September 12, 1996
McGill's master of the rings
Interview by Sylvain Comeau
Montreal lawyer Richard Pound, chair of McGill's Board of Governors, is also a vice-president of the International Olympic Committee. In a recent interview, Pound, a former Olympic athlete himself (an experience he has called "like dying and going to heaven"), discussed the Atlanta games and gave some insights into the past, present and future of the world's most prestigious sporting event.
- Why have you dedicated so much time to the Olympics?
- When I was a swimmer, there were a lot of people who put in hundreds of hours helping me get to the top of that heap. Once I stopped competing, I felt very strongly that I had a debt, and you want to put more back in than you took out.
- What is your role at the IOC?
- I chaired the Centennial Working Group, and I chair the Centennial Coin Program, Television Negotiations Committee, New Sources of Finance Commission, Marketing Coordination Commission (which handles international sponsorship), and maybe some others. These are all ongoing.
- Aside from TV contracts, what are new sources of finance?
- About 13 years ago, we realized that 90% of our income was coming from television, and of that, 90% in turn was coming from the U.S. We really had all our eggs in one basket, and as a financial model, this is as close to insane as you can get.
So we formed the New Sources of Finance Commission to explore sponsorship, licensing, things like that. Over the years, we've done quite well in balancing the revenues. For the '93-'96 quadrennial, we came out to about 50/50 between television and other sources of revenue, and the proportion of television revenues from the U.S. shrank from 90% to 50%. We're now on a much more stable financial base.
- How do you answer critics of the marketing of the Games?
- First I say that even if there is a lot of commercialism around the Games, the Olympics are still the only sporting events in the world where there's no advertising at the competition venues, and there's no advertising on the athletes themselves. The Olympics are unique in their pristineness.
The other answer is, what is the alternative? That usually brings people to a dead halt, because everyone knows that governments can't be expected to do all of it anymore. And if you put all the cost on the shoulders of the athletes, you then take a huge step backwards, by saying that only people who can afford to do it will ever have a chance.
The ideal is that people from all over the world participate based on their abilities, and we spend a lot of money making sure that smaller countries do get in. For example, in the 1980s we started a program called Olympic Solidarity which provides money to developing countries for scholarships for athletes, coaching clinics, teaching people how to put together organizations, basic stuff. A lot of people want to know; how do you run a national Olympic committee and a national sports federation?
That's grown over the years; we've probably put several hundred million dollars into it in the past decade. You have to look to the private sector for at least a portion of the funding, and unless you're looking for handouts, you're dealing with people who are investing business assets, and they have to get a return.
- Is it true that the city of Atlanta was competing with the IOC in terms of sponsorship?
- Yes, it was kind of an anomalous situation, in that the city agreed to allow a group to go forward and try to get the Games, but only on the condition that it wouldn't cost Atlanta a penny, and that Atlanta would benefit from all the infrastructure that would be built. Everyone agreed, and then when it became clear that it would be close to a break-even situation, it was very surprising to find the city--which was getting all this stuff for free--out there in the market, competing with the organizing committee for advertising and sponsorship dollars. The city was licensing street vendors who would sell Fuji film instead of Kodak, or Pepsi instead of Coke, and therefore providing a presence for companies who were not sponsors of the Games, and had contributed nothing to the development of the event.
It was a matter of some concern to the Atlanta organizing committee, and to us. We stopped some of it, but there was very active street vending, which was supposed to be outside the main Olympic area.
- Was that why IOC president Samaranch called Atlanta's games "exceptional" instead of "the best ever"?
- That was the sum of a lot of assessments, not just the commercial assessment. The other reasons were the transportation, the technology, the relationships with the city. Atlanta will have the legacy of a lot of good sports facilities, and having gotten a lot of volunteers and community activity going. I think it missed an opportunity to maximize the internationalism of Atlanta, but that was their choice. People could have come away thinking that Atlanta is the most exciting city in the world for tourism, conventions, or business, but they missed that chance because of the glitches.
- Aren't those glitches common for host cities?
- Yes, but they were perhaps more severe this time. We haven't done a post mortem yet, but the transport problems were because they didn't believe the warnings we gave them. Atlanta is a city of only 400,000 people. They're used to handling 125,000 in the downtown core, and they had to handle 600,000-700,000 per day. And the plans kept changing day by day, so you never knew which streets were open and where you were going.
- What are your recollections of the bombing?
- We had walked through the park half an hour before it happened, and back at the hotel I heard the boom. I looked out and said, "I don't think that was thunder." We went to bed and about 40 minutes later, I started getting calls from journalists. Around quarter to four, someone banged on my door and said we were having a meeting of the IOC vice-presidents and presidents. We were plugged into a conference call with the FBI, trying to figure out what to do, and decided that we couldn't allow the Games to be brought to a halt, so we decided to make an announcement to that effect, but flags would be at half mast and everyone would observe a minute of silence.
It was quite different from Munich, in which there were organized armed terrorists breaking into the Olympic village, and taking athletes and coaches, compared to a single bomb in a public place. You have to be careful in how you respond, but it's pretty clear that we did the right thing in not knuckling under to whoever this coward was.
- Will the Atlanta games break even?
- Certainly they will break even for us, the IOC. The Atlanta organizing committee might have a problem. We sold $900 million worth of TV rights for the games, and the rights belong to the IOC. We give 60% of that revenue to Atlanta. Then we have an international sponsoring program, and we gave Atlanta a third of that, about $100 million. We let them use the five rings to raise money from sponsors, on the basis of the Olympic designation. We charge them a royalty of 5% of what they make from those sponsors.
The question then is, what do the organizers do with all the money? In the case of Atlanta, they agreed to build a baseball stadium, configured for track and field, but reconfigured for baseball after the games. So they spent a lot on infrastructure; their worry about breaking even comes after spending about $500 million building things. I think they will break even.
- Is it fair to say that the Montreal Olympics still carry a debt?
- We wanted our metro extension, our highway extension, and a sports complex, not just for the two weeks during the games, but for the community as a whole and for years to come, so we borrowed the money. The big problem with Montreal is that we never separated the infrastructure budget from its operating budget. The organization, COGO, actually made about $135 million, a far bigger surplus, when you compare the size of the economies, than Los Angeles. But everything got lumped together, so the popular myth is that the Olympics cost us $1.2 billion. We were going to have all that new infrastructure anyway, just not necessarily in one shot. The construction might have been spread out over another two or three years.
- I understand the IOC is putting together an information package that will be transferred from one Olympics to the next.
- Yes, what we want to do with the accumulated knowledge and data of each Olympics is to take it, from whatever technical level it is, and transfer it to the next organizing committee, essentially free of charge. So we end up with a technical legacy building up over the years. Eventually, we will have all the results of past Games, all of the Olympic biographies of athletes who've participated, the history and rules of the sports, in a huge data base, with all the programming that enables results to be generated for the interface between broadcasters, press agencies, and various locations around the Olympics, all of whom will be able to receive and transmit data instantly.
- What was the highlight of these games for you?
- Several: the closing ceremonies, when you're just having fun and saying goodbye; presenting the medal to the 4x100 relay team, and giving the medals to the synchronized swimming team, and to Sylvie Fréchette--this time at the right time. And I usually present the medals in the swimming events I participated in.
- You've been mentioned as a likely successor to IOC President Samaranch. Does that job interest you?
- I think that's the chauvinistic Canadian media which is hoping that a Canadian might be in that position someday. I think every member of the IOC probably thinks about it, and fortunately we don't have to worry about it, because we have a president in office who's likely to stay there for another five years. So the time to think about it will be in five years. Meanwhile, I just enjoy it. When the phone rings, I never know if it's going to be legal work, McGill, or the Olympics. And that's great fun.