How Los Angeles expects Olympics to turn a profit
Los Angeles — The Olympic Games have always been famous for lossing money, often adding debts totaling millions of dollars to host countries which were sure they had the necessary answers for a financially trouble-free operation.
So it's something like a clarinet screaming in an empty hall when Peter V. Ueberroth, president of the Los Angeles Olympic Organizing Committee, says that the 1984 Games here will show a substantial profit -- maybe as much as several million dollars.
But Ueberroth, who receives no salary for his 25-hour days, backs up his statement with explanations that are both businesslike and believable.
"The reason we are going to make a profit is because we will not be building an Olympic Village and because our costs are going to be paid for by private sponsors in exchange for promotional considerations," Peter said."For example, there won't be any repeat situations where a nation contracts for a $25 million facility and then, because of inflation and other facts, the price suddenly balloons to $65 million by the time it's finished."
"Instead we'll be housing the Olympic athletes in college dormitories that are already available, like those at USC and UCLA," continued the man who is also a member of several federal advisory boards. "We'll be using existing facilities [like the L.A. Coliseum and the Forum] for all but a few of our events. And in those cases where new construction is needed [like an Olympic-size swimming area], private sponsorship has already agreed to provide the necessary funding."
To make absolutely sure that L.A. Olympic costs are held in check, Ueberroth and his committee have hired two well-known accounting firms that will monitor all financial areas of the Games from start to finish.
"I don't mind admitting that we are paying these firms a considerable sum of money for their professional know- how, but we are getting results," Peter said. "Our cost projections, in some cases, include double and triple reserves for unknown factors, plus additional reserves for inflation. We just don't intend to make any financial mistakes."
Asked what effect the lack of a central Olympic Village might have on security. Ueberroth replied:
"The people who are studying security for us don't see any problems with the fact that our housing will be spread out. And we like the idea, because we think it will make for a more open Olympics. Athletes will be free to do whatever they want in their spare time, including wandering around our cities and discovering what America is all about."
although the United States is the host country for the '84 Olympics, the government will have no financial connection with the Games. Instead the Olympics will be paid for by fewer than 50 corporate sponsors. In fact, more than a year ago the Los Angeles city government passed a law that would prevent it from spending taxpayer's money to help the Games.
For example, McDonald's is investing some $4 million in a swim center that will carry the company's name rather than the traditional one of Olympic Swim Center. Sponsors also have the right to print Olympic symbols and logos on all their products.
"But this business of getting sponsors was not entered into lightly," Ueberroth explained. "We turned down a number of tobacco companies and other products that we didn't think quite fit the Olympic image."
Although it hasn't been publicized much, this will be the first Olympics in 12 years to have demonstration sports. Gaining acceptance from a list of eight under consideration were baseball and tennis. The six that didn't make it were softball, roller skating, bowling, table tennis, orienteering and badminton.
Qualifiers for the baseball competition are expected to come from the Pan American, European, and Asian Games, with the host-country US team being automatically included. The games will be played at Dodger Stadium, professional rules will be used, and teams will be allowed to use a designated hitter.
No site has been picked yet for the tennis competition, but a new stadium on the UCLA campus is expected to get strong consideration. Eight qualifying competitions will be set up throughout the world to narrow the draw to 16 men's and women's singles players, plus 8 men's and women's doubles teams.
If baseball and tennis generate enough worldwide attention as demonstration sports, there is an excellent chance they will be added permanently to future Olympic Games.