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A CONTRACT WITH THE KREMLIN
William Oscar Johnson
February 21, 1977
In a scene evocative of a treaty signing, Robert Howard of NBC (left) and the U.S.S.R.'s Ignati Novikov ended two years of foreign intrigue, concluding an $85 million TV deal for the Moscow Olympics
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February 21, 1977

A Contract With The Kremlin

In a scene evocative of a treaty signing, Robert Howard of NBC (left) and the U.S.S.R.'s Ignati Novikov ended two years of foreign intrigue, concluding an $85 million TV deal for the Moscow Olympics

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All along one of the Russians' most irrational demands had been for huge sums of cash to be paid two or three years before the Games. Recent Olympics have taken place in such a politically charged atmosphere that it was not unreasonable to fear that an international incident might cancel the Moscow Games, leaving the Soviets with the loot and TV with no programs. But the network executives were less afraid of losing money because of political disruption—after all, in a tightly controlled country like the U.S.S.R., the chances of disruption are slim—than because of an old-fashioned business reason.

Though the networks would have no problem raising the money, an enormous amount of interest would be lost if millions of dollars were tied up over such a long period. Arledge figured that if the $50 million for facilities was paid on the timetable the Soviets demanded, $17.5 million in interest would be forfeited.

Along with the ruinous pay schedule for the equipment, the Soviets had decided to hold an auction to sell the actual rights to the Games. In effect, the $50 million was merely an admission ticket to the final round of bidding. Arledge recalls, "Their plans involved an unending series of bids that went on as long as two guys were able to stand. There was a new sealed bid every 24 hours. The winner would be announced, then the losers could up the ante by a minimum of 5%. That's when I made the remark about scorpions in a bottle."

Wussler was most shocked by the U.S.S.R. proposal. He had a letter with him from Paley reminding Novikov of their deal, and he asked for an audience with the chairman. They talked for 45 minutes. Novikov was stony. He told Wussler, "We are here to get the most money possible. That is our sole purpose. We need it for the Games." Wussler asked him about the agreement with Paley. Novikov replied, "It is a pity."

Wussler was appalled. He hurried to his hotel room. It was 4 p.m. Moscow time, 7 a.m. in the eastern U.S. He phoned Jack Schneider, president of CBS Broadcasting, at home in Greenwich, Conn. and told him that CBS' deal had collapsed. He suggested that Schneider contact the other networks and arrange a pool. Within two hours, CBS, NBC and ABC had agreed to file a brief with the Justice Department, asking it to waive the antitrust laws so the three networks could negotiate as a unified front.

Now it was 7 p.m. in Moscow, and the Soviets had decided to throw one last lavish supper before they put the three scorpions into the bottle. It was held in an elegant banquet room of the Hotel Sovietskaya. The party was a mistake. It was the first time that the three networks had been brought together in the same room in Moscow, and they were seething. At this point, no one but Wussler knew that a pool was in the works. The others were shouting angrily about the crude and insulting tactics of the Soviets. Almost immediately there was talk of walking out en masse. The hosts stood against the wall, aghast at the uproar among the Americans. Lindemann says, "They had figured there was no limit to the manic competitive zeal of the networks. That was insulting, of course. But what bothered me even more was the fact that this wasn't just another ball game, this wasn't a spat with Bowie Kuhn or Pete Rozelle. This was the United States against the Soviet Union—and we just couldn't let this happen."

The next day, taking a page from the Soviet book on diplomacy, the Americans walked out. At a meeting attended by Arledge, Wussler and Howard, Novikov was impassive. He told them, "If any of you leave Soviet soil on this day, you will never, never be allowed to return." The three said they had no choice. After leaving Novikov's office, they promised to leave the U.S.S.R, and they showed each other their airline tickets as a display of good faith.

Arledge had earlier made an appointment for a private session with Novikov. He decided to keep the date. "I was bound not to negotiate," says Arledge, "but I didn't think Novikov understood. He said he would make a deal with me right there on the spot. He said the Olympics were mine. I told him I couldn't take the Olympics at that point if he gave them to me for five million."

A few days after the networks left, the Soviets announced that the rights now belonged to a mysterious fourth party, an American trading and manufacturing company called SATRA, which does a lot of business with the U.S.S.R. This move was—and still is—seen by most network men as both a threat and a face-saving move by the Soviets. But SATRA apparently took it seriously and has filed a $275 million suit against NBC for interfering with its agreement with the Soviets.

Back in Manhattan, each network pledged to have no contact of any kind with the Soviets while the Justice Department considered the pool waiver request. However, Bock was still loose in Moscow. When the networks departed, he was shaken. Technically he was not a network employee, but he still had his contract with CBS. Soon Bock got word to Wussler that Novikov was sorry, that the Soviets wanted CBS to please come back. Then Novikov wired Paley, saying, in effect, that the U.S.S.R.- CBS deal was still on. Meanwhile, Bock continued to negotiate.

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