IOC Members Press USOC to Share the Wealth

The U.S. Olympic Committee is under pressure to renegotiate a controversial revenue-sharing deal with the International Olympic Committee or risk alienating IOC members who will decide next year whether to send the 2016 Summer Games to Chicago.

Since an IOC member last spring used the word "immoral" to describe the USOC's portion of a 12-year-old contract that guarantees it more sponsor and television money than the rest of the 204 national Olympic committees combined, the USOC has sought to pacify angry IOC members with some concessions while arguing that the deal is essentially fair.

The IOC's lead negotiator, Norwegian member Gerhard Heiberg, said he would like an agreement in six months that will assuage concerns about the deal, which guarantees the USOC a 12.75 percent portion of U.S. broadcast revenue and 20 percent of the IOC's top-tier sponsorship money. The other national Olympic committees also receive 20 percent of the sponsor revenue, but they have to share it.

Outgoing USOC chairman Peter Ueberroth said the USOC's slice of the Olympic pie is appropriate since U.S. companies generate about 60 percent of the IOC's total revenue. NBC's deal with the IOC for the U.S. broadcast rights for the Olympics is worth more than all of the other Olympic television agreements combined.

Unlike just about every other national Olympic committee in the world, the USOC does not receive government funding, which makes the money it earns from IOC revenue-sharing vital for U.S. athletes, according to Ueberroth. "We're going to begin to be sure the other 204 national Olympic committees at least know the facts," Ueberroth said. "Since we've been silent, we were being hammered by a few people who wanted to . . . recast the numbers."

Michael Payne, who directed IOC marketing efforts from 1983 to 2004 and was involved in negotiations for the current deal, said the arrangement has grown outmoded as non-U.S. Olympic sponsors and broadcasters assume a larger role in the IOC's financing. When the IOC began offering exclusive sponsorships in select categories to about a dozen companies in the 1980s, nearly all were based in the United States. Now, only half are.

"I don't think it's reasonable going forward for the USOC to continue to claim 20 percent of the top [sponsor] program when the rest of the world doesn't even get 20 percent," Payne said. "The days when the USOC said it was making a big sacrifice to sustain the rest of the world, that's no longer relevant."

U.S. officials counter that the majority of actual cash, as opposed to value-in-kind donations, still comes from the U.S. companies.

Canadian IOC member Dick Pound, the chairman of the IOC's marketing commission from 1988 until Heiberg took over in 2005, said the USOC's claim is bolstered because the U.S. market continues to drive up the price of all of the sponsor deals.

"Even now, it's still a stunningly important market," he said. "If you took out the U.S., my guess is the total sponsorship fees would be reduced by more than the U.S. takes."

The revenue-sharing dispute comes as the IOC is examining which city among Chicago, Madrid, Tokyo and Rio de Janeiro should be awarded the 2016 Games. That decision will be made by secret ballot in October 2009.

For the USOC, Chicago's presence in the 2016 race as well as its desire to have a continued voice in the Olympics make responding to the complaints critical. Yet U.S. officials say they also believe that standing their ground on certain economic principles is equally important both to satisfy Congress, which created the USOC in 1978, and ensure U.S. athletes remain adequately funded.