By David Owen

David OwenToday the Olympic Movement is well established as the most powerful, and one of the best-resourced, sports organisations the world has seen. But it has not always been that way.

Thirty years ago, political pressure and inept commercial management had weakened it to the point where its very existence was under threat. What then enabled the Five Rings to check out of intensive care and embark on the path to complete recovery? A few things, but one of the most efficacious tonics was without doubt the unexpected success of the Games the 30th anniversary of whose Opening Ceremony falls on July 28: Los Angeles 1984.

Earlier this year, insidethegames was privileged to be granted an extended interview by the man chiefly responsible for Tinseltown's unlikely Olympic triumph. Peter Ueberroth's personal Olympic odyssey took him from the lobby of a bank where he opened an account with $1,000 (£589/€745) of his own money to the cover of Time magazine. As a plot line, it might have been scripted by Hollywood. In the annals of sports business management, it is the equivalent of Diego Maradona's virtuoso performance - OK, minus the Hand of God incident - at the 1986 FIFA World Cup, or perhaps the barefoot Abebe Bikila winning the Olympic Marathon in 1960 in Rome.

LA 84 is remembered first and foremost as the private enterprise Games. Yet with much of 1978 spent haggling over whether the International Olympic Committee (IOC) was really prepared for the Games to be held in a city not willing to accept responsibility for any deficit, this did not at first have the look of a story destined for a happy ending. Still less so when, in January 1980, the Carter administration in Washington gave the Soviet Union a month to withdraw from Afghanistan. If it did not, the United States would boycott that summer's Olympic Games due to be held in Moscow.

An iconic moment of the Los Angeles 1984 Olympic Games Opening Ceremony ©Getty ImagesAn iconic moment of the Los Angeles 1984 Olympic Games Opening Ceremony
©Getty Images

The boycott by the US and more than 60 other countries, of course, went ahead. From this point, it was clear that Ueberroth, a successful but obscure travel industry executive by now ensconced as President of Los Angeles 1984, would face as big a battle to head off a tit-for-tat boycott by the Eastern Bloc as to raise sufficient funds from private companies to break even. This at a time when, as Kevan Gosper, a long-time Australian IOC member, has written "a financially viable Olympic Games was an aberration in the history of the Olympics".

Ueberroth is one of very few Americans who was in the then Soviet capital around the time of the Games, although he says he "politely respected our country's wishes" and did not attend any events.

"The IOC," he says, "respected our efforts and respected what our challenge was, to present an Olympic Games in a private manner, and were kind and didn't paint us with the Carter boycott...They understood that this was going to be a difficult task at best and that the worst thing would be to have no Games."

As he points out early in the interview, not only did Los Angeles 1984 get no Government money, it received no charitable donations either - though the Torch Relay, discussed later, raised money for other charities. Ueberroth explains that, having studied prior Olympics, such as the Montreal 1976 Games, which left behind a large burden of debt, it was noticed that they had "a second hit": charitable donations to hospitals and the like "went way down" because the money was donated to the Olympic Games. "So we thought to do it as a not-for-profit which does not accept donations."

When I ask him to nominate Los Angeles 1984's first big commercial breakthrough, he talks me through three.

What he calls a "coordinated effort" by Japan's Dentsu delivered three or four "terrific" sponsors. Fuji, the photographic company, turned into a particularly valued supporter of the Games.

The Coca-Cola deal was also very important, not only for its dollar amount. "They realised we had developed a plan to have many fewer corporate sponsors," Ueberroth says. "So every sponsor would have exclusivity for a category."

An ABC cameraman during the Los Angeles 1984 Games ©Steve Powell/AllsportAn ABC cameraman during the Los Angeles 1984 Games ©Steve Powell/Allsport

Writing in The Times in February 1984, David Miller, the eminent Olympic journalist, noted that: "By restricting sponsorship to 31 companies...Ueberroth has gained maximum benefit from General Motors, IBM, Fuji, Levi Strauss, Xerox and the rest, with an average commitment of £2.8 million ($4.8 million/€3.5 million)."

To put this into some sort of context, the former IOC marketing director Michael Payne wrote in Olympic Turnaround, his indispensable book on the business side of the Olympics, that Montreal "attracted the support of 628 companies, with 42 official sponsors paying an average of CAD50,000 (£27,000/$46,000/€34,000) each and generating a total of CAD5 million (£2 million/$4 million/€3 million) in cash and another CAD12 million (£6 million/$11 million/€8 million) in value in kind (products and services provided free) - just two per cent of the total receipts". Lake Placid, host of the 1980 Winter Olympics, "could only generate $26.5 million (£15.6 million/€19.7 million) in cash and $30 million (£18 million/€22 million) in value in kind from some 200 companies".

And then there was the deal with ABC for exclusive rights to broadcast Los Angeles 1984 in the United States, the Games' home market. At $225 million (£133 million/€168 million), this was a hefty increase from the $85 million (£50 million/€63 million) paid by NBC for US rights to the Moscow Games, and Ueberroth says it "set a standard for other negotiations".

Among the other television agreements reached, incidentally, was a $10.6 million (£6.2 million/€7.9 million) deal for the Australian rights with Rupert Murdoch's Network 10. "Murdoch did the deal himself directly," Ueberroth remembers, adding: "He has been a good friend since. He was the only guy I dealt with."

The lucrative deal with ABC though was one of the key areas where the worlds of commerce and politics collided for Los Angeles 1984. This was because of clauses in the agreement that would have triggered some form of refund in the event of a substantial boycott or disappointing ratings, or for that matter out-and-out cancellation. As Ueberroth suggests, this element of protection might have been one of the reasons why the fee was so high. "There was no charity on either side," he says. But it must have made the games of political brinkmanship that continued right up until June 1984 particularly nerve-racking.

Moscow pulled out of the Games on May 8, just as the Torch Relay was getting under way. Ueberroth recalls that this was at least convenient because he was with Juan Antonio Samaranch, the IOC President. When the Relay started, Samaranch remarked that it was raining, "but in France that's lucky". Says Ueberroth: "It was raining like heck on our parade there."

Los Angeles 1984 President Peter Ueberroth and IOC President Juan Antonio Samaranch at the Opening Ceremony ©LA84 Foundation Los Angeles 1984 President Peter Ueberroth and IOC President Juan Antonio Samaranch at the Opening Ceremony ©LA84 Foundation

Because as Ueberroth puts it, "We couldn't use our State Department", Los Angeles 1984 had developed its own liaison network around the world. They were known as envoys. When the USSR's boycott announcement came, they moved into action. Says Ueberroth: "They were everywhere within 24 hours".

The Los Angeles 1984 President himself acted as the envoy to Cuba. "Fidel Castro was a baseball pitcher. He loved sport. He received me very well," he tells me. "It was a close decision. We even agreed to house the baseball team in my home because security was an issue. We tried every darn thing. In the end the economic lever the Soviet Union had, he couldn't stand up to it. He told me the whole country would stand still when Cuba went to play the US in Dodger stadium." Cuba's absence deprived the great Cuban heavyweight boxer Teófilo Stevenson of the chance to win an unprecedented fourth consecutive Olympic gold medal.

There was better news from China, however. Ueberroth still remembers being woken up by a 3am phone call telling him that a full contingent of Chinese athletes would attend. This first appearance by China at a Summer Games since 1952, when just a single athlete competed, was one of the elements that served to keep both standards and international interest high, in spite of the absence of the majority of Eastern Bloc countries. "That was the first dart to blow the boycott out of the air," Ueberroth says.

Nicolae Ceauşescu's Romania also attended and finished second in the medals table with 20 golds, as did Yugoslavia, which had hosted the 1984 Winter Olympics in Sarajevo. In the end, the boycott was restricted to just 16 countries - insufficient, given excellent US ratings, to trigger any reduction in the television rights fee.

Carl Lewis of the United States celebrates after winning the 100 metres at Los Angeles 1984 ©Steve Powell/Getty ImagesCarl Lewis of the United States celebrates after winning the 100 metres at Los Angeles 1984 ©Steve Powell/Getty Images

Rain was not the only issue that threatened to affect the Torch Relay. The Games organisers had had to go to extraordinary lengths to get their hands on the Olympic Flame. This was because influential figures within Greece took a dim view of Los Angeles 1984's idea of selling relay slots for $3,000 (£1,700/€2,200) each to raise money for a number of charities.

"We said, 'Let's get the Flame from [the Winter Olympic host-city] Sarajevo,'" Ueberroth tells me. "They agreed to give us the Flame. Then the Communist party heard about it and forced them to renege."

Plan B, worked out in conjunction with the IOC's Monique Berlioux, was to have a party of French students visit Olympia and collect the Flame at the Temple of Hera as part of a project. The students brought the Flame back with them on a boat. Even then Los Angeles' problems were not entirely over. Says Ueberroth: "We found out you couldn't fly on a commercial flight with an open Flame. But you could on a cargo flight."

With one Flame safely in their possession, Los Angeles 1984 contacted Greece and notified them that if they were still prohibited from collecting the Flame officially in the usual way, they would simply use the one they had. "They said, 'You can get it, but we will not allow anyone into the stadium,'" Ueberroth says.

A contemporary report of the Ceremony in The Times said, "there was enough pageantry to preserve the tradition, but despite the presence of a senior Cabinet Minister, Greek participation in the Ceremony was evidently low key", with tight security measures barring the public for the day. A banner reading, "Olympia refuses to give the Flame" hung above the entrance to the sanctuary.

With television and marketing rights known to have raised a decent sum and capital projects restricted to a minimum, it was generally expected that the Games might make a small surplus, provided the knock-on effects of the boycott were not too severe. At an IOC meeting in West Germany in 1981, Ueberroth was quoted as saying that the committee hoped to make a small profit "to show that the Olympics makes sense again". Just after the announcement of the Soviet boycott, he similarly insisted: "We'll have a small surplus either way."

When after the Games, in September 1984, it was stated that the actual profit was more like $150 million (£88 million/€112 million), it was big news. Even The Times, hardly the most excitable of newspapers, referred on its front page to the "Bonanza Olympics". The piece was accompanied by a brilliantly economical Calman cartoon consisting simply of the sum $150,000,000 (£88 million/€112 million), but with two extra "Rings" appended to the bottom of the last three zeroes to create the Olympic symbol.

Was the "small profit" line just for public consumption, or was Ueberroth genuinely surprised that his private enterprise Olympics turned out to have done so well? Bear in mind, too, that the final surplus was even higher at some $228 million (£134 million/€170 million).

"We knew we would have a good-sized surplus if things went well," he acknowledges, while emphasising how much scope there had been for nasty surprises right up until the last moment. "If we had to call up the National Guard for extra security it would cost us many millions of dollars a day." They never did. "Just that one item would slash the surplus. You need to budget for the good and the bad."

China beat the United States to take the women’s volleyball gold medal ©Getty ImagesChina beat the United States to take the women’s volleyball gold medal ©Getty Images

Every stadium used, moreover, was subject to a complex rental agreement. He tells me that they still had not got a contract for the Coliseum, venue for the Ceremonies and for athletics, with three months left before the Games.

Many uncertainties, then, persisted almost to the end, though smart management initiatives had been used to mitigate other risks. Early on, for example, Los Angeles 1984 had negotiated a deal with labour unions giving certain undertakings in return for a pledge that "any strikes would always exclude any Olympic venue and activity". Says Ueberroth: "Everybody kept their word. That was a big piece of comfort and a big part of our success. They were very fair with us."

The United States Olympic Committee (USOC) received 40 per cent of the bumper surplus, with a further 20 per cent going to national sports governing bodies. The remaining 40 per cent was used to set up an inner-city charity that Ueberroth says is still very successful today. "People have spent over $300 million (£177 million/€223 million) and the foundations [set up using money from the surplus] still have $300 million (£177 million/€223 million)," he explains. "These people have spent and invested the money well."

Given that the IOC would probably be very reluctant to repeat the experiment of a private enterprise Games - indeed the huge security costs entailed by a modern Olympics probably renders any repetition impossible - what can be said to be the legacy of Los Angeles 1984?

Plenty. For one thing, the Los Angeles Games demonstrated much more clearly than Moscow that boycotts mainly hurt the countries embarking on them, in particular their athletes. While Poles, Hungarians and East Germans were obliged to stay away, the world thrilled to the exploits of Carl Lewis and Li Ning and Seb Coe. The very first gold medal of the Games, in the 50 metres pistol, went to Li's compatriot, Xu Haifeng, who thus became the first Chinese Olympic medallist. There were landmarks for women athletes too, with the Games featuring the first Olympic women's marathon and road racer Connie Carpenter-Phinney of the US becoming the first woman to win an Olympic cycling event.

Sebastian Coe of Great Britain crosses the finish line to win the 1500 metres ©Steve Powell/AllsportSebastian Coe of Great Britain crosses the finish line to win the 1500 metres
©Steve Powell/Allsport

From the moment that Ueberroth "got half a dozen friends to work for nothing", the 1984 Games placed great reliance on volunteers - they had little choice. "There was never a time that we didn't understand we could not have operated without volunteers," Ueberroth adds. These were often long-term commitments, with people taking leave of absence from jobs for months on end. "These were not fun assignments; they didn't get tickets, they just had to work," he says. "The people in charge of every sport were volunteers. We called them Commissioners."

Most fundamentally of all though, I think, the commercial deals struck by Ueberroth and his team demonstrated in the most concrete way that, when handled with business acumen, Olympic properties retained great value - and this at a time when the Movement's finances were at a particularly low ebb.

Says Ueberroth: "Samaranch [who became IOC President in 1980] was a very, very intelligent global citizen, and he saw that our plan, if it worked, would be something that would not be passed onto the next city, but adopted by the IOC."

This, indeed, is exactly what happened. As Richard Pound, the Canadian IOC member who played a key front-line role in sharpening up the IOC's business practices and bringing the Movement back from the brink, has written: "It was not until after the 1984 television rights to the Los Angeles Games had been negotiated that the IOC finally woke up to the economic reality."

Pound remembers Samaranch asking him in 1983 to take over responsibility for television negotiations, in which he wanted the IOC to assume a more active role. By January 1984, with the Los Angeles Games still six months away, Pound was closeted with top TV executives in Lausanne's Palace Hotel, negotiating a colossal $309 million fee for US rights to the 1988 Winter Games in Calgary, Canada.

It was, writes Payne, "the most money ever paid for a single event - sports or otherwise - in the history of television". There was a backlash: negotiations for rights to the 1988 Summer Games, to be held in Seoul, did not go nearly as well. Nevertheless, after that brief stall, the value of broadcasting rights fees has escalated sharply over the past two decades, providing the Movement with a dependable revenue stream that long ago helped it to seize back control of its own destiny.

The IOC also worked hard to develop a structure which would enable it to control some of the sponsorship income that, as Los Angeles underlined, the Olympic brand was well capable of generating.

The TOP worldwide sponsorship programme, which leverages the same concept of category exclusivity as underpinned Los Angeles 1984's "less is more" sponsorship strategy, but on a global basis, made its first appearance in the 1985-1988 Olympic cycle, raising $96 million (£57 million/€71 million) from nine multinational companies. Still going strong, it is set to break the $1 billion (£589 million/€745 million) barrier in 2013-2016.

David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen's Twitter feed can be accessed here.