"I believe that all Americans at a time like this must respond to the president of the United States when he makes a call. . . The U.S. Olympic Committee has a dual purpose, a responsibility to our athletes and to our country and our president in a time of emergency," said William E. Simon, the former U.S. Treasury secretary who now serves as treasurer of the USOC and is one of its most influential officers.
"I support the (president's) decision, It's tough. . . I don't view this as an injection of politics into the Games. I think it rises above that."
With that statement -- made the day after the International Olympic Committee rejected a USOC proposal that this summer's Games be moved from Moscow, postponed or canceled -- the politically savvy Simon did several things.
He helped lay the groundwork for the USOC to abide by President Carter's request without violating the IOC rule which states that national Olympic committees must be autonomous and must resist pressure from their governments. And he helped set up a future appeal to the federal government for revenues.
It is not true that Congress could vote the USOC out of existence, as has been suggested. The USOC is a private organization, legally constituted. However, Congress could revoke its federal charter, granted in 1950 and twice amended, most recently by the Amateur Sports Act of 1978, which granted the USOC umbrella authority to coordinate amateur sports in the United States.
In short, it could make life uncomfortable for the USOC, especially since there are organizations -- notably, the National Collegiate Athletic Association -- which begrudge the USOC its supreme position in American amateur sport.
Of more immediate concern, though, is the fact that opposing a presidential decision that has the backing of both houses of Congress and a majority of Americans could have disastrous consequences on Usoc fund-raising, which has been dwindling steadily in the last three months.
The USOC has a budget of $43 million for the quadrennial ending Dec. 31, and up to Jan. 1, fund-raising was roughly on target. However, revenues for the first two months of 1980, after the president raised the boycott issue, fell approximately $1.5 million below anticipated levels. If fund-raising were to continue at the current rate, the USOC would encounter a budget deficit of at least $7 million.
Only 8 percent of the budget was targeted for sending a U.S. team to Moscow, a message the USOC has desperately tried to get across to the public in appeals to keep the contributions coming. Since the USOC is committed to conducting Olympic trials in various sports, selecting and honoring a team even if it doesn't compete in Moscow, a boycott would not substantially reduce expenditures and revenue requirements.
Therefore, the USOC will either have to seek a federal subsidy to make up its shortfall, or cut back some of the ongoing programs that constitute 92 percent of its budget: operation of year-round Olympic training centers in Colorado Springs and Squaw Valle, Calif.; an ambitious new sports medicine program; $9.2 million in development grants to the national governing bodies of various sports for their grass-roots activities; the job opportunities program for Olympic hopefuls in training; the National Sports Festivals for American athletes in non-Olympic years, begun in 1978, and others.
"This is a very disturbing thing to me because over the last four or five years, we have broadened the responsibilities of the USOC greatly from where our sole responsibility was to select a team and send it to the Games. We have entered into a number of important, ongoing programs to enhance amateur athletics in this country," said F. Don Miller, a former Army colonel who as USOC executive director has built an outstanding staff and program under the progressive four-year presidency of Robert J. Kane.
"We're right at the zenith of that progress, we felt we were making great strides, so this boycott crisis hits at a very sensitive period -- particularly since many schools and colleges are facing budget retrenchments that affect the so-called emerging sports, and we were trying to take up the slack in developing these and providing opportunities for youth to participate in these activities," Miller said.
The USOC generates funds primarily in four ways -- corporate sponsorship, state fund-raising, direct appeals to the public ("America doesn't send athletes to the Olympics; Americans do"), and miscellaneous merchandising campaigns, including licensing and sale of Olympic souvenirs. All of these have been affected in varying degrees by the prospect of boycott. a
Most corporate agreements are long-term, encompassing the Pan American Games and Winter Olympics as well as the Summer Games. Since many companies have been using the USOC logo and affiliation in promotion and advertising for as long as three years -- for fees starting at $50,000 -- the Usoc doesn't expect many existing commitments to become uncollectible. Some corporations, though, have withheld payments the past three months. More alarming is the prospect that companies will look with a jaundiced eye on associating themselves with the USOC and the Olympics in the future because of the present problems.
State fund-raising campaigns have fallen off sharply. Banquets and other fund-raising events have laid eggs and been canceled. The New York state chairman, who anticipated six-figure revenues in February, collected less than $10,000.
"The majority of our state chairmen are having very, very difficult times in generating additional revenues," said Miller. There also has been a nosedive in the direct mail campaign that generally peaks from a month before the Winter Olympics until a month after the Summer Games. Revenues from the most recent appeal didn't cover mailing costs.
Most hard hit has been the marketing of Olympic souvenirs. The USOC expected to realize $1.5 million from the sale of coins commemorating the Moscow Games, but the program was canceled after proceeds of just $250,000. Only one-tenth of an anticipated $750,000 profit has been realized from sale of other keepsakes.
"The American public is turned off by the Mischa bears and everything else that was being retailed in this country with the logo of the Moscow games," according to Miller. Moreover some of the companies barred by President Carter's export embargo from shipping goods to Moscow had licensing agreements with the USOC that presumably will be void.
The largest American investor in the Games was NBC-TV, which contracted to pay $87 million in rights and facilities fees, and planned to spend $30 million more in production costs to provide 150 hours of coverage.
NBC is insured by Lloyd's of London for 90 percent of its $87 million outlay. Even though it has no way of recovering out-of-pocket expenses (estimated at $5 million to date) and advertising revenues lost, NBC has said repeatedly that it "will continue to be guided by the regulations and decisions of the U.S. government" -- a prudent business decision in an industry heavily regulated by a federal agency whose members are presidential appointees.
The one possibility that has network executives nervous, unlikely though it may be, is that the USOC would send a team to Moscow against the president's wishes, and the president would ask NBC not to televise the Games. In that event, NBC would collect no insurance and would take a $95 million bath.
"We could live with a decision not to go, but the uncertainty is excruciating," said one NBC executive. "We feel like we're walking through a swimming pool full of molasses, preparing every day without much hope that the preparations will ever be put to use." Not unlike the athletes in training for competition they will likely never experience.
Most other U.S. firms with heavy investments in the Games -- from travel agencies to gym bag and Mischa Bear manufacturers to Coca-Cola, the erstwhile official drink of the Games -- were either not alert to or unable to purchase "political insurance" of the sort NBC bought, protecting against the possible nonparticipation of Americans.
Most of the larger firms simply gave up their Olympic plans and promotions, and swallowed the attendant lumps in their cash flow. Thirty-five smaller companies -- some facing bankruptcy because their Olympic goods cannot be marketed -- have formed a coalition known as Olympic Boycott Recovery, and are appealing for a federal bail-out.
The USOC -- ironically, one of the few national Olympic committees that never has received a penny in government funds -- will likely join the federal "bread line."
When the Amateur Sports Act of 1978 was passed and signed into law, it was accompanied by a $16 million one-time authorization -- trimmed from an original request of $30 million -- for programs not directly related to sending a team to the Games. But none of this money was ever appropriated, and the authorization seemed destined for a procedural death this year.
Now, as part of its effort to reduce the financial crunch of a boycott on the USOC, the White House has included an appropriation of $4 million of this money in its 1980 budget request. Hearings are in progress before the appropriate congressional subcommittees, but no action is expected until after the Easter recess -- not coincidentally, about the same time the USOC House of Delegates meets.
The White House also has appealed to Americans to "continue their financial and moral support" of the USOC, but its real leverage is in the form of a carrot: future appropriations.
Miller hopes this is a silver lining -- maybe even gold, at current prices -- in the boycott cloud. He has said he thinks there is a chance Congress may eventually appropriate the entire $16 million authorization, and perhaps even increase it.
"I think, in the interest of amateur athletics in this country, we have to walk a fine line between 'selling out' to the government and governmental controls, and getting the funding we desperately need to enhance the grass-roots development of amateur sports," Miller said.
"I would always maintain that sending our teams to the Olympics must remain with the American public and their generosity in contributing. I would hate to see us come to the day when it was debated on the floor of Congress who would represent the U.S. in the Games: this constituent over that constituent. But in the ongoing programs we need to build and maintain a solid foundation of amateur sports, I would welcome federal assistance."