Those charges stung the civic-minded community of Salt Lake City. And while the city managed to keep the 2002 Olympics, the scandal forced the ouster or resignation of several IOC officials and led to reforms that included a new international ethics code. It also led SLOC to clean house by naming Romney, the son of three-time Michigan governor George Romney, as CEO. Romney, in turn, tapped Bullock — a fellow Brigham Young University graduate with whom he had worked at Bain & Co. 20 years before — as his second-in-command.
The team faced an uphill battle. In the wake of the scandal, one delicate negotiation was broken off, with health-care giant Johnson & Johnson. Among the sponsors from Atlanta’s Games, some of them already in SLOC’s fold, John Hancock Financial Services Inc. and others grumbled about possible withdrawal. In addition, the federal government, which was scheduled to allocate hundreds of millions of dollars for the Games, balked.
The scandal left Bullock, who was enjoying a lucrative career at the roll-up firm of Alpine Consolidated LLC, feeling “chagrined and disappointed. That’s not Utah; that’s not us,” he told himself. So, when Romney offered the $200,000-a-year SLOC position to him in early 1999, Bullock decided to take a chance at helping to turn things around. “We had two and a half years to rectify this,” he says. “I knew Mitt was a superstar, but I knew he couldn’t do it alone.”
Cash Flow Rules
The position seemed tailor-made for Bullock, who at 47 still embraces ski jumping with the vigor of an 18-year-old. But the first thing Bullock learned about Olympics management was that it deals with a unique business model. “There’s a different set of rules,” he says. “You take the monthly P&L and the balance sheet and throw them out the window.” The reason: everything is geared toward the end of the “project” that the 17 days of competition represents. “The only balance sheet that matters is at the end of the Games,” he says. “Cash flow is my surrogate balance sheet.”
Still, Bullock admits that he “didn’t fully appreciate the magnitude of the deficit” before coming on board. Among revenue elements, for example, only the broadcasting portion — NBC’s $445 million due to SLOC — was a known quantity. The $751 million amount budgeted for sponsorships “assumed that we would sign up sponsors far in excess of what had been done in prior Games.” The culprit, he explains, was a 20-volume Bechtel Corp. study, commissioned by the prior SLOC team, that had been prepared by asking all operating divisions what they would need, then plugging in revenue numbers to match the totals.
Bullock knew that “creating a validated budget that’s been scrubbed and scrutinized was the key to restoring confidence.” On the income side, he slashed the budget for sponsor revenues of all kinds by 22 percent; they now stand at $587 million. Then, he “challenged all levels of cost” in the budget. On the first pass, he was able to eliminate $100 million of costs, or 6 percent of the budget total.