The Olympic fire drill.

It takes a financial executive confident in his resume to accept a job that promises to span no more than six years. That's what Patrick C. Glisson did when he signed on as CFO of the Atlanta Committee for the 1996 Olympic Games.

In his earlier position as CFO for the city of Atlanta, Glisson was instrumental in putting together Atlanta's bid package for the Games. After a short stint in the private sector with KPMG Peat Marwick, he opted to join what was quickly becoming an Olympic whirlwind.

His first priority? Get his hands around a $1.58-billion breakeven budget (since upgraded to $1.7 billion). The assignment has been a rocky one, indeed, but Glisson has learned how to survive by "staying focused and having a high tolerance for ambiguity," he says. "When I first got to know the COO, who's my immediate boss here, we both concluded that this was a fire drill of major proportion. If we couldn't handle situations that change very rapidly, we were in the wrong place."

CFO Glisson definitely is in the right place. And he shares his gold-medal tales here with John B. Sganga, CFO of Consolidated Furniture.

SGANGA: What's the management organization of the Atlanta Committee? To whom do you report, and who are your peers?

GLISSON: I report directly to the COO, as do all of the core activities involved in actually delivering the Games. He reports to our president and CEO, who came up with the bold idea of bringing the Games to Atlanta and then sold the idea to the International Olympic Committee. Reporting directly to the CEO are the external-relations activities and functions like communications, Olympic programs, legacy projects, marketing and corporate services.

My organization is called financial and management services, and my peers are in construction, Games services, operations, technology, venue management, sports, administration, international relations and our Olympic broadcasting activity.

SGANGA: Who reports to you, and what functions are you responsible for?

GLISSON: The core operation of finance - including budgeting, financial planning and analysis; accounting, procurement, contract administration and risk management - reports to me. We serve as the eyes and ears of management and until recently formed the center of the corporate planning function. Until late 1992, I also oversaw human resources and administration.

SGANGA: I understand your finance staffing varies, with a permanent staff, volunteers, temporary, part-time and local staffing. How does that break down?

GLISSON: Most everyone currently on board - just over a hundred people - is part of permanent staffing. We also have some contractors who offer brokerage support for risk management as well as occasional volunteers.

The tally is a little more complex corporatewide because we employ value-in-kind, or VIK, personnel from our sponsors. That presents a particularly difficult management problem from a financial perspective. In general, value-in-kind donations replace cash and can be such items as people, airline tickets, computers and telephones from our sponsors.

SGANGA: We understand more than 71,000 people are involved in the Olympics. Can you tell us about the typical payroll now and during peak staffing periods?

GLISSON: Let me answer that in numbers of people. By the end of 1995, we had a total staff of 3,300 people, including those who are salaried, hourly, from sponsors, loaned executives, VIK, contractors and volunteers. However, we're beginning to ramp up significantly and at the apex - that is, the delivery of the Games - we could have as many as 80,000 people. Then we'll quickly demobilize that force.

But most of the people hired for the peak time are contractors and volunteers. We have fewer than 1,500 salaried, full-time people.

SGANGA: Do you offer employee benefits to the 1,500 people? And, if so, what's the typical plan like, and what percentage of salary is it?

GLISSON: We do now offer benefits. But when I walked in the door, I didn't even have a secretary, much less a benefit plan. So we created one from scratch.

Early on, we agreed to simply provide a supplement to the Cobra plans. Once we were up and running, our objective was to have a plan comparable to those in most of the businesses in Atlanta, without any retirement plan. So now we have a health plan, with the employee and the company sharing the cost; an optional dental plan; and a basic life-insurance plan.

We have a 403(b), which is the nonprofit version of a deferred compensation plan, funded through employee contributions. So an employee can put away tax-exempt money. And, of course, we have holiday and vacation schedules similar to those a large company would offer.

SGANGA: Do volunteers play a major role in the finance organization?

GLISSON: We use volunteers now where they make sense and particularly for delivering the Games. I'll use volunteers extensively in my department during that time because we'll have a much expanded financial operation. In fact, we'll have a financial service officer at each venue, or sporting area, and we'll have risk-management people available for loss control and claims management. Most of the latter workers will come from our broker or insurer. And, although they're really contractors, you can consider them volunteers.

We'll also use another 100 or so people from our CPA finns to supplement the staff in the field at Games time. And we have a relationship with the Institute of Internal Auditors in which some of their members work for us on a volunteer basis. In fact, the only place I'm effectively using finance volunteers at the moment is in the internal-audit area because the IIA is supporting us with auditors who are very senior in their companies, sometimes the head person, offering their valuable time on special audit projects.

SGANGA: What's your biggest concern about the people for whom you're responsible?

GLISSON: Keeping them. When you're hiring for an organization that has a finite life, it's easier when you have four or five years to go. As we get closer to the Games, my challenge is to keep the people I have through that time and then after it. The financial organization is going to be the key unit to turn off the lights when the party's over.

SGANGA: So some good people will be available?

GLISSON: Oh, yes. We have some extremely talented people. In fact, some of your readers may be interested in them.

SGANGA: What have you done that's unique in this area?

GLISSON: The thing I'm proudest of is the quality and diversity of our team. From the beginning, we made a commitment to what we call an equal economic opportunity program - partly in hiring, partly in the procurement area. My personal objective was to have a diverse finance staff, both in race and gender, and we're almost perfectly divided, with terrific people from top to bottom.

SGANGA: Can you describe the information management equipment you're using and your approach?

GLISSON: We're running what amounts to a fairly large corporation. We deploy technology of all types to a variety of venues. Most of it isn't geared to support corporate operations but to support the Games' operations. The Results System, which tracks the results of the competition, and Info '96, a very large database that stores everything you want to know about the Games, are two of our more significant systems.

From the early days, we've been working with high-tech equipment, because our sponsors want us to be as cutting edge as we can be. Given the generosity of the sponsors and the magnitude of the venture, we're using much more advanced technology than a normal company would. We'd never have the diversity of technology if our sponsors weren't providing everything from printers to computers to telephones to pagers to cellular phones.

SGANGA: So the sponsors give you the equipment free of charge?

GLISSON: Well, nothing's free. Part of the challenge of financial management is to manage items that aren't cash. If you look at our budget, you'll notice it's made up of both dollars and things. You can't pay people in computers, of course, so it's a tricky balance to ensure that we actually need everything we have and that we have a budget for it, simply because we could have all the computers we can use but not enough money to pay for a construction contract at the stadium.

SGANGA: Are you using the Internet at all?

GLISSON: Yes, we are, as an information disseminator. On the Worldwide Web, you'll find a video of our CEO speaking about the Olympics as well as information about tickets, accommodations, events, schedules, merchandise and Atlanta. We have about 30,000 inquiries a day. [Editor's note - You can reach the Olympics Web site at http:\\www.atlanta.olympic.org.]

SGANGA: Can you order tickets through the Internet?

GLISSON: Early this year, you should be able to order tickets and make ticket inquiries online.

SGANGA: What financial reporting requirements are you subject to?

GLISSON: We're a 501(c)(3) organization. Our financial reporting is essentially standard, although our distribution is fairly limited. The only thing unique is we're a project in a pure accounting sense, and therefore our accounting is much akin to construction accounting. We defer all of our revenues or expenditures until the conclusion of the Games, so our balance sheet is rather odd looking. Given the nature of the organization, we spend money we don't yet have, which makes for an interesting line on the asset side called "expenditures in excess of revenue and support." I call it the net deficit line, and it's balanced by items like accrued accounts payable, a bank line of credit, or, as is the case now, deferred revenues from ticket income.

SGANGA: How often do you make the reports and to whom?

GLISSON: Of course, we report frequently. We actually have our own paperless and online accounting system, through which we do all of our procurement. Although we issue formal reports to our departments monthly, they can inquire about the status of a transaction at any time.

We hold a formal reporting session with the COO monthly and report to our board of directors quarterly. We also provide summary information to our finance committee and audit committee. Quarterly, we forward the income statement and balance sheets to the city of Atlanta and to an oversight authority called the Metropolitan Atlanta Olympic Games Authority. We also report to the International Olympic Committee on a quarterly basis. And, finally, we provide our lending bank formal information monthly but interact on a daily basis.

SGANGA: What's your biggest reporting headache?

GLISSON: Public disclosure, because we're in a Catch-22 situation. We're a private company but very high profile. Even though no public money goes into the Games, our oversight authority assumes the position of financial overseer. One of the difficulties is that, while my background leads me to be very open, disclosing certain data could lead to potential financial failure. For instance, I can disclose the details of sponsor agreements with only a few people. In fact, I needed specific authority from some sponsors to disclose a portion of their data to the bank that's lending against their contracts.

SGANGA: What's your major achievement in the reporting area?

GLISSON: We laugh about it and say we've created OGAAP - Olympic GAAP. But I guess the major achievement is meeting all the demands of our different constituencies, since each begs for a slightly different presentation. Although we create straight financials, I probably do more managerial, interpretive reporting.

SGANGA: How do you control cash flow, and what are the key phases of your cash management process?

GLISSON: It really isn't that complex. The cash sources come from television rights, national and international sponsorship programs, ticketing and licensing. Most of these relationships are contractual, which entails a payment schedule, so once we reach an agreement with, say, a sponsor, then that company signs up to pay a royalty periodically.

We have a little more difficulty with licensing because most of these agreements involve minimum guarantees, are based on the sales of a product and require monthly reports. The follow-up routine is more complex because we sometimes have to send letters to get people to pay, even though we have letters of credit for most.

As for daily cash management, our bank supplies us with a basket of tools that gives us very current daily information on which to make borrowing and investment decisions. One dilemma is how to collect a series of commitments that have payment schedules that don't necessarily neatly meet our own demands for making payments. So we have to borrow. Fortunately, early on we reached an agreement with our bank, recorded in a very thick loan document, for a line of credit of $300 million. We never needed that much, but it comforted the outside world. We now have a $50-million line of credit, but we're not borrowing. In fact, we're in a cash positive position, principally due to ticket sales and an upfront payment on the Japanese television agreement.

If you follow the ticketing process, you see several phases. The first was mail order; we took orders from May 1 to the end of June 1995 and then went to a lottery system to be equitable for our high-demand tickets. In September, we notified all of the people who subscribed to tickets telling them how many they got and for what events. Meanwhile, we had their money for that time, so we invested those funds.

SGANGA: I assume you put your excess cash in overnight investments.

GLISSON: Yes, we adopted a cash and investment policy long ago. It closely mirrors a governmental legal list, because it's very conservative and based generally on U.S. securities. Typically, we invest in high-grade commercial paper and over-night repos based on government securities.

SGANGA: Are you still working toward a breakeven budget, as reported in the press?

GLISSON: Very much so. Our budget includes a small contingency, currently $30 million, but our objective is to break even. I'll be the happiest camper around if I have one dollar left. Unlike in Los Angeles, where the 1984 Games ended with a huge surplus, our objective is for any surplus to go into physical facilities in Atlanta and into quality Games.

SGANGA: What's your proudest cash achievement?

GLISSON: Japan paid us up front, as opposed to all of our other principal sponsors, which paid over a period of time. Part of the reason was timing. It was the last big sponsorship we signed. Interestingly, the Japanese paid up front in Barcelona as well. They prefer that mode.

I'm also proud of the cash-management structure of the ticketing process. Although we've irritated some people along the way, the procedure isn't a lot different from that of any other major sporting event. We managed it fairly and in a way that maximized our cash availability.

SGANGA: One of your major sources of funding is through sponsorships. How do they work?

GLISSON: We have two tiers of sponsorship: national and international. The international tier of sponsorship is represented by the Coca-Colas and Visas of the world. In addition, the IOC gives us the authority to sell certain rights nationally. Olympic marks and rights are expensive commodities.

In the early days of an organizing committee, you have to sort out the product categories to decide which the international committee will sell and which the organizing committee can sell. This quadrennium, the IOC had 10 sponsors. The dollars are paid directly to the IOC and then split among the international Olympic family, the summer organizing committee and the winter organizing committee - which in our case was Lillehammer. It's a very complex formula that to us meant getting roughly 36 percent of these sponsorships.

SGANGA: What about the joint venture?

GLISSON: The joint venture is our domestic marketing operation. The IOC required that we enter into a relationship with our national organizing committee, in this case the U.S. Olympic Committee, to collectively market the rights and benefits of the Olympic Games and the U.S. team. We formed a separate company with the U.S. Committee, called Atlanta Centennial Olympic Properties.

Through the Olympic Properties, we market sponsorships, run the licensing program, market the coin program and initiate new marketing ventures. But the center of it is national sponsorship. These sponsors pay for rights in this country and generally buy rights to the marks of both the Atlanta Games and the U.S. team.

The difficulty, of course, is while we have the mutual objective of presenting world-class sports, we're often at financial loggerheads because we're attempting to split up a rather finite pie. In general, the sponsorships are divided 70 percent to us and 30 percent to the USOC. But, again, the split can get very tricky when you're dealing with VIK property. If we have a technology sponsor and we need all the computers or telephones to run the Games, we have to make up that 30 percent in cash to the USOC.

Another reason we formed this joint venture was to limit "ambush" marketing. For instance, in Los Angeles, you could see two blimps in the air, one each from competing photographic companies. Spectators questioned who was the rightful sponsor. In truth, both were. One sponsored the team, and one sponsored the Games. In Atlanta, you'll see only one of the companies, because it's sponsoring both the team and the Games.

SGANGA: We understand the Atlanta Committee promised the Games wouldn't cost taxpayers a cent for improving infrastructure or other preparations. How does that promise now stand?

GLISSON: Well, I guess it's a matter of perspective. My first exposure to the Atlanta Olympics was as the CFO for the city of Atlanta. The whole idea scared me to death because I wondered who's going to pay for this. But as part of the organizing committee, I bought off on funding the Games.

I believe if you're an entity of vision, be it a city, a county or a country, you'll see so many other things you can make of the opportunity. Barcelona, for instance, spent $8 billion rejuvenating that beautiful city on the Mediterranean Sea. It built a new airport and a new highway. Of course, Atlanta didn't have to make many major structural changes.

Then there are the political debates about the operating costs - like how many police will we need and who's going to pay for them. In the operating sense, this is a worldwide event, particularly when it comes to security. A private organizing committee just can't do some of the things required for such a huge endeavor. So you have to look at the question of what the taxpayer paid with a degree of perspective.

Coming from the government arena, I think the decision is economically a no-brainer for any government at any level. Nationally and internationally, the Olympic Games are looked upon as a matter of national pride. Locally, you can look at it as a huge economic stimulator. We've done studies that project the economic impact for Georgia will be $5 billion, and that's before you consider subjects like someone coming to Atlanta, liking the region and locating a foreign company here.

So for some minuscule dollars in extra police, which we'll pay for via contract, Atlanta gets worldwide exposure it couldn't purchase. Plus, we're putting almost a half billion dollars in infrastructure in the city, including an Olympic stadium that will convert to a baseball facility for the Braves. No city in this country has a tax-free baseball stadium. We've also put $47 million of dormitories on the Georgia Tech campus, built an aquatic center worth about $20 million, put $50 million into the Atlanta University Center and built a worldclass tennis center, shooting venue, and rowing and canoeing venue.

All of these facilities typically are provided by governments. In fact, the IOC is still astounded that we went about it this way. When you look at it net/net, from an income-statement standpoint, this project far and away overpaid for itself.

Having said that, it's my personal view that, post-Salt Lake City, the Olympic Games will never return to this country, simply because the IOC has had enough of living on the edge, where the organizing committee pays for not only the operations of the Games but for the huge infrastructure that generally will be given as gifts to local governments. The normal expectation worldwide is that the country, the state or the city takes on that responsibility.

SGANGA: What's the magnitude of advance ticket sales as a percentage of the total expected sales?

GLISSON: We've been very pleased with our ticket success. We have more tickets to sell - about 11 million - than did Barcelona and Los Angeles combined. In 1994, we forecast ticket sales at 17 percent of our revenue, which represented $361 million. In 1996, we forecast sales at 25 percent, which represents $422 million.

SGANGA: How do you control your capital expenditures?

GLISSON: Unlike most organizations with a capital budget, we treat a capital expenditure just like an operating expense. The only difference is the project management associated with it is very carefully administered by our construction division. For the most part, we out-source the function and, while my organization pays the bills, I'm not doing the pre-audit.

SGANGA: What's your major concern about the capital budget situation?

GLISSON: From a financial standpoint, I'm somewhat concerned about any misses between building a facility for its end use and having all the right things in place - be it electricity, utility hook-ups or portables - to conduct the Olympic Games. It's not huge money compared to the large construction budget, but it's bridging the gap between physically building a facility and having what you need to conduct the Games.

GLISSON: What do you consider your greatest victory in the capital area?

GLISSON: Probably hiring the right guy to run it. He and I fight daily, but he's done an excellent job of controlling the program. Other than that, I'd say it's the rare cases of outlying sites where our partners have actually built Items themselves. One shining example is the city of Columbus, which went after the softball event and built that facility. Now the city has an ongoing legacy, and it hasn't cost us very much.

SGANGA: You mentioned you contract out insurance to insurance brokers and carriers. What kind of insurance does the Olympics carry?

GLISSON: We have most every insurance you have - property, commercial general liability, automobile, workers compensation, an umbrella policy, directors and officers coverage.

Probably the most unique coverage is our Games cancellation policy. Should the Games be canceled or if we have major scheduling difficulties that cause a broadcast rights holder, for example, to either not pay us or seek some other penalties, we need to cover that potential loss of revenue with a fairly complex policy.

SGANGA: Do you have any war stories about insurance?

GLISSON: Before all of our insurance was in place, we had a flag arrival ceremony when we brought the Olympic flag into Savannah after the Barcelona Games and took it around the state of Georgia on a train. The train happened to belong to the state, and I thought we had all of the insurance details worked out. Turns out we didn't.

I was sitting on the balcony of a Savannah hotel overlooking this train when I got a call from my broker telling me we weren't covered if the train was moving. As far as I was concerned, since the train was still stationary at that point, we probably were okay until the next day when we could get this straightened out. I had the phone in my hands and, as I leaned over the balcony, I saw the train start to move. Some 100,000 people were crowded near it, but fortunately it came to a halt and no one was hurt. We weathered the storm, and the state of Georgia agreed to cover it the next day.

SGANGA: When the Games are over in Atlanta, what happens to your position?

GLISSON: As I said, the financial organization is the core of the group that will turn out the lights. But our objective is to put this to bed as quickly as we can. Realistically, that probably will take a year, so some people who work for me will be around for a while to do the final financial reporting, sell assets and clear up claims. But this isn't supposed to be life work. We created a company for a very specific purpose, and its destiny is to go out of business.

SGANGA: And one last question - can you get us tickets for the Olympics?

GLISSON: If you've got $40 million for a sponsorship, I probably can fix you up.

RELATED ARTICLE: ANATOMY OF THE OLYMPIC MACHINE

* 71,172 staff and volunteers

* 50+ parking sites

* 12,200,000 tickets

* 750,000 hotel room nights

* 3,000+ hours of TV coverage

* 9,000,000+ meals served

* 10,000+ tons of trash

* 5,200+ vehicles

Technology at Games time

* 3 enterprise mainframe systems

* 80 multi-user systems

* 6,000 desktops, laptops and palmtops

* 1,000 desktop laser printers

* 1,100 copiers

* 1,100 fax machines

* 250+ local areas networks

* 13,000 phones (1,700 wireless)

* 11,500 television sets

* 6,000 pagers

* 9,500 radios