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The $309 Million Games
William Taaffe
January 27, 1988
ABC still smarts over the price of the rights
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January 27, 1988

The $309 Million Games

ABC still smarts over the price of the rights

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The setting: an ABC-TV press conference, Nov. 17, 1987. The site: a Calgary warehouse that was rapidly being transformed into the ABC broadcast center for the Winter Olympics. The speaker: Roone Arledge, the founder of ABC Sports and the man most responsible for turning the Games. Summer and Winter, into a television institution.

Arledge, who left ABC Sports two years before to become president of the network's news division, kept clearing his throat and nervously rubbing the corner of his forehead. What, the press wanted to know, did he have to say about the price ABC paid for the rights to telecast the Calgary Olympics? Almost four years ago. Arledge had bid the astonishing sum of $309 million for those rights, more than three times the $91.5 million ABC had paid for the 1984 Winter Games in Sarajevo. "I don't know if I should use this word," Arledge replied, "but I'm going to, anyway. We were misled...."

Later Arledge explained what he meant by "misled." He said that as late as the morning of the day on which bidding for the Calgary Olympics began. ABC "had been assured" by Barry Frank—senior corporate vice-president of Trans World International, a TV marketing house, and an adviser during the rights negotiations to Olympiques Canada Olympics (OCO), the committee organizing the Calgary Games—that negotiations with the three major U.S. networks wouldn't end in an auction. "There was a breach of faith...," Arledge said. "The [bidding] process was ill-conceived, and I think the result showed it."

During the same press conference, Arledge and his successor as president of ABC Sports, Dennis Swanson, professed to be glad that their network had won the bidding for the Calgary Games—for the prestige—even though ABC management sources say the network will lose $20 million to $30 million on them. But as for the way the deal had been cut, well, there was still resentment in Arledge's comments.

According to Arledge, the person most responsible for the "breach of faith" was Frank, who reportedly earned a $2 million commission for his efforts. Arledge claims that Frank had promised ABC that when the bidding reached the level OCO hoped to attain, the real negotiations would begin and that ABC's traditional relationship with the Olympics—it had telecast 9 of the previous 12 Winter and Summer Games—would be taken into account.

Frank and International Olympic Committee member Dick Pound, who chaired the negotiations, dispute Arledge. There was nothing left to negotiate, they say, because weeks in advance of the bidding the three networks had signed identical 60-page contracts, agreeing to all details of the deal except the final dollar figure. "They knew that what was involved was, in essence, an auction." says Pound.

"There were no assurances, verbal or otherwise," says Frank. "What Roone Arledge is saying is redolent of sour grapes."

The bidding, held in the ornate Palace Hotel in Lausanne, Switzerland, began in an atmosphere of relatively good humor. Once the network executives were nestled in their suites on Tuesday afternoon, Jan. 24, 1984, Frank informed them of the most important ground rule: The bidding would be over when the IOC committee said it was. Whenever the committee wanted to go to a higher round of bidding, the networks would be informed of the minimum bid required to stay in the action. Each network would then have 30 minutes to deliver its bid in writing to the door of the hotel conference room where the committee was meeting.

Frank now says he limited the bidding to hard cash—there would be no dealing in the soft currency of favors—to assure fairness. NBC was particularly worried that Arledge might call in markers from the IOC. In fact, NBC's European representative stayed near the door of the conference room for 11 hours to make sure no one from ABC or CBS made a secret visit. Frank instituted a buddy system within the committee; no one from his side could leave the conference room—not even to go to the bathroom—unaccompanied.

Just before the bidding began at 2 p.m., each of the dozen committee negotiators bet $1 on what the final price would be. Frank was high man, with a figure of $287 million, and thus wound up the winner.

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