Eve of a New Olympics

By Tom Callahan

Capitalism has never been thought of as an Olympic sport before, so it is a little startling to look up and find that the flag under which the Games will be conducted all over Southern California next summer is the vest from a three-piece suit. In the most remarkable private business deal in the history of free enterprise, patriotism is seeing nationalism, and raising the bet outrageously. "It is akin to patriotism," says Dan Greenwood, a committeeman in the Olympic company, "but a patriotism of businessmen." Commercialism is not a bad word either, though some may disagree.

Growing so hugely expensive that they have been threatening to collapse under their own deficits, the Games have not been at such risk since A.D. 394, when the athletes' grumbling displeasure with olive-wreath prizes caused Roman Emperor Theodosius I to halt the competition in dismay for 1,502 years. Baron Pierre de Coubertin, a French idealist whose practical side was underrated, revived the Olympics in 1896 in the name of international amity but with a plea for fiscal sanity that is near to the heart of Peter Ueberroth, 46, the Olympian Cash McCall. For, in a way, this San Fernando Valley businessman-sportsman is starting the Games all over again too. "They must be kept more purely athletic," as the baron said, "more dignified, more discreet and more in accordance with the classic artistic requirements. The Games must be more intimate and, above all, the Games must be less expensive."

From nothing but "a cardboard box with $300,000 in debts, no employees, no phones, no plan"--actually locked out of its first office after a credit check--the Los Angeles Olympic Organizing Committee has burgeoned in four years to something greater than phenomenal. The L.A.O.O.C. plan: Don't build any sports palaces, refurbish the Memorial Coliseum. Spread the Olympic Village lightly over U.S.C., U.C.L.A. and U.C., Santa Barbara. Dot the megalopolis with stirring events. "We didn't have the three top sources of income available to all prior Olympic Games," Ueberroth (pronounced you-ber-roth) says. "The No. 1 income source has been government. We are putting on a private Olympics without government subsidies. The second source in Canada or the Soviet Union or Mexico City or Tokyo was Olympic lotteries. That's gone to us because it's against the law in California to have lotteries. The third is donations." Declining to cut into the take of every nonprofit organization in California, wanting to avoid local enmity by all means, the L.A.O.O.C. decided to refuse charity from anyone.

So it was a straight business proposition, and it began, as all sports ventures do today, with television negotiations. The record $87 million price that NBC had attached to the U.S. rights at the Moscow Games in 1980 seemed a lot, but apparently not to Movie Producer David L. Wolper, chairman of the L.A.O.O.C.'s TV committee. "Getting the Games does two things for a network," says Wolper. "One, it sells sponsorships and gets its initial investment back. But also, the Olympics has by far the highest rating during that period of July and August. So the network has the opportunity to publicize its upcoming programs." According to Wolper, ABC in 1976 jumped from third to first in the ratings war on the springboard of Montreal. "They used the Olympic Games to sell their fall season," he says.

Obviously, a domestic Olympics is the most desirable of all. Because the U.S. is host, several American teams that ordinarily might have difficulty qualifying--soccer, field hockey, team handball--are admitted automatically. The U.S. is also entitled to select "demonstration sports," and has chosen baseball and tennis. With American competitors in such abundance, Wolper thought $200 million would not be unreasonable. Outbidding CBS, NBC and an independent consortium that included Norman Lear, ABC paid $225 million. Including foreign rights, broadcast revenues should exceed $300 million, one-third of which goes to the International Olympic Committee.*

Many of the advertisers TV put the bite on had already been severely bitten by Ueberroth. In past Olympics, corporate sponsorships ran $150,000 to $200,000 at most and were something less than exclusive. Montreal associated itself with 168 official products; Moscow signed up 200. Ignoring everything Baron de Coubertin had said about dignity, the 1980 Winter Games in Lake Placid, N.Y., found 381 buyers for the Olympic label, including an official chewing tobacco. By contrast, the L.A.O.O.C. has held down the number of sponsors to 30, but the charge is a minimum $4 million for each (Lake Placid collected $9 million total), and in most cases that represents just a down payment.

"They also have to provide their services, if they have a service we can use," Ueberroth says. "IBM is going to do the computerization of the Games; AT&T is helping with communications." Since the L.A.O.O.C. had no need for hamburgers, McDonald's built the swimming pool, one of only two major new constructions. The other is the cycling velodrome, contributed by the Southland Corp., owners of the 7-Eleven stores. "We were told that only two facilities needed to be built, a swim stadium and a velodrome," says Southland Executive Bill Scott. "We wanted to build the swim stadium, but when we got back to the Olympic Committee we were too late. We thought about it and then told them, 'All right, we'll build the other thing. What do you call it again, a velodrome?' "

More than one foreign-car manufacturer arrived with a blank check, but Ueberroth concluded that would be "a bad signal" about the U.S. auto industry and held out for a Buick. On the other hand, when Kodak balked at the $4 million, the additional services and a third standard requirement--a commitment of some sort to sporting youth--the committee turned to Fuji film. If, like Anheuser Busch, anyone is uncomfortable with the sound of "the official beer of the Olympics," the phrase "a proud sponsor of the Olympic Games" is suggested instead.

The stipulation regarding youth programs tells something about Ueberroth, who, while discussing the $90 million ticket sale, seems most concerned that children join the celebration. Under an Olympic patron program, corporations putting up $25,000 for VIP seats are simultaneously sending 100,000 of the disadvantaged, disabled and elderly citizens of Los Angeles to the Games. Their bus guides will be former Olympians. Like the smallest details, the smallest events appear to bring Ueberroth the greatest delight. "In this center of swimming, cycling tickets sold faster," he says. "Synchronized swimming is sold out." The loot from 200,000 ticket applications is banked, and the customers will be notified by month's end which events are oversubscribed and will have to be distributed by lot. Archery has been an astonishingly hot ticket; judo, rowing and fencing too. "The best of anything is really exciting," says Ueberroth. "That's fun." Not surprisingly, the opening and closing ceremonies are sold out. They were to have been presented by Walt Disney Productions, but the Disney people demurred when Ueberroth insisted the company mind the budget and agree to pick up any cost overruns. Disney did create the Games' symbol and mascot, Sam the Olympic Eagle, a character considerably less endearing than Moscow's "Misha" Bear.

Though born in Evanston, Ill., and approving of Midwestern values, Ueberroth is the tan, blond picture of a Californian, spared from excessive good looks by an independent nose that breaks in two directions like a short putt with character. Peter, the boy athlete, incessantly played all of the games but never started for any of his high school varsity teams. At San Jose State, Ueberroth found himself a participant in the first water polo game he ever saw. What's more, he was on a scholarship. Just a respectable swimmer (a product of Y.M.C.A. summers, not the organized grind) but possessed of a rare enthusiasm for collisions, Ueberroth was recruited the morning of freshman registrations. "I doubt I would have ever finished college without that scholarship," he says.

For a traveling salesman's son who grew up on the move in Evanston, just north of Chicago, also Madison, Wis., Upper Darby, Pa., Davenport, Iowa, and a like number of California cities, sports represented a comforting denominator and familiar friend. Every competition pleased him. "When you write those high school things," Ueberroth says, "you know, 'What do you want to be?' I put down 'Coach.' "

So he was no star, more an all-around journeyman, like his father. Victor Ueberroth (the German name means "above the red," not to mention in the black), an unschooled but well-read drummer, sold aluminum siding to farmers for their wood barns. "You don't convince farmers with charm or fast talk," says the son, the second of three Ueberroth children. "My father had a great interest in people." And in events too. "We would debate world issues at dinner. Or he would toss riddles out on the table. It was mental gymnastics." Not only at Ueberroth's own table now (he and his wife of 24 years, Ginny, have three daughters and a son), but in the offices of the L.A.O.O.C. as well, the mental gymnastics continue. Staffers call them "Peter tests." Name the president of the I.O.C., or the site of next year's Winter Games, or the capital of Yugoslavia, or ten foreign cities of more than 1 million population that start with the letter M. "Your mind is like a muscle," Ueberroth likes to say. "You have to exercise it."

He was not a renowned scholar at San Jose State but obsessive enough in side jobs (pumping gas, selling children's shoes, tending a chicken farm) so that Ueberroth's friends predicted his eventual success (in aviation, travel, hotels) and ultimate wealth. His own itinerary: from ramp agent for nonscheduled airlines to office worker to office manager to 22-year-old vice president to failure out on his own to spectacular success, heading First Travel Corp., second only to American Express among U.S. travel giants. Ueberroth's method, besides having been bred for problem solving, might be described as a kind of enlightened stinginess. At the same time that he was lowering overhead by dumping high-salaried executives at the troubled travel bureaus he acquired in bunches, Ueberroth was offering stock incentives to the real workers and rewarding talent without prejudice. He turned over the charge of one agency to a man 72 years old; they prospered. "The two major companies I competed against didn't promote women the way I did," he says, "so I was able to attract talented women."

Until a Los Angeles-based executive-search firm fingered Ueberroth five years ago as the "one good man" the Southern California Committee for the Olympic Games had been seeking, his Olympic background consisted of an unsuccessful tryout for the U.S. water polo team in 1956 (Melbourne). During the Montreal Games in 1976, nearly cornered into observing his own family decree against summer television, Ueberroth had viewed the competition nightly with the sound turned down low in the darkened room of an elderly neighbor lady who was trying to sleep. He was such an unlikely proprietor of the Games that his reaction to the first feeler was laughter. He said no.

The S.C.C.O.G. is not a whimsical organization. It was formed in 1939, seven years after the original Los Angeles Olympics, by a group of local businessmen. Merely securing the U.S. bidding rights constituted an epic campaign: four times they lost out to Detroit. When the U.S. Olympic Committee finally endorsed the Los Angeles bid for 1976, Moscow at the last minute decided to make it a contest of superpowers, and Montreal was selected in a spirit of compromise. Though New York City in the early going made a lavish presentation for '84, by the late-1977 deadline Los Angeles was the sole applicant for the honor. Not just in the U.S.--throughout the world. The only other city thinking of bidding was Tehran. This was the state of the Olympic dream, a pipedream.

But then, hardly anyone for some time has regarded international athletic competition as a refuge from the troubles afflicting mankind. Probably since 776 B.C., but certainly since 1936, the summer of Adolf Hitler's Nazi festival, the games have been irresistible forums for social, racial and political causes (as well as a handy time for athletes from totalitarian states to defect). There was pause on the part of some countries as to whether they wished to party with the Third Reich. But the I.O.C. assured everyone that it had met with Hitler and "no one since the Greeks had captured the Olympic spirit so well."

Every four years since then, the world has come together to be pulled further apart in the only event that seems to matter: the international tug o' war. Munich in 1972 was a reprise of the Holocaust. Two dozen African nations, one full ring off the Olympic charm bracelet of continents, disengaged from Montreal in 1976 rather than associate with New Zealand, whose rugby team had scrummed in apartheid-infested South Africa. The U.S. and 35 sympathizers boycotted the 1980 Games in Moscow to protest the Soviet invasion of Afghanistan. With Americans currently enraged at the U.S.S.R. for shooting down a Korean airliner last month, and many U.S. arenas slamming their doors to traveling troupes of Soviet athletes, Moscow is being coy about its participation in Los Angeles. "Perverting the Olympic ideals," the triweekly newspaper Soviet Culture reports, "American Big Business has seized control of the preparations of the Games." The Soviets do not have to commit themselves until June 2.

Like the intrusion of politics, the hypocrisy of amateurism once was high in the criticisms of the Olympics. But the Americans have recently taken care of that by validating the bribes that U.S. athletes used to take from promoters and shoe manufacturers, and by instituting above-the-table "trust funds" that have turned the state-supported professionals of other countries into the poor relatives. The Olympics has many unseemly sides: jingoism, less than perfectly impartial officiating, drugs. But if there was a single scandal that narrowed the 1984 field to one, it was the cost.

What Montreal Mayor Jean Drapeau envisioned as "modest Games," budgeted for $200 million, turned out to cost about $1.5 billion and left behind a deficit of $1 billion. Moscow spent $9 billion. Emboldened by its position as the only suitor, the Los Angeles committee proposed to cut a revolutionary deal with the I.O.C. The citizens of Los Angeles have amended the city charter to make sure taxpayers could not be charged for the Games. So the I.O.C. would just have to waive its fundamental rule of awarding the franchise to a city and instead hand it over to a board of businessmen. Past I.O.C. President Lord Killanin, a sparky Irishman, sputtered in reply, "You may be the only horse hi the race, but you still have to cross the finish line." Once the private organizing committee and the U.S.O.C. jointly contracted to guarantee zero financial liability for the city, the face-saving technicality was agreed to all around.

The Games were tendered to a city as always, but not really. Oh yes, and the I.O.C. would have to surrender entirely its usual control over costs. This is what eventually intrigued Ueberroth. For $ 115,000 a year, about a 70% cut in salary, he accepted the presidency of the most awesome and diverse and fast-growing and quick-dissolving company in the world. Nine months into his new stewardship, he sold First Travel for $10.1 million. As of Jan. 1, he will become an unpaid Olympic volunteer.

Poring over the histories and financial ledgers of past Games in exacting detail, Ueberroth concluded that, minus construction costs, all of them would have been solvent. Of course, they might not have appeared as grand. But then, as he analyzes recent Olympics, "They have had two purposes: first, as a statement by a national government. The Germans were saying, 'We're a large, industrialized nation recovered from war. We are a friendly, outgoing world citizen.' The Canadians were saying, 'We are not the stepchild of the United States. We are strong and wonderful.' Certainly the Soviets said time and time again that the Olympics was the best example of acceptance of the world's largest socialist state. The second purpose has been as simply a sporting event for athletes of all nations. But that's our only purpose. We are not a nation and we have no statement to make. We are celebrating sport."

Naturally, not everyone is celebrating. Some of the world's playground directors feel ill at ease with this free-enterprise organization, finding it anomalous and annoying. However, except for a common dread of freeway traffic, and an occasional fearful word about smog, most have reacted with at least a cautious grace. Kosti Rafinpera, secretary-general of the Finnish Olympic Committee, says, "This is the first time the Games have been organized by a company, not a city. We're trusting that the Olympic spirit and the spirit of amateurism will be preserved." And many who have inspected the individual venues have cheered. "The facilities are extraordinarily good, among the best we've ever had, splendid," says Wolf Lyberg of Sweden.

"Conditions will be excellent," Austrian Heinz Jungwirth concurs, "but they do let us pay through our noses." Room and board in the Olympic Villages is priced at $35 a day (payable in advance), but organizational extras are expensive. One phone line for three weeks costs more than $600, and a parking sticker at the Coliseum goes for $350.

As uncomfortably as the International Olympic Committee reacts to any loss of control (in the I.O.C. offices, Ueberroth is known as "Peter Ueber Alles"), this must be nothing next to the embarrassment being felt around the national Olympic committees and international sports federations. The ones feeling the pinch are those very officious officials so plastered with pins and patches that they resemble their own steamer trunks. A certain amount of freeloading used to be traditional. French Committeeman Henri Courtine, an old Ueberroth acquaintance, says just a little ruefully, "He's the kind of man who succeeds in life. Sometimes, I must say, his way of doing things shocks people. We [Europeans] talk a little less about money, even if we manipulate it. His methods are based on efficiency. In Europe, we don't work that way."

Courtine's only specific lament, a reasonable and thoughtful one, pertains to the fragmented Olympic Villages. "The justification of the Olympic Games is to unite the youth of the world," he reminds. "With two Olympic Villages [three, in fact], some of the athletes will not be able to meet." The president of the original Southern California committee, John Argue, has a ready answer for that. It sounds somewhat brusque. "We invented the concept of the Olympic Village [in 1932]," he says. "We're disinventing it."

Alas, friendly neighbors are no certainty even in an Olympic Village. "They have to worry not only about separating Arabs and Israelis," says Committee President Isaac Ofek of Israel, "but what about all the other problematic teams--the Turks, Greeks, Chinese, Russians, Cubans? They'll do their best not to put the cats together with the mice." It would be a humorous image, if it were not so chilling.

"You can imagine," Ofek says, "that we spent our two weeks in Los Angeles going over every inch of ground. We sought out the person in charge of security [Ed Best, former FBI special agent] and had some in-depth discussions. We concluded that the arrangements could not be better. At Munich, the Germans were anxious not to give the impression that the athletes were living in a concentration camp. They went out of their way in that respect. Their security people did not even carry arms and the result was tragic--for the Olympics and for us. In L.A., it will be different, as far as we can see. I can't be too specific, but the communications equipment is first class. There will be fast, well-equipped vehicles always on alert, even helicopters, and most important of all, very good intelligence."

Cheerfully, he mentions another danger. Regarding Los Angeles' large Jewish community, he says, "Already they threaten to smother us with love. I've received dozens of invitations for the team to attend dinners, receptions, meetings. It's going to be a problem keeping our athletes in shape and concentrating on the Games with the kind of attention they're giving us." Another happy report of this sort is issued by Carl-Olaf Homen, a Finnish official: "One thing the L.A. Games has going for it is the great hospitality of the Americans. Last January, every single person in the visiting national Olympic committees was invited to dinner in a private home, and there were hundreds of people."

Something akin to this constitutes Ueberroth's ideal security, his best hope for a serene summer. He has noticed how proprietary New York City has become about its marathon and Fifth Avenue Mile, literally rejoicing in the street. "The people have embraced these events," says Ueberroth. "Spectators line up ten deep to cheer. And there's no trouble. It's like everyone in the city is saying, 'This is neat. Don't mess with it.' When a city decides that about anything, trouble tends to go south."

Referring to Los Angeles as one city is something of an oversimplification, as the most distant Olympic venues symbolize. The 23 sites describe an area of 4,500 sq. mi., ranging 84 miles north of downtown Los Angeles to Lake Casitas in Ventura County (canoeing and rowing) and 110 miles south to the Fairbanks Ranch in northern San Diego County (the endurance phase of the equestrian competition). Searching for a shooting site in what must be a wealth of sagebrush sounds uncomplicated. But Ueberroth almost ended up in Las Vegas. "We go out into a rural canyon somewhere," he says, "and all of a sudden there is someone living six miles down the road. Then the Sierra Club comes in and files suit because it affects the flight of the witchy-witchy bird. Not that I disagree. It's just what happens."

Without benefit of mass transit, anywhere from 400,000 to 600,000 daily visitors will expand the city's population to 3.6 million. California State Senator Alan Robbins says darkly, "The Games have all the potential of turning Los Angeles into the largest parking lot in the U.S." U.S.C. Futurist Selwyn Enzer foresees "a freeway system so clogged that motorists will think they are in a new Olympic event: demolition derby." And Police Commander William Rathburn says, "We can't rule out gridlock." But traffic planners stand by preparedly if still a bit anxiously with closed-circuit TV monitors, wire sensors in highway beds and a comprehensive game plan. Four hundred civilian traffic-control officers will join ranks with 450 traffic policemen. Buses will ferry spectators from near and distant car parks to the various sites.

Except for the shooting area, finally settled in San Bernardino County, every venue has been set up on schedule and under budget. Several have staged dress rehearsals and checked out smartly. The Atlantic Richfield Co. funded $5 million in improvements to the 60-year-old Coliseum (Olympic capacity: 92,516), including a state-of-the-art synthetic track of German-made red Rekortan. Lacking the three to five years for the soft surface to shake down, the committee has been vacuuming up excess granules.

As to the two new venues, both outdoor $3 million facilities, neither the swimming pool on the U.S.C. campus two miles from downtown nor the velodrome at Cal State-Dominguez Hills 17 miles away could be called opulent. Both are handsome. "It's for the athletes," says Aquatics Commissioner Jay Flood. "It isn't for the architects." This seems a perfect motto for the Games.

Flood is one of 34 commissioners, basically troubleshooters and budget overseers, Ueberroth's invention. Most are experienced entrepreneurs with conservative views about finances. "You know what team handball is, don't you?" Ueberroth asked Tom Megonigal before appointing Megonigal commissioner of team handball. "Sure," Megonigal replied, "four guys in a room hitting a ball off a wall." Actually, seven-man teams rampage up and down an indoor court larger than a basketball floor mistreating a leather ball about the size of a cantaloupe. Having seen it now, Megonigal and Ueberroth are both convinced that team handball is going to sweep the country next summer.

It is understandable that, given his preference, Ueberroth would choose team handball as the most provocative event of the summer. "Games get labels," he says. "Munich." Murder. "The Pan American Games in Caracas." Steroids. For all the planning preceding an Olympics, it is still a dice game: one throw. This is not an altogether unappealing feature.

Come July, 10,000 athletes and 2,000 coaches from 150 nations are expected in Los Angeles, along with 8,200 accredited members of the media, the largest force that has ever covered anything. If anyone needs a sheaf of copy paper, two freight-carfuls are ordered. Ueberroth's staff, which began as one, then became three, will have swelled to perhaps 45,000. A Los Angeles research firm estimates the Games will mean almost $4 billion to the state and local economy. The L.A.O.O.C. will have generated another billion in commerce and, while accepting no charity, will have promoted millions for youth organizations. If the most joyful ambition of the Games is realized, a 10,000-man-woman-and-child relay team of torchbearers will connect the country--from 1912 Olympian Abel Kiviat to retired Baseball Star Johnny Bench to the ordinary jogger in the street--and along the way $30 million could be the gain for youth.

Forty-three independent but "tasteful" licensees, peddling all manner of Olympic-embossed merchandise, are expected to return $20 million to the committee. If there is a profit on the Games, and the jauntiest guesses run to $50 million, the money will be shared by the U.S.O.C., youth groups and amateur sports federations.

To whatever extent future Olympic hosts will permit these transactions to be copied, Ueberroth is hopeful, like De Coubertin, that something of what he has learned will endure. Ueberroth swears that he does not wish to be President of the U.S. and does not even care to be baseball commissioner. Still, around this time next year he will be looking for another challenge of Olympic proportion. "I don't know if there is one," he sighs. "This is so much more difficult than anything you can imagine."

There are both charm and sadness in a job, one gigantic piece of work, that need be done only once, that can be done only once, and then it is over. On second thought, this time next year, Ueberroth and his associates will probably still be shaking, maybe tingling.

--By Tom Callahan. Reported by Steven Holmes/Los Angeles, with other bureaus

*So brisk have ad sales been, the network has hiked its fees twice, to an average of $125,000 per 30-second spot. Over 16 days, 187J4 hours of coverage is planned, the most for any scheduled event ever. Having also invested $90 million in the U.S. rights to the Winter Games in Sarajevo, Yugoslavia, ABC has already reached 98% of its $650 million winter-summer sales goal.

With reporting by Steven Holmes, other bureaus This file is automatically generated by a robot program, so viewer discretion is required.