Aug. 9 (Bloomberg) -- In 1894, when the French baron Pierre de Coubertin established the International Olympic Committee, historians believed, wrongly, that the ancient Greek games were strictly amateur and that athletes received no material rewards for their efforts.
Based on this misunderstanding, Coubertin decided that the modern games were to be strictly separated from “sordid” commerce. For the next half-century, the IOC interpreted the amateur code so strictly that collegiate athletes who received as little as $5 for an article published in a local newspaper were considered professionals. Jim Thorpe, the American-Indian winner of the pentathlon and the decathlon at the 1912 Olympics in Stockholm, was stripped of his medals when it was discovered that he had played semipro baseball while a high-school student in Pennsylvania.
In this era, interpretations of the IOC’s amateur rule were so bizarre that army officers were allowed to compete in equestrian events while enlisted men weren’t. It was assumed that enlisted men needed their military pay while officers, like all true gentlemen, did not.
It hardly needs to be said that all the athletes who traveled to Athens in 1896 to compete in the first Olympics paid their own way. (J. P. Boland, an Irish tourist who happened to be in Athens, encountered a German traveler, Fritz Traun, and recruited him as a partner in tennis doubles. They defeated a pair of Greeks, 5-7, 6-4, 6-1.)
At the first games, and for another 60 years or so afterward, Olympic organizing committees financed the games with government subsidies, which varied greatly from venue to venue, and with ticket sales. The IOC itself -- which was based for many years in Coubertin’s mansion in Lausanne, Switzerland -- had relatively few expenses, which was fortunate because its sole source of income was membership dues (seldom paid on time).
During his long presidency of the IOC, from 1952 to 1972, the American businessman Avery Brundage waged a relentless campaign against the commercialization of the games. Competitors who derived any income, direct or indirect, because of their athletic prowess were stripped of their eligibility. Cash-strapped champions who pawned their medals abandoned all hope of future competition. Small wonder that Brundage was derided by hapless athletes as “slavery Avery.” Brundage was so fanatical that he lamented the IOC’s sale of television rights to the Tokyo Olympics in 1964 for $600,000.
All this began to change when Avery was succeeded by Michael Morris, a jovial Irish journalist who was also the third Baron Killanin. Killanin sought what Brundage had shunned. He realized the sale of TV rights was the IOC’s key to wealth, and for the rights to the Montreal Olympics in 1976 he charged ABC $25 million.
During the presidency of the Spaniard Juan Antonio Samaranch, from 1980 to 2001, the organization’s coffers kept growing, thanks mostly to the canny Canadian IOC member Richard Pound, who was put in charge of negotiating television rights in 1978. For the American broadcasts of the summer and winter games of 2004, 2006 and 2008, NBC committed $2.3 billion.
Samaranch oversaw two other major evolutions in the commercialism of the games. The first was that amateurism expired with comparatively little controversy. The international sports federation governing basketball voted in 1989 to allow professionals to compete in the Olympics. In the Barcelona games in 1992, this enabled the “Dream Team” representing the U.S. to include Michael Jordan, Magic Johnson and Larry Bird. (What Jim Thorpe might have made of this we’ll never know.)
The second was the use of sponsorships. In the mid-1980s, the IOC had become uneasy about its economic dependence on the sale of television rights, and Samaranch realized that the sale of sponsorships offered a solution. The IOC forged an alliance with ISL, the Switzerland-based company owned jointly by the German entrepreneur Horst Dassler and the Japanese advertising agency Dentsu Inc. The initial agreement, signed in 1985, had generated $95 million by the end of 1988.
The nine multinational corporations that participated in the agreement, which became known as TOP I (The Olympic Program I), grew to 12 for TOP II. Eight of the original nine continued as “worldwide sponsors” (including Coca-Cola Co. and Visa Inc.) and four new ones joined the program. Top II raised some $175 million. Top III reduced the number of sponsors but introducted “Olympic suppliers” such as Mercedes-Benz. For the IOC, the money kept pouring in. (The final tally for London 2012 is yet to be determined.)
National Olympic committees have also entered the sponsorship game. The U.S. Olympic Committee boasts 11 worldwide sponsors, plus 21 domestic ones. That foreign companies such as Panasonic Corp. are USOC sponsors is proof, if any is needed, of how economic globalization is shaping the games’ finances.
Contrary to Coubertin’s desires, Olympic competition has become increasingly nationalistic -- but Olympic commerce has become international and will unquestionably remain so. South African gold may or may not be a good investment, but athletes who win Olympic gold can earn millions of dollars from endorsements. And they don’t even have to pay their own way to the games.
(Allen Guttmann is the author of “The Olympics: A History of the Modern Games” and “Sports: The First Five Millenia.” The opinions expressed are his own.)
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