A High Hurdle In Atlanta

That clock won't let Billy Payne relax. It stands in the lobby of his Atlanta Committee for the Olympic Games (ACOG), counting down the days and hours until the torch is lit to start the 1996 Olympics. Five years ago, the millionaire real estate attorney spearheaded a longshot bid to land the centennial Olympics for his hometown. Although Athens, Greece--site of the 1896 Olympics--was considered a shoo-in, Payne sold the International Olympic Committee on the virtues of Atlanta. "It's still sometimes a bit hard to believe the magnitude of what we're attempting," he says.

Payne may not want to believe it. With three years and three months left, facilities costing more than $500 million--including the Olympic Stadium--are still mere blueprints. Raising the estimated $1.57 billion needed to stage the fourth summer Olympiad on U.S. soil will require big bucks from corporate sponsors, licensing agreements, tickets, and most important, broadcast rights. The negotiations for American TV rights, for three decades the financial lifeblood of the Olympics, will begin in late July. Payne needs a hefty rights payment to meet the games' costs, but the Big Three networks are making it plain that the era of sky's-the-limit bidding is over.

Five years ago, Payne confidently predicted that U.S. rights would fetch $600 million. That figure now looks about as probable as a 10-foot high jump. "It could go as low as $400 million," says one network sports executive. A shortfall of that size could saddle the ACOG and the IOC with a loss.

Stung by huge losses on Major League Baseball and the National Football League, the networks say they're looking at the Atlanta games with the cold eyes of an accountant. In recent years, ABC has loudly proclaimed its refusal to pay loss-leader prices for showcase programming. CBS, hit especially hard on its sports properties, may not be as hungry as it was three or four years ago. And after losing a reported $75 million on the 1992 Olympics in Barcelona, NBC is proceeding cautiously.

Payne no longer ventures a guess as to what the ACOG will get for the rights, but at least he didn't have to open the bidding last year. With the economy in the dumps in 1992, Payne and the IOC decided to delay the rights sale. They could afford to because of a shrewd financial maneuver by Payne. Under ordinary circumstances, construction budgets would have forced the ACOG to negotiate in 1992. But armed with a $300 million line of credit from NationsBank, which allowed venue planning to begin, Payne and the IOC were able to wait. "The line of credit gives us flexibility," says Payne. "Without it, we probably would have been forced into negotiating before we wanted to."

teaming up. Network officials concede that the Atlanta Games are a much more valuable property than Barcelona's were because they will be contested in the Eastern time zone and will provide two weeks of live, prime-time programming. But that probably won't persuade a network to scoop up all the rights for itself. Instead, the nets are likely to link up with a cable outfit. Pairings could include ABC and ESPN, both owned by Capital Cities/ABC Inc., and Atlanta-based Turner Broadcasting System Inc. with any one of the three nets. "I think the IOC recognizes how dealing with a network-cable bid could maximize revenues," says Kevin O'Malley, Turner's sports programming vice-president. The winning bid may also contain such wrinkles as an agreement to pay additional fees if advertising revenues exceed an agreed-upon threshold.

So far, other fund-raising efforts have exceeded expectations. European TV rights went for $235 million--more than twice the fee for Barcelona. And despite grumbling from many of the 1992 sponsors, the ACOG has sold sponsorships to Anheuser-Busch, Home Depot, IBM, NationsBank, and Sara Lee, for an average fee of about $40 million. But with all the worrying about TV rights, an additional five to seven big-money sponsors would give Payne some much-needed breathing room. Until that happens, though, the ticking of that darn clock in the lobby will just keep getting louder.

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