U.S. Olympic Committee weighs the highly charged option of government funding for its cash-strapped programs

By Amy Shipley
Washington Post Staff Writer
Thursday, January 14, 2010; D01

The U.S. Olympic Committee for years trumpeted its financial independence from the U.S. government. It still calls upon the old advertising slogan, "America doesn't send athletes to the Olympics, Americans do" in soliciting private donations. The organization likes to project the image of a bootstrapping U.S. team carried to the Olympic Games on a magic carpet of personal checks and hard-earned American dollars.

But the current recession and new leadership have brought a willingness to consider another vision: a government-supported USOC.

A topic once virtually off-limits is now up for discussion. USOC Chairman Larry Probst and other officials agree the organization's hazy economic future brings with it the responsibility of contemplating new sources of revenue, with possible government funding high on the list.

The issue, however, is rife with complexity, philosophical and practical concerns and differing views. Past and present USOC officials wonder about the potential impact of such a dramatic step on the organization's autonomy, and some fear a backlash from loyal private donors who annually write $50 or $100 checks because they believe their small contributions will help a struggling young athlete make it to the Olympic Games.

"There is a cost to doing business with the federal government," said Steve Bull, who departed late in 2008 after 18 years as the USOC's director of government relations. "You can't be naive."

There is also the practical question of whether the USOC could secure the backing of Congress and the White House, particularly after another round of management turmoil on the heels of Chicago's embarrassing first-round exit in the October selection for the site of the 2016 Summer Games despite a personal appeal by President Obama.

"I always said, 'You've got to deserve it,' " Bull said. "In the whole scheme of things, where are we in contrast to . . . name-your-issue?"

Flush times are over

Despite the concerns, USOC officials believe finding new revenue streams over the next decade could be critical to continuing the nation's traditional Olympic medal success. Chicago's defeat brought into focus the treacherous economic landscape ahead; the USOC, by all accounts, will stand on solid financial ground through the 2012 Summer Games in London, but it is living largely off lucrative contracts signed before the economy crashed, many of which are due to expire.

About 27 percent of the USOC's budget for the four years leading up to the 2008 Beijing Summer Games came from a record $2 billion U.S. Olympic television deal with NBC signed during flush times. Executives fear that figure won't be surpassed when the next television contract -- for the 2014 Winter Games in Sochi, Russia, and the '16 Games in Rio de Janeiro -- is negotiated next year.

Meantime, the USOC has lost a trio of sponsors -- Home Depot, General Motors and Bank of America -- since last summer, and though it has signed up Procter & Gamble and renewed with AT&T, officials say the Olympic rings are simply a more challenging sell in a miserable economy with no upcoming Games on U.S. soil. The organization laid off more than 10 percent of its staff last year; some of the smaller national sport governing bodies under its umbrella are struggling financially; and expenses related to travel, housing and medical insurance are rising.

"The fact that Chicago did not win the bid makes things a bit more challenging, but I still think there is ample opportunity to renew existing sponsorships and find new sponsors," Probst said. "We've also got to be looking for new revenue streams that didn't previously exist, and we've got to examine the possibility of government funding going forward."

The only government funds directed toward the USOC since it came into its current existence under the Amateur Sports Act of 1978 came in the form of a $10 million appropriation from Congress in 1981 to stave off bankruptcy after the United States boycotted the 1980 Summer Games in Moscow, and as much as $40 million in 2008 for Paralympic support for disabled veterans of the U.S. armed forces through 2012.

Despite the USOC's unique position, the International Olympic Committee is not exerting pressure on the organization to seek government support -- at least not directly. It has, however, in recent years hounded the USOC to renegotiate decades-old sponsor and television contracts with the IOC in a way that would, essentially, take future dollars out of the USOC's pocket and put the money into the coffers of other national Olympic committees and international sports federations, which contend the old deals are unfair.

The problem with redoing the contracts for the USOC is simple: Those deals represented more than 50 percent of the organization's 2005-08 revenue.

"The process is sitting down with them and understanding where they are coming from and, I hope, both of us being flexible as far as looking for solutions that meet both of our needs," said Scott Blackmun, who was named the organization's chief executive officer last week, replacing acting CEO Stephanie Streeter. But "as far as ceding money . . . I don't go into this thinking that's a foregone conclusion."

Fundraising efforts

Probst said he plans to take on the turbulent topic by initiating discussions at the Feb. 12-28 Winter Games in Vancouver. Meanwhile, Probst said, plans placed on hold last summer for a U.S. Olympic television network will eventually be revived and discussed with the IOC, and other novel digital revenue streams will be explored.

The organization also is getting back to basics with fundraising, trying to reach out more directly and personally to regular people and foundations. The $4.5 million the USOC raised this past June set a record for the month, and the anticipated total of $9.5 million from 800,000 Americans in 2009 was expected to set a fundraising record, according to USOC spokesman Patrick Sandusky.

Hein Verbruggen, an honorary IOC member from the Netherlands and former head of the international cycling federation (UCI), contends the USOC cannot move forward without sending a negotiating team to the IOC's headquarters in Lausanne, Switzerland, to discuss the sensitive deals, while also looking for government backing. That, he said, could help strengthen U.S. cities that bid for the Games while also helping to resolve the economic dispute.

"Always when you talk with the USOC people, they say . . . 'If the government gives money, there is scrutiny,' " Verbruggen said. "Why shouldn't there be? I don't understand the argument. . . . I think the government of the richest country in the world should be involved in" funding the U.S. Olympic movement.

Indeed, some U.S. officials say the biggest downside to government aid is the interference it might facilitate. Would a government official then require a place on the USOC board? In that case, would the USOC be facing unwanted intervention or welcome support and productive input?

"Our strength has come from being able to raise money on our own," said Donna de Varona, a 1964 Olympic gold medal winner who served on the committee that provided the blueprint for the Amateur Sports Act. "Government money always comes with strings attached."

Others say the USOC, which is often described as a quasi-government nonprofit, already has faced considerable oversight from lawmakers. The organization has been brought before Congress a number of times in the last decade to answer questions about national and international Olympic scandals or turmoil.

Some officials said the USOC needs more than government dollars; they said it also could use a better avenue for communication with the U.S. government, perhaps modeled on the "minister of sport" concept common in other nations.

The closest thing the U.S. government has on that front is, perhaps, Valerie Jarrett, who heads the seven-month-old White House Office for Olympic, Paralympic and Youth Sport, an office created when Chicago was in the midst of its quest for the Olympic Games, and intended to provide a White House link if Chicago won the bid.

Probst said he plans eventually to reach out to Jarrett, who declined to be interviewed, to get a sense of where the current administration would stand on a request for government dollars.

"You can make a good argument for both sides," Blackmun said. "At the end of the day, the USOC has been fortunate it's been able to raise significant amounts of money and privately support the athletes and national governing bodies. I believe we will be able to continue to do that, but I also believe it's not necessarily inappropriate for the government to support the U.S. Olympic team. At the end of the day, what does that mean in a broader context?"

© 2010 The Washington Post Company