LONDON – The U.S. Olympic Committee will contribute $18 million to resolve a financial dispute that has strained relations with the IOC, a person with direct knowledge of the agreement told The Associated Press. The decision ends an impasse over administrative costs of staging the games.
The USOC and International Olympic Committee announced Thursday they had agreed on a "significant financial contribution" from the American body. The amount was confirmed by a person who spoke on condition of anonymity because the terms are confidential.
The breakthrough clears the way for the IOC and USOC to open negotiations earlier than planned on a more substantial long-term revenue-sharing agreement.
"This is a milestone accomplishment for us," USOC chief executive Scott Blackmun said. "We're very much looking forward to being in a substantive dialogue with the IOC. The tone of our relationship with them continues to be very respectful and we're excited about the future."
Thursday's announcement followed meetings between USOC and IOC delegations last month at the Youth Olympics. Talks began last year in Denver and continued at the Winter Olympics in Vancouver in February.
"I am pleased that our relationship has progressed to the point where we can begin to make significant headway on a number of issues that have been a point of contention between the USOC and the IOC," USOC chairman Larry Probst said in a statement.
The agreement is considered vital to the USOC's efforts of rebuilding relations with the international Olympic world. The USOC's troubled standing was illustrated last year when Chicago was eliminated in the first round of voting for the 2016 Games. That followed New York's humbling defeat in 2005 for the 2012 Olympics.
Crucial to the breakthrough was the addition of Dow Chemical Co. as a global Olympic sponsor in a 10-year, multimillion-dollar deal announced in July. The USOC receives a share of more than $25 million from the Dow deal, which made it easier to compromise on the administrative costs.
The USOC was reluctant to cut funds from any of its programs for the games' costs, so the money from the sponsorship provided the solution.
The administrative costs — paid by all national Olympic committees — go toward the funding of Olympic commissions, anti-doping operations, the Court of Arbitration for Sport and other matters. Until now, the USOC has not participated in those costs.
The new agreement covers costs from the Vancouver Games and the 2012 London Olympics.
Still pending is the more significant revenue-sharing issue. The sides agreed last year to begin negotiations in 2013 on a new revenue formula to go into effect in 2020, but the latest agreement allows them to start those talks right away.
Currently, the USOC gets a 20 percent share of global sponsorship revenue and a 12.75 percent share of U.S. broadcast rights deals. Many international officials feel the U.S. share is too high — some have even called it "immoral."
"I am very pleased that we can put the issue of games' costs behind us for the time being so that we can pursue a broader discussion," Blackmun said in a statement. "That discussion will be difficult and complicated, but we will be aided by the fact that we can have a constructive dialogue, and that would not have been possible just a few months ago."