USOC struggles to polish its tarnished image

Image: Scott Blackmun
Scott Blackmun, CEO of the U.S. Olympic Committee, concedes he has an uphill battle. “USA’s brand internationally,” Blackmun acknowledged, “is not at its high point right now.”Ed Andrieski / AP
/ Source: contributor

On Jan. 26, a frozen, blue-sky, Colorado Springs morning, Scott Blackmun sat at a familiar desk atop one of the most volatile business enterprises in America.

At the United States Olympic Committee — the money and management wing of Team USA — the average tenure for each leader has, since 2000, spanned one year, five months, four days and six hours. Give or take. The first time Blackmun temporarily held the top post, early in the last decade, he didn’t even make it that long, just 11 months.

But in January, he was invited to return as CEO, and he accepted.

On his first day, Blackmun — a lawyer and the ex-chief operating officer of the Anschutz Entertainment Group — listened to a stark synopsis of the Olympic-sized challenges he inherited. During the past two years, the USOC angered NBC, its longtime domestic broadcast partner, lost sponsors Bank of America, Home Depot and General Motors, sullied its international status and was accused of boardroom bungling that, some said, caused Chicago to finish dead last in its bid to host the 2016 Summer Games.

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As stormy as business has been lately at the USOC, Blackmun heard that rugged recap and responded with talk of sunnier days ahead.

“I look at the fact that (in recent months) we’ve signed two new sponsors, Proctor & Gamble, and Deloitte. ... And I say to myself, there really is a lot of value in the Olympic brand. People are seeing that," Blackmun said. "It doesn’t mean that it’s not going to be a difficult process.”

One of Blackmun’s immediate tasks, he said, is to “be out there selling” the Olympic brand to prospective corporate partners — which have long comprised a healthy chunk of the USOC budget.

Ironically, it’s the USOC’s age-old revenue streams that have so deeply chilled some of Team USA’s most vital relationships, including its overseas standing with the International Olympic Committee — the umbrella organization that represents 205 national sports bodies and organizes each Winter and Summer Games.

“USA’s brand internationally,” Blackmun said, “is not at its high point right now.”

The USOC, a nonprofit, helps fund the 44 national governing bodies that field each American Olympic squad — from figure skating to table tennis — through three primary sources: an IOC revenue-sharing pact, domestic sponsorships and public contributions. The revenue-sharing deal stems from a 1978 congressional decision that granted the USOC exclusive rights to market the Olympic rings. That act, in turn, forced the IOC to ink a pair of then-necessary — now-unpopular — marketing and TV rights deals with the USOC.

Under those contracts, the USOC is guaranteed 20 percent of all global Olympic sponsorship money and 12.75 percent of the worldwide Olympic TV rights fees. The rest of the 200-plus Olympic countries divided the remaining IOC funding.

The IOC has recently pushed the USOC to restructure that arrangement, though both sides have mutually agreed to shelve further talks until 2013. Still, one IOC member — Denis Oswald from Switzerland — pointed to the lopsided revenue shares as one reason Chicago’s 2016 bid was handily shot down by an IOC vote.

Blackmun was asked if he will consider a new formula for doling out the international dollars.

“The USOC and the IOC have engaged in discussion on that topic for a while,” he said, “and it’s certainly not my intent to terminate or derail those discussions.”

The Chicago bid rejection stung the USOC hard. It also highlighted the organization’s embarrassingly high turnover rate. In the spring of 2009 — just five months before the IOC was to pick its 2016 host city — the USOC’s 11-member board abruptly dumped CEO Jim Scherr, who’d held the job since 2003, and replaced him with board member Stephanie Streeter.

The move surprised and troubled many U.S. Olympic family insiders, including the national governing bodies, which were not part of the decision. (Just one year earlier, Larry Probst, previously head of Electronic Arts, also had replaced Peter Ueberroth as chair of the USOC board). Swiss IOC member Oswald said the apparent coup atop the USOC showed “instability” and further marred Chicago’s chances.

Team USA’s athletes, past and present, were paying attention to all the leadership changes.

“It kind of feels like when your parents are going through a divorce; it’s challenging,” said Nikki Stone, who won a gold medal in inverted aerial skiing at the 1998 Nagano Games. “With a parent, you want them to put the child first. I think we’re finally getting to a place (Under Blackmun) where the athletes are going to be put first.”

“Scott’s a great choice. He’s going to do what a lot of people have been really asking the USOC to do,” agreed Skip Gilbert, head of USA Triathlon and chair of the National Governing Bodies Council. “I think having a larger voice for the NGBs is really appropriate.

“I look at General Motors as an analogy. Its focus is on selling cars. But GM couldn’t do anything with the consumer if it didn’t have the strength and input of the dealers. The USOC can’t really do much with the athletes if it didn’t have the collaborate effort of the NBGs,” Gilbert said. “That’s where the USOC ran into trouble the last few years. It had a top-down paradigm.”

Another change U.S. athletes would covet would be a return of the Olympics to America. The most recent home Games came in 2002 at Salt Lake. According to Blackmun, bringing the Olympics back to this country — perhaps in 2020 or 2024 — “is one of the highest long-term priorities.”

NBC Sports chief Dick Ebersol has said, however, U.S. cities won’t have a realistic shot at hosting the Olympics until the IOC revenue-sharing splits are reworked.

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When, and if, that deal is redone, the USOC will certainly look to recoup any loss in funding. Last July, the USOC revealed one possible solution, announcing the 2010 launch of a 24-hour Olympic network in partnership with Comcast. The channel would carry Olympic news, vintage footage and live competition — including, eventually, many of the team trials that determine who goes to the Olympics and who stays home. According to SportsBusiness Daily, the USOC would get between $30 and $40 million in annual advertising money from Comcast in exchange for channel distribution.

The Olympic channel also would give the USOC sponsors a daily advertising platform, smoothing the marketing ebb suffered in non-Olympic years.

“It was a way to keep the brand in front of the public year round,” said Howard Freeman, a sports marketing entrepreneur who heads the Promo 1 agency in northern New Jersey.

Again, however, USOC had committed an ill-timed political blunder. NBC, the USOC’s long-time broadcast partner, was openly displeased with the USOC’s decision to team with Comcast. And with the 2016 vote just months away, Ebersol even predicted that Chicago’s bid chances would be jeopardized by the move; moreover, the IOC had warned the USOC to table its announcement. For more than a year, NBC had been in talks with the USOC about combining its own Olympic channel with the USOC’s planned network. Those discussions broke off in April 2009. Now, Comcast and NBC Universal are negotiating a possible merger.

“The practical truth is the (Olympic channel) is on the back burner for us right now,” Blackmun said.

With sponsors exiting, with its favorable revenue-sharing splits perhaps about to shrink, and without a firm launch date for its own Olympic network, would the USOC contemplate seeking federal funding for the first time in its history? The USOC has long trumpeted its autonomy from Washington, D.C. while other nations, like gold-medal monster China, are boosted by their governments.

With a new boss in place, is it time for Team USA to take that step?

“I haven’t ruled out any source of revenue,” Blackmun said. “We are not actively pursuing government funding as we sit here today. But I think given the realities of the marketplace, we can’t afford to eliminate any revenue source without giving it some consideration.”