Meet the Non-Candidates for IOC President: Richard Carrion

(ATR) Around the Rings interviews possible candidates for the IOC presidency – today, Richard Carrion of Puerto Rico.

Our series includes interviews with four (so far) of the most-mentioned possible contenders to succeed Jacques Rogge next year. None of the four have yet to declare anything more than an interest in considering a run for the post. Formal notice is due in June 2013.

Along with Carrion, the series this week features interviews with Thomas Bach (Aug. 20), Rene Fasel (Aug. 21) and Ser Miang Ng. All were conducted in London during the Olympic Games.

All gingerly stepped around their current status as non-candidates. IOC rules for the campaign put a damper on public debate and statements outside of a manifesto for IOC members to review.

Carrion, 59, has been an IOC member since 1990. He is the head of Puerto Rico’s largest bank and chair of the IOC Finance Commission. He led the IOC in negotiations for the current TV rights contract with NBC as well as TV deals in other regions of the world.

Around the Rings: What’s the biggest weakness or challenge that you see right now for the IOC portfolio?

Richard Carrion: The financial markets are a pretty volatile place these days, particularly with everything that’s going on in the world economy, but that is really secondary. That’s not what we should worry about.

We need to worry about what is the real strength of the Olympic Movement, and it’s got nothing to do with portfolios or television contracts. It is what people here are feeling good about. That’s the strength of the Olympic Games.

The portfolio, TV, those are negotiations, those are not really central to the business. I mean, it’s important, you do it, but the real capital of the IOC is not that investment portfolio. The real capital of the IOC is the reason people tune in, the reason people stand out in the rain to watch somebody running with a flame, the reason this whole country is so thrilled right now.

That power to inspire the world, that power to join, we estimate over 4 billion people at some point will watch the Games, that’s the real strength. That’s the capital we need to worry about. The rest is secondary. Truly.

It’s maintaining that and maintaining the purity of that feeling, the strength of that emotional pull that we have.

ATR: And do Games like they’re being held here in London improve that?

RC: I think good Games serve as inspiration. That was the vision, and I think in large part that they’ve managed that. The U.K. is going fantastically well. Their athletes are doing very well, the country has inspired – the whole world is feeling good about the Games. That’s what we need to maintain.

ATR:Would you call these "perfect" Olympics?

RC: You can be picayune about little blips here and there, but these are extremely, extremely good, well-managed Games in very difficult [conditions]. This is a big city, a world capital, and they’ve managed a great Games. That final at Wimbledon [Murray versus Federer]...you could not have asked for a better setting. This is the cathedral of world tennis, and you had a rematch of the Wimbledon final and the local hero won. You couldn’t script these things if you wanted to. These are fantastic Games.

You saw what Phelps did in the pool at clearly the latter stage of his career, but he still has the power to wow people. That’s what it’s about. It about evoking that...about people striving for excellence.

The cream of the world’s youth is here in the spirit of friendship. That’s why we do what we do. I should be back at home working, but I’m privileged to be here. I’m privileged to work for that.

ATR:Along those lines, have you given any more thought about what you want to pursue in the IOC? Whether you’re interested in becoming IOC president one day?

RC: I have given a lot of thought to that.

ATR:Any decisions yet?

RC: Well, I think right now the important thing is these Games, and we have until June to announce candidatures. I don’t think it’s time.

ATR:Another big decision coming up is the sports program for the 2020 Olympics. First, the IOC has to select one to cut?

RC: Selecting one to cut and one to put in. That’s a very tough decision. It’s clearly harder to cut than to bring something in. Again, with these big things we generally end up making the right decision, but it’ll be interesting.

ATR: What do you think will inform the decision for IOC members about which sport to cut?

RC: It varies. There’re some that are more traditionalist...but at the end of the day, our program needs to capture the world’s views so we need to refresh our program with things that young people are doing.

ATR: Is there a gap now, do you think? A growing gap between young people and the relevancy of the Olympic program?

RC: I think we run that risk because these are decisions that will take a long time to implement. I think we run that risk. But clearly with these Games, people are feeling pretty good. But you have to be striving at all times to maintainthat. This is like an athlete: you have to continuously train and stay in shape.

ATR: The London Games will be marked by the most-ever use of internet streaming video of the Games outside the traditional broadcast platform. What will this mean to the value of Olympic TV rights?

RC: Well, the jury’s still out. There’s a school of thought that it actually helps your later broadcast. That’s what the CTV people told us in Vancouver, and we’ll see. Preliminary indication is that it’s certainly not hurting it. People watch it and they start saying "you gotta watch this", ‘"you gotta watch, you know, Bolt" or "you gotta watch this" and then people tune into the broadcast. So, we’ll see, but that’s definitely a big change. There’s a lot more access to new media through online and a lot more social stuff in these Games.

ATR: Does it change the amount of money that you’re able to charge?

RC: Well, not insofar as that we bundle all the rights. It’s really up to them to decide how to allocate it. Right now, digital media does not generate anywhere near the revenue that traditional broadcast media does, so they’ll be lucky if the digital media generates anywhere from 5 to 10 percent of the overall package.

What is that digital part doing? Is it improving the overall? That’s what’s out there, but right now the revenue coming directly from and attributed to digital media is still very, very small. What impact it has on the other is still a question.

ATR: How long do you think it’ll take before you start seeing the financial impact?

RC: It really depends on how it develops,how people start pricing content differently. But you’re going to see this over the next five years, I would imagine.

ATR: You say pricing content. You think we’ll be paying for the stream?

RC: Well, look at what newspapers are doing. I don’t think it’s a viable model to give it away. I think eventually people will start. Either you buy the whole package, you buy the three screens or the four screens or whatever it is.

So I think that world is evolving and people are getting more and more on small screens, on iPads, on their TVs, bigger TVs, TVs are getting bigger. So there’s also that, the experience with the TV is also getting much better.

People still want to share the experience on a big screen, so I don’t think it’s an either or thing, I think it’s just more choice to people as to how they want to [watch]. If they’re in motion, then they can watch it if they’re going some place. If they’re in their home, they can watch it with friends on a big screen. So it’s really more about opening more choice. I don’t think one thing’s going to replace the other.

ATR: Back to the IOC portfolio, you feel the underlying numbers are strong?

RC: The ‘10 and ‘12 cycle has been a good one. That’s really when the new TV contracts came in, you know, the ’10 and ’12 contract for NBC. So you’re seeing a real bump-up from the previous quad in terms of television revenue.

ATR: $2.6 billion in the preceding quad, $3.9 billion for this cycle?

RC: Right. Exactly right. It’s a 50 percent increase.

ATR: And is that attributable to the TV?

RC: That is the TV. Then you have the marketing, which is about a billion. The rest is royalties and merchandise and our share of that, the royalties, what we get of that, which, in the case of Beijing were very good. So all-in-all I think we’ve experienced that bump-up.

ATR: And the reserve of $540 million. Is that the right word to call it?

RC: That’s the Olympic Foundation. It's really what we call the reserve fund for the Olympic Movement. And that’s helped build up, I hope by the end of this year assuming things continue as they’re going. But that amount is going to increase to north of $800 million.

ATR: So will that reserve grow much beyond that figure?

RC: Well, the purpose of that reserve is to maintain the Olympic Movement in case of a cancellation of a Games and what that would mean. So we use a formula that calculates what we’d have to do in terms of expenses, in terms of maintaining the expenses, obviously trying to limit expenses, but we’d still have to keep the train running, if you will, in case of a cancellation. And it would have to be returned, and there’s quite a few NOCs and federations that would probably need support as well in the event, which is highly unlikely, that the Games have been cancelled.

ATR: Do you need more money or is that a comfortable figure?

RC: It’s right around the level. Once we finish these Games, I think it will be at quite a good level. Again, you probably have to adjust as the expenses go up, the complexity goes up, you probably want to adjust it but we’ll probably have a pretty healthy reserve that matches our formula for what we would need over a four-year period.

Conducted in London by Ed Hula.