The miracle of 1984: How Los Angeles saved the dying Olympics

Two months before the Olympics, a Newsweek cover story asked what then felt like an appropriate question: “Are the Games Dead?”

“The general view was that the Olympics had been good for the 20th century but were too big and too costly to continue,” said sports consultant Michael Payne, who had been hired by the IOC in 1983 to revise its marketing strategy.

Then came Los Angeles with an Olympics run by a young travel executive named Peter Ueberroth, who brought new funding ideas built on television deals and corporate sponsorships.

The success was transformative. For two weeks in the summer of 1984, the Los Angeles Games boomed as a nonstop celebration of the United States. Without the Soviet Union, East Germany and other eastern powers that did indeed boycott, the United States won four times as many gold medals as anyone else, turning the first Summer Games in the country since 1932 into a chest-pounding demonstration of American might.

Ueberroth’s financial model was a runaway success, not only covering the costs but yielding a $233 million profit.

Other cities around the world watched what happened in Los Angeles and decided they, too, could pay for their own Olympics. Instead of being one of the final editions of a moribund movement, the 1984 Olympics ignited a four-decade explosion that has turned the Games into biennial extravaganzas that only recently have shown signs of flagging, placing this summer’s Paris Olympics at a similar inflection point

California was in the middle of a tax revolt around the time Los Angeles was awarded the Olympics. In June 1978, the state’s voters overwhelmingly approved Proposition 13, a groundbreaking initiative that limited property taxes. Later that year, Los Angeles residents — afraid the Games would be another Montreal — passed their own referendum, Proposition N, that blocked the city from using public funds for the 1984 Olympics.

Into this climate walked Ueberroth in March 1979. The newly elected president of the Los Angeles Olympic Organizing Committee was 42 and had little experience with sports aside from being a college water polo player. He, too, had voted for Proposition N. Though he ran one of the country’s largest travel companies, most people in the Olympic world had never heard of him. On his first day, he was handed a cardboard box with bills costing $300,000. He used $100 of his own money to open a checking account for the committee.

The official Olympic report from 1984 would note that Ueberroth was “disheartened” to learn that 90 percent of the previous two Summer Olympics had been state-funded. But he had one advantage: While much of Montreal’s debt came from the construction of an elaborate Olympic stadium, Athletes’ Village and facilities, Los Angeles already had stadiums, starting with the Coliseum, which had been constructed for the 1932 Summer Games. The LAOOC would have to build only a swimming facility, velodrome and shooting center.

Certain the American networks would spend far more for the country’s first Summer Olympics in 52 years, Ueberroth and Wolper attempted to stage a bidding war among ABC, CBS, NBC, ESPN (then a fledgling cable channel) and Tandem Productions (a production company co-founded by sitcom creator Norman Lear), requiring each to deposit $750,000 for a seat at the table. This gave the LAOOC more than $3 million that Ueberroth invested in short-term funds that generated nearly $1,000 per day in interest.

“Those were the kinds of brains we were working with,” said Rich Perelman, who ran the Los Angeles Games’ media operations. “With the money paid from the TV deposits and [later] ticket deposits, we operated off the interest all the way into 1983.”

In the fall of 1979, ABC agreed to pay $225 million for the rights to broadcast the Los Angeles Olympics and another $100 million to handle television production for the rest of the world — a cost host cities had absorbed previously. The $325 million was so far beyond what the IOC had imagined that it had negotiated in advance to take just $33 million of Los Angeles’ TV money.

“That was a blockbuster,” Richard Pound, a longtime IOC member who at the time was among a small group trying to modernize the organization.

Ultimately, Ueberroth and Wolper got another $61.7 million in rights from the world’s other broadcasters.

Ueberroth, now 86 and largely out of public view in recent years, did not respond to multiple interview requests made through intermediaries. But in his memoir, “Made in America,” he writes that he believed he would need at least a half-billion dollars to run the Games, so he looked toward corporate America.

Much like with television rights, the IOC had no marketing strategy. To that point, Games organizers cut tiny sponsorship deals with hundreds of companies, who paid almost nothing for the right.

Rubenstein came up with an idea: Instead of making small deals with several sponsors pitching similar products, why not seek higher fees for the exclusive rights? He and Ueberroth set a minimum bid of $4 million, far more than the companies were accustomed to spending for Olympic sponsorships. But Coca-Cola and Budweiser quickly agreed to be the official soft drink and beer companies of the Games. McDonald’s soon followed.

When others balked, Ueberroth stood firm. In his book, he tells of how Kodak, long affiliated with the Olympics, offered just $2 million, so he gave Japanese rival Fuji three days to present a better offer. Fuji did, eventually agreeing to pay $7 million. Kodak was irate.

“Time and time we went back to [sponsors] and asked for more,” Ueberroth writes. “They always gave. We had them. They knew it.”

Though Ueberroth was an Olympic outsider, he had a remarkable understanding of exactly what the Los Angeles Games needed. Those who were around him describe a buttoned-up and reserved man whose sharp stare and slightly ajar nose, broken in his water polo days, made him quietly intimidating.

“An intense guy,” said Terrence Burns, a sports marketing consultant who has worked for the IOC and has co-written several cities’ bid proposals in recent years. “Very good at eye contact. He’s creative. He’s a very precise guy. He doesn’t have a lot of time, to be honest with you, for chitchat or wasting anyone’s time. He gets right down to business.”

“There were people who were absolutely afraid of him,” Perelman adds. “Most people, I think, found him to be demanding.”

Ueberroth’s frugality became an obsession. He boasts in his memoir about delaying the first $25 million television rights payment to the IOC for a day to get an extra $9,000 of interest. He pushed corporate sponsors to help pay for upgrades to existing facilities such as the Coliseum and convinced McDonald’s to fund the construction of an outdoor swimming stadium. He convinced 7-Eleven to come up with money for the velodrome. Both companies got to put their names on the new facilities — the kind of naming-rights deals that are now commonplace.

Renata Simril, the CEO of the LA 84 Foundation, a nonprofit started with the Games’ surplus, said Ueberroth told her years later that he required Usher to approve any expense more than $1,000.

They “were certainly frugal and checking every dollar,” Simril said.

But Ueberroth surprised employees with cash rewards when they did something especially well and often walked around the offices chatting with workers at day’s end.

Edwin Moses, then the world’s best hurdler and a member of the IOC’s Athletes Commission, said Ueberroth was the first official related to the Olympics who urged athletes to market themselves.

Perelman said Ueberroth was “ahead of his time” for believing diverse office staffs make businesses better and actively seeking women and people of color for leadership positions. He also instructed his staff to use contractors and vendors from underserved and often ignored south Los Angeles.

“He wanted the Games to look like the city and the surrounding neighborhood,” said David Simon, who ran government relations for the Games.

With so much money pouring in, Ueberroth decided to sell the torch relay as well. Ueberroth hoped a circuitous 9,300-mile run from New York to Los Angeles would ignite nationwide enthusiasm for the Games. He convinced AT&T to pay the operational costs and got each runner to donate $3,000 to charity for their one-kilometer segment carrying the torch.

Ueberroth’s great plan was actually working.

Two hours after the torch relay began, the Soviet Union announced it was boycotting the Olympics.

“That was a gut punch,” Simon said.

The Soviet government said it was pulling out over security concerns and the threat of anti-Soviet protests in the United States, but the move was understood to be retaliation for the U.S.-led boycott of the Moscow Games four years earlier. Soon, other Soviet-bloc nations joined the boycott. A clause in the ABC deal allowed the network to renegotiate if there was a boycott. Ueberroth was worried.

He and Simon worked frantically, even flying to Havana in hopes of convincing Cuba to attend the Games despite Soviet pressure. Ultimately, 14 countries, including Cuba, skipped the Olympics. Romania was the only Soviet-affiliated country to defy Moscow. ABC did not ask for money back.

The boycott did a strange thing, however. It didn’t cause Americans to lose interest; it made them want the Games even more. The Cold War was at its peak, and President Ronald Reagan had packed his 1984 reelection campaign with anti-Soviet rhetoric. Movies such as “WarGames,” “Red Dawn” and “The Right Stuff” stoked a patriotic fever. And as the torch began moving across the country, people filled roadsides and highway shoulders just to catch glimpses of it.

When the torch finally got to Los Angeles in late July, it seemed as though the whole country was talking about the Olympics. Pound, who carried the torch for a segment in the Los Angeles enclave of Pacific Palisades, was overwhelmed by the size of the crowds, several rows deep on the sidewalks who watched him run. Many held their hands over their hearts. Pound, a Canadian, choked up at the sight.

“It was an emotional experience,” he said.

The Games began July 28 with Opening Ceremonies, orchestrated by Wolper, designed to show all of America’s technological might. A man in a jetpack flew around the Coliseum, dozens of doves were released, and the more than 101,000 in the stands at one point held up colored cards that turned the stadium’s stands into a sea of flags from the participating countries.

Rafer Johnson, the 1960 decathlon gold medalist who had been a college star at UCLA, was the last to carry the torch, running it up a mechanical staircase that rose from the stadium’s east plaza, so he could light the cauldron atop the Coliseum’s gothic peristyle.

From the stadium’s press box, Reagan declared the Games open. Later, he told ABC the Soviets “are the losers” for their boycott.

American runner Joan Benoit-Samuelson, who a week later would win the first Olympic women’s marathon, remembers many of the world’s athletes rushing to embrace the Romanian athletes as they waited to walk into the Coliseum.

“To thank them for coming,” she said.

Then the United States started winning. And winning. And winning. Carl Lewis was the biggest star, taking gold in the 100 and 200 meters, the 4×100-meter relay and the long jump. Moses won his 105th consecutive 400-meter hurdles race. Mary Lou Retton became the first non-Eastern European to win the gymnastics all-around competition. Greg Louganis won two diving golds.

Most of them probably would have won with the Soviets or East Germans competing, but dozens of other American took golds they might not have otherwise, such as the nine U.S. boxers who won their weight classes, the seven American wrestlers who took gold in a sport usually dominated by the Soviets or even the men’s basketball team, a unit of college stars led by Michael Jordan, who had just been drafted by the Chicago Bulls.

Chants of “USA! USA!” filled the venues as American athletes paraded to the top of medal stands.

The Los Angeles Olympics were the first to truly benefit from 1972’s Title IX ruling as a generation of girls who had more equitable opportunities to play sports reached adulthood. In addition to Benoit-Samuelson, U.S. women such as cyclist Connie Carpenter-Phinney and swimmer Tracy Caulkins won gold. The U.S. women’s basketball team took the first of its nine golds in 10 Games.

When she ran through the Coliseum’s tunnel at the end of the marathon, Benoit-Samuelson was stunned to find more than 77,000 people roaring as they watched on the stadium’s video boards.

“I just didn’t think there’d be a lot of people wanting to spend their Sunday morning watching a bunch of women run 26.2 miles,” she said. “And there are a lot of pundits who thought that women really couldn’t handle that distance.”

All of it played out as a prime-time television drama in the golden late-afternoon California light known in Hollywood as the “magic hour.”

“It was the beginning of the television sports empire, so it was huge [and] live,” Moses said. “People didn’t have to stay up late at night. It was in L.A. Hundreds of thousands of people had the opportunity to go. My family was there. My high school track coach was there; friends were there. And people were just enthusiastic about it.”

Many in Los Angeles, including Ueberroth and the Games organizers, had worried the Olympics would be marred by the area’s usual summertime ailments: traffic, smog and heat. But amazingly, most residents stayed home for those two weeks, easing congestion on the freeways. Without so many cars, there was little smog, and the ocean breezes kept the temperature down.

“People were just giddy, like, ‘How cool is this?’” said longtime ABC and later NBC broadcaster Al Michaels, who has lived in the Los Angeles area for much of his life and did all the track and field television commentary. “So L.A. looked a little different then, just for those two weeks, and [that] obviously had a lot to do with the spirit of the Games and the enthusiasm and the excitement that surrounded those Games. It was a different time. It was almost like nirvana in Los Angeles.”

When the Olympics were over and the LAOOC determined it had made $232.5 million, Ueberroth took the profits and started what first was called the Amateur Athletic Foundation, known now as the LA84 Foundation. The nonprofit gave 60 percent of the Games’ surplus to the U.S. Olympic Committee and used the remaining $93 million to help fund and expand youth sports in Southern California, something it continues to do today.

“I think Ueberroth believed in the city, and he believed he could do it,” Burns said. “The ethos of California in the ’80s was optimism. He ran [the Olympics] like a business. The IOC didn’t understand this; they had no choice but to go along with it.

“L.A. basically created Olympic marketing. It became a business — a very professional business.”

The $325 million the LAOOC wrangled from ABC had stunned the IOC and its president, Juan Antonio Samaranch, who had been elected in 1981 with the mandate to modernize the Olympics. About a year before the Games, Adidas chairman Horst Dassler told IOC members, “You, the IOC, are the most valuable and sought-after trademark in the world, yet the Olympic rings are the most-exploited trademark in existence.”

For IOC officials looking for ways to make the Olympics work financially, Ueberroth essentially gave them a blueprint.

“Once we saw the L.A. [television] number, we said, ‘This is the way we can finance the Olympic movement, and we need to take control,’” Pound said. “We had to evolve in the sponsorship business, and we had to figure out what was the Olympics brand? What assets did we have? How do we get ourselves off the companies’ donation budgets and into the C-suite?”

Payne later wrote a book about that time called “Olympic Turnaround.” In it, he tells how Samaranch quickly took away the television rights from the host cities and put them in the IOC’s control, overseeing the bidding for the 1988 Winter and Summer Games broadcast rights months before the Los Angeles Games even happened.

Samaranch also led the creation of the IOC’s own exclusive corporate sponsorship program, much like Ueberroth did in Los Angeles. The program still exists, guaranteeing the IOC a significant amount of money from a small group of companies, separate from the sponsorships each Games’ host sells as well.

The IOC now uses some of this money to help hosts pay for their Olympics. In the ensuing four decades, several cities have held Games that either made money or helped revive their images, including Barcelona, Salt Lake City, London and Beijing, whose 2008 Summer Games were seen as the opening of China to the rest of the world.

Ueberroth and his Olympics were the inspiration for all the Games have become.

Commercialization might have saved the Olympics and even democratized them by funding sports in countries that might never have been able to afford Olympic teams, yet the costs of the Games have soared, leading to an arms race in which hosts willing to spend heavily have built new facilities that since have been orphaned. The 2014 Sochi Winter Games cost $55 billion. And while Paris 2024 Olympic leaders expect to have raised enough money to cover their bills, the Games still will cost over $9 billion.

Though the Los Angeles Games are widely portrayed as uniting the vast and divergent sprawl of communities for two weeks, the city’s police accumulated an arsenal of weapons to secure the Olympics that it would use in those same south Los Angeles neighborhoods that Ueberroth tried to involve in his Games. Some have connected aggressive law enforcement tactics in south Los Angeles to the police department’s preparations for the 1984 Olympics.

Ueberroth, himself, was never bigger than in the summer of 1984. Time magazine named him its man of the year, and Major League Baseball hired him as commissioner weeks before the Games started, though he didn’t start until after the Olympics. The frugality that worked so well with the LAOOC didn’t translate to baseball. He urged team owners to spend less on players, a mandate that helped teams become more profitable but also led to sloppy collusion cases designed to suppress free agent markets. A series of arbitration rulings against baseball led to the owners having to pay the players $280 million in damages.

Ueberroth resigned as baseball commissioner in 1988, months before the end of his first term. He then served as head of the U.S. Olympic and Paralympic Committee’s board for four years and ran unsuccessfully for governor of California. Even his financial savvy drew some criticism in the aftermath. In his book, Payne writes that several of the sponsors whom Ueberroth cajoled to spend heavily were irked when the Games wound up with a profit, saying they felt tricked into writing bigger checks to promote Ueberroth’s image.

But at a time when the Olympics looked to be done, the Games that Los Angeles won by default had a transformative effect.

“You can’t overestimate how important those Games were to the [Olympic] movement,” Burns said. “They saved it.”