Stanford Blum, the man who tied up exclusive rights to merchandise the Moscow Olympics in the Western Hemisphere, sat by his phone in Los Angeles yesterday, listening to the sound of $100 million going down the drain and dreaming of Bo Derek.
The running-shorts manufacturer from New York called to tell him J. C. Penney was canceling its order for Olympic skivvies. The gym bag maker in Pennsylvania had already stopped its assembly line. Levi Strauss was starting to worry about what to do with 6,000 Olympic outfits, specially size to fit weight lifters and gymnasts.
Many of the 58 companies that Blum signed up to make Moscow Olympic items were canceling orders and cutting their losses without waiting for the Soviet response to President Carter's Sunday ultimatum: If the Soviet troops are not out of Afghanistan within 30 days, the Olympics must be moved out of Russia or the United States will not participate.
"Everything is on hold," said Blum as he assessed the likelihood of losing his Olympic gold mine. "But I'll survive I've got Bo Derek."
The right to plaster the picture of the star of the movie "10" all over America is some consolation for Blum. But most other affected businesses would be hard pressed to make up for the hundreds of millions they would lose if the games are called off or the United states pulls out.
Multimillion-dollar advertising campaigns would have to be canceled and costly commercials thrown away. Merchandise marred by the image of Mischa, the Moscow Olympic bear, would have to be dumped at a discount. Most of the 11,000 sports fans who've made reservation for Russia probably would stay home.
The biggest loser would be the NBC television network and its affiliated stations. NBC paid $87 million for the rights and facilities to broadcast the games from Moscow.
A Lloyds of London insurance policy will pick up 90 percent of the network's out-of-pocket costs if the games are canceled or the United States pulls out, the network said.
But the insurance doesn't cover the estimated $150 million in advertising revenue NBC could lose. Charging prices that were sometimes twice as high as its usual rates, the network already had sold 87 percent of its Olympic commercials.
Local NBC stations get to sell about 20 percent of the commercials during the Olympic broadcasts. Big stations like WRC-TV, Channel 4 in Washington figured to collect $1 million or more for that service. Many of the local commercials are already sold as well.
All the advertising orders can be canceled if the Olympics are called off, Madison Avenue and executives said yesterday.
If the games are moved out of Russia or some substitute sports event is set up for teams that boycott Moscow, the network says it will switch its coverage.
Anything but a genuine Olympiad would be difficult to sell to sponsors, advertising executives say. Companies willing to pay huge premiums for ads on Olympic programs could demand discounts if their commercials are broadcast to a smaller audience.
NBC's whole fall programming plan could be thrown into chaos if the games are canceled. NBC president Fred Silverman planned to use the network's Olympic coverage as a springboard to vault Nbc into first place in the ratings race. New fall shows were to be previewed and plugged during the Olympic coverage.
In addition to the millions it will lose in Olympic advertising, NBC now may have to spend millions more to find other shows to replace the 152 hours of sports coverage. Building audiences for the fall season is too critical for Silverman to rely on summer returns.
Other big companies with strong ties to the Olympics face similiar problems. For Coca-Cola, Toyota, Miller beer, Gillette and Levi Strauss, the Olympics is more than just a lot of commercials, it is a whole-merchandising campaign.
Coca-Cola alone has an estimated $50 million budgeted for Olympic ads and promotions. Although the Soviet government has licensed rival PepsiCola to produce its product in the Soviet Union, Coke paid the Russians a huge sum to become the official soft drink of the Summer Games.
The administration is not expected to bail out businesses hurt by cancelation of the Olympics in the same way it did when President Carter canceled grain sales to the Soviets. The White House promised to buy all embargoed grain to protect farmers and grain companies from losses, but is not likely to pick up any leftover TV commercials or jogging shorts.
Gillette planned to spend about $5 million to keep its name before sports fans. "If it comes to that, we'll find somewhere else to spend the money," a spokesman said yesterday.
Levi Strauss not only is supplying uniforms for 6,000 Olympic athelets, it is counting on putting the same clothes on the backs of millions of ordinary, out-of-shape Americans. The casual clothes are part of a major campaign by the company to convert itself from being just a jeans-maker into a total clothing company.
Levi's clothes that have the Olympic symbol sewn on them will be shipped to stores, said a company press officer. But the special Olympic tags would be torn off if the games are canceled.
Much of the Olympic merchandise has already been manufactured and any that hasn't been, won't be, said Rick Rothside, whose Hardwood Sportswear makes Olympic pajamas and running shorts.
Rothside said he once figured to do $2 million in Olympic business, but now expects to sell little more than the $500,000 worth he has already shipped.
J. C. Penney canceled its running-short order yesterday, except for enough to fill orders from a catalog that has already been printed, he said. "If the U.S. pulls out, those goods are worthless," he said. "I don't think you'll find any manufacturer (of Olympic items) who has his machines making goods today."
Also unlikely to be produced are many of the 45 million to 50 million chickens the Soviet government planned to buy from American farmers and sell to tourists in Moscow during the games.
President Carter called in the chickens as part of his partial embargo of U.S. exports of grain and farm products to the Soviets. The government says it will buy about 5,000 tons of chickens that were already frozen and waiting to be shipped to the Soviets. But the rest of the eggs haven't been laid yet and probably never will be.