  The U.S.'s current worldwide reputation and the stadium fiasco were certainly factors - not to mention the last gasp of power than Samaranch still has.

But it does lead one to wonder, with as close as the final Paris and London vote was, how much influence the percentages played into London winning the games.  Now, I supported London barring a New York win so I am happy they won.  But supposedly after Salt Lake City the IOC was going to clean up it's act with regards to bribes, etc.  If this story is true it appears that they have found a way around that to keep filling up their bank account.

It also makes me wonder about Vancouver since they stand to reap a windfall from American and Canadian sponsors.  Was some sort of deal made by the Canadian Olympic Committee?

Just hypothesizing here.

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It will be interesting to know how much the USOC's position changes when US sponsors are in the minority and Chinese (and possibly Indian) broadcast rights dwarf those of NBC, which will most likely happen over the next 20 years or so.  Perhaps some long term thought about getting the best deal for the future as well as a deal for the present it required.

I've thought about this.  Unless there are like 8 or 9 Chinese companies in there, it's still not the same.  It comes down to the per capita income.  It'll still take maybe 2 decades or so for China's GNP/per capita income ratio to reach that of the U.S., and consequently attain the $80 million level its multinationals can afford this time (for a 2-game set); and what? $100 million in 2 years' time for sponsorship of a 3 Games-set?

India?  Maybe when the Games go to Delhi in 2020 or 2028.  But per capita again, they are dirt poor -- and it's the individual citizen's purchasing power of sponsor's products that will legitimize buying an $80-100 million sponsorship hole.

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But it does lead one to wonder, with as close as the final Paris and London vote was, how much influence the percentages played into London winning the games.  Now, I supported London barring a New York win so I am happy they won.  But supposedly after Salt Lake City the IOC was going to clean up it's act with regards to bribes, etc.  If this story is true it appears that they have found a way around that to keep filling up their bank account.

I'm not sure it will have influenced the final vote to much extent, Paris will have agreed to much the same sponsorship revenue percentage as London and if New York had managed to come third then London's winning margin would arguably have been even greater.

The major sponsors, once soley American, are beginning to appear far more international, this will likely continue.  I don't believe that we will see a completely Chinese sponsorship base but there will certainly be more Far Eastern and perhaps European multinational corporations interested in putting their names next to the Olympic rings.

I do see your point Baron that perhaps television revenue from China may struggle to meet US levels for many years as per capita income is far less, however, there are so many more people and therefore the possibility of having so many more television sets, so in time it may be able to compete even before they have reached the US's economic strength.

It is obvious though that the US will continue to be a major investor of the Olympic movement and probably is entitled to some reward for that.

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