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 Up Front With Martin B. Deutsch

martin OLYMPIC PRICES
IN LOS ANGELES


BY MARTIN B. DEUTSCH

June 1, 1984 -- Last February I had dinner with a friend at a Mexican restaurant in Los Angeles. Now, my relative lack of enthusiasm for Los Angeles dining has been well documented, as a number of Los Angelenos have complained in Frequent Flyer Forum. But one thing L.A. does generally offer is good inexpensive Mexican food. Indeed, my taco-enchilada-tostado combination plate that night was tolerable. Nothing special, but certainly o.k. The price, however, was a shocker: $13.50 for a meal that would normally cost six bucks, even in New York. "Pre-Olympic prices," my friend explained, only partly in jest.

Citus, altius, fortius, the Olympic creed, is usually translated as "swifter, higher, stronger." Based on what’s been happening in Los Angeles lately, I’m beginning to wonder if those comparatives don’t apply to price increase, profits and rip-offs.

As readers of this column may recall, I have praised Los Angeles Mayor Tom Bradley for vowing that his city would not go into debt from its hosting of the summer games. Montreal is still trying to pay off its billion-dollar deficit from 1976. And I have expressed my admiration for Peter Ueberroth, a longtime friend who is running the Los Angeles Olympics Organizing Committee (LAOOC), for his ideas on attracting private support to keep the committee solvent. Those were—and remain—worthy goals. Bradley and Ueberroth set out to prove to the world that hosting an Olympics is still a viable proposition.

Somewhere along the way, something went wrong. Private support turned into crass profiteering. The LAOOC’s attempt to earn $30 million—after it was clear that no further income was even needed—by charging sponsors $3,000 per kilometer for the cross-country touch run, bordered on banditry.

Now we are told that the organizing committee will wrap up its efforts with a $10 million profit. Committee staff members have been promised huge bonuses, unlike anything seen in private enterprise (although Ueberroth insists they will be less than the $100,000 per person reported by the press).

The LAOOC had little trouble finding members in the fund-raising frenzy. The U.S. Treasury raised $32 million by selling Olympic silver dollars (at a 1000 percent markup on the price of silver), half of which will go to the committee. Olympic key chains, mugs and baubles will bring in about $150 million for the fifty-five companies licensed to sell them (here the LAOOC take is a modest 10 percent). Twenty-nine corporate sponsors for the games came through with at least $117 million, including a record $15 million from Coca Cola, all of which went into the LAOOC bank account. As a result, we’re now faced with the Olympic insignia on everything from beer bottles to jockstraps. ABC shelled out an unbelievable $225 million for rights to cover the games, and in turn will charge a record $260,000 for a prime-time spot.

These are all examples of willing participation in the LAOOC’s profit orgy. Other examples more closely resemble extortion. In my opinion, the most offensive of these was the handling of ticket receipts. Last fall people desiring to attend the games were invited to send in their orders, with checks or credit card numbers to cover the full cost of all tickets ordered. In June some 275,000 of them will get tickets, the rest will get refunds. Meanwhile, the LAOOC has earned up to $10 million in interest on other people’s money, many of whom will never see a single Olympian go for the gold.

Olympic greed was contagious. As we report elsewhere in this issue ("The Olympics Are Coming, the Olympics Are Coming"), the airlines originally tried to black out all excursion fares to California during the games, hotels started jacking up their rates, restaurants queued up at printers to get new menus (with inflated prices) into type. Chauffeured limousines were once being offered for $1,500 per day during the Olympics, compared to the usual rate of about thirty dollars per hour. Throughout the country, newspaper classified sections carried ads offering Los Angeles homes for $12,000 (or more) per week.

Most of these price gougers have been forced to back off. The American public spoke up, loud and clear, and simply refused to pay most of those prices. It now seems that competition—which nobody in Los Angeles expected—may keep most travel expenses at least within reason. But is extortion that fails any less offensive than the kind that succeeds?

It’s only fair for me to note that Olympian greed does not imply corruption. As far as I know, nobody has charged the LAOOC with mishandling the huge sums of money it has earned. And Ueberroth has demonstrated himself to be a brilliant administrator who has the rare ability to reconcile bureaucracy with productivity and novel ideas.

And, it’s worth noting that Ueberroth seems to have succeeded in doing something that has never been done before: host a Summer Olympics without a cent of taxpayers’ money and without a deficit.

Those accomplishments would have been enough. But as it stands, when the torch carrier enters the opening ceremonies on July 28, we’re all going to hear Jim McKay recite how much money the running of that flame earned. As with my Mexican meal tab in Los Angeles last February, that’s going to leave a bad taste.—MBD with Coleman Lollar.

This column originally appeared in Frequent Flyer magazine.

Copyright © 1991-2007 by Martin B. Deutsch. All rights reserved.