Sead Dizdarevic, the businessman who controls most of the world's Olympic 'hospitality' business, makes an enormous profit through connections and cunning.
It’s a safe bet that few Americans headed north for the 2010 Vancouver Winter Olympics have ever heard of a secretive New Jersey multimillionaire named Sead Dizdarevic.
But he’s very well-acquainted with their money.
You can’t buy an official ticket to the Games without ringing the cash register for Dizdarevic, a longtime Olympic insider who has spent tens of millions of dollars to become the official “hospitality provider” for February’s Games. His exclusive contracts give him a monopoly to sell tickets and hotel packages at steep markups in the United States.
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In effect, Dizdarevic is the official ticket scalper for the 2010 Winter Olympics.
Working behind the scenes for 25 years, Sead (pronounced “Sid”) Dizdarevic has used his powerful personal connections with the Olympic elite to gain a lock on Olympic ticket and travel-package sales in North America, Europe, Australia and other places around the globe.
He stands to make more money off the Winter Games than any single person.
Even friends acknowledge his cunning side.
“He has connections that a normal human being could only dream about,” said Djenita Pasic, a longtime friend who used to work for him. “Sead works like a maniac. As a businessman, he’s very tough. I’d say he’s even cutthroat.”
Dizdarevic and his companies, Jet Set Sports and CoSport, have perfected the art of white-glove travel treatment for corporate elite and other “Olympic Family” members whose hefty contributions make the Games possible.
Dizdarevic’s companies handle all the official sales of tickets and travel packages to the U.S. public, and all the package services in Canada.
“We win business; we don’t get business,” said Dizdarevic, who rarely grants interviews. “No one gives us anything for free.”
But critics say all that exclusivity comes with a cost — one being borne solely by Olympic fans, the Games’ consumers. Putting so many tickets in one man’s hands, without competition, creates higher prices.
“It not only has a direct impact on the price of tickets, it has a direct impact on availability,” said Houston attorney Jim Moriarty. Dizdarevic’s pricey travel packages, he said, turn the Olympics into “a playground for the rich and powerful.”
Dizdarevic, 59, is as legendary inside the Olympic world as he is unknown outside it.
A decade ago, he was a key figure in the Salt Lake Olympic bid scandal, which jolted the international Olympic movement to its core. He admitted to doling out bundles of cash to curry favor with potential power brokers, Salt Lake officials seeking an Olympics for Utah.
He not only survived that brush with the law, but he emerged as an above-board, official Games sponsor — a role he has only cemented in the years since.
After a middle-class upbringing in the former Yugoslavia, Dizdarevic turned a tiny travel business into a global empire by catering to powerful figures in the Olympic movement and incessantly cultivating new ones who could become future customers.
And it clearly has paid off. At the 2008 Beijing Olympics, Dizdarevic’s companies earned what appeared to be a record haul. Portfolio Magazine, which interviewed him last year, reported figures that showed he made about $70 million. Dizdarevic told The Times on Friday, however, that his profits were more in the range of $20 million to $30 million.
He expects his companies to cater to about 63,000 clients in Vancouver — almost as many as the 74,000 customers they served in the much-larger Beijing Games two summers ago.
Packages are key
Dizdarevic’s base of operations is in Far Hills, N.J., and his companies have seven other offices around the world. Business has more than tripled since the Athens Olympics of 2004, Jet Set President Mark Lewis said.
The key to that success is simple: Dizdarevic knows tickets are the currency of Olympic travel. Olympic organizations sell tickets to the public for as much as $1,100 a seat at premier events. For those that he controls, Dizdarevic adds at least a 20 percent markup on top of face-value prices.
But the same tickets can generate a much higher profit margin when combined with hotels, transportation and meals to form expensive packages.
These packages are, for the most part, unregulated by Olympic officials, who allow Dizdarevic’s companies to charge whatever he wants to sponsors, corporate VIPs and the general public.
Exercising his rights as an official Olympic “sponsor” for the host city’s organizing committee and many other Olympic organizations around the globe, Dizdarevic buys a secret pot of tens of thousands of tickets that he controls and resells. He also sews up large numbers of the best hotel rooms in every host city — often years in advance.
His companies amassed 125,000 tickets for Vancouver and Whistler — about 8 percent of the 1.6 million total.
“We are the largest buyer of tickets to the Olympics,” Lewis said, adding that the companies also control as many as 2,000 hotel rooms. Dizdarevic’s dual roles as a ticket broker and travel-package provider give him convenient options: He can transfer tickets from one market to the other — in some cases, his critics say, artificially creating supply and demand according to his own whim.
“In effect, CoSport and Jet Set have a monopoly on legally valid tickets,” says Moriarty, the Houston lawyer, who researched Olympic ticketing after getting scammed by another agency for Beijing tickets. “And what they seek to do is screw the consumers by bundling housing and tickets together to get more than what the housing is worth, and what the tickets are worth, because without them, you don’t go.”
In response, Dizdarevic said he’s only doing Olympic business the way it has always been done. The system that gives him total control of Olympic travel for the U.S., he argues, was designed by Olympic leaders, not him. He sees himself simply as one of many “exclusive” service providers for the Olympics.
“It’s not a monopoly,” he insisted. “There’s no such thing.”
Start with Sarajevo
Dizdarevic’s Olympic empire began in 1975 as a travel business in Staten Island, N.Y., mostly serving Yugoslav immigrants. As the 1984 Sarajevo Games approached a decade later, he spotted an opportunity — providing housing to officials and dignitaries traveling from around the world to the Games in his homeland, where he remained well-connected.
“He made the first big bucks there,” his friend Pasic said.
After the Games, Dizdarevic embarked on several business ventures. He distributed Samsung televisions and other electronics throughout the former Yugoslavia. He partnered with General Motors to sell American cars there.
He was a demanding boss and serious businessman, said Pasic, who worked for Dizdarevic’s electronics company and later as a legal consultant for his Olympic businesses. When the Bosnian war broke out in 1992, his idea of modernizing the country through electronics faltered.
“Knowing Sead, he has a plan B,” Pasic said. “He has five different options for the same thing. He’s never going to put his eggs in one basket.”
With his other businesses collapsing, Dizdarevic started Global Sports Consultants, tying up sponsorship travel packages for the 1994 Lillehammer Olympics.
There, he showed the entrepreneurial creativity that’s become his trademark. When Lillehammer, a Norwegian city of 23,000, couldn’t provide enough high-end rooms to combine in travel packages, Dizdarevic provided his own: He built a temporary hotel.
At the Athens Games a decade later, that host city, too, lacked enough hotel rooms. So he lined up luxury cruise ships to serve as floating hotels and docked them at the city’s Port of Piraeus, minutes from the Games.
Dizdarevic has never fit the traditional mold of a high-stakes international businessman.
“My clients … are very unique,” he would testify in a 1999 court proceeding. “We have an unlisted phone number. We’re not listed in Dun & Bradstreet. We are very quiet. We don’t advertise. We don’t publish.”
Dizdarevic garners loyalty and business by handling travel plans for International Olympic Committee (IOC) members, schmoozing officials from potential host cities and scooping up hotel reservations — all years in advance. He holds back some of the finest hotel rooms, restaurants and other amenities already secured for the current Olympics and offers them to bid-city officials for future Games.
For example, Dizdarevic set up travel for and wooed Vancouver officials at the 2006 Winter Games in Turin, Italy — more than a year before they signed him as their hospitality provider.
“The inside track”
Along the way, Dizdarevic became the consummate insider, learning the customs and protocols of the powerful IOC, which selects Olympic host cities.
A fuller picture of how he operated was revealed when a federal judge recently granted a Seattle Times request to unseal hundreds of pages of documents from the Salt Lake Olympic bribery case, which unfolded in the early 2000s.
Dizdarevic nurtured relationships with bid-city officials seeking Olympics of their own. When Atlanta officials prepared a bid for the 1996 Summer Games, for example, they turned to the charismatic travel broker.
“He has often been highly recommended to us as … someone who certainly has the inside track,” Billy Payne, who led Atlanta’s bid effort, wrote in a 1988 memo. “He also knows and has friendships with many IOC members.”
At the time of Payne’s memo, the Games were expected to go to Athens to commemorate the 100th anniversary of the first modern Olympics, held there in 1896.
But well before IOC members voted, Dizdarevic told Payne that Athens was out of contention. He also gave Payne what he called a “confidential” list of IOC voting members whom Payne could try to sway.
(Dizdarevic, however, was just one of many people who gave him opinions of which city would land the Games, Payne told The Times. Payne called him “honest and dependable.”)
After Atlanta won the bid for the 1996 Olympics, Payne approved an agreement between the Atlanta Organizing Committee, the USOC and Dizdarevic. Jet Set became the official travel consultant for sponsors and suppliers of the Games; in return, the Atlanta committee and the USOC would receive 3 percent of all Jet Set sales.
It was typical of Dizdarevic’s deals: All parties benefited. Dizdarevic later reported $28 million in sales and paid out $844,000 to Atlanta and the USOC.
The man who signed that profit-sharing agreement on behalf of the USOC was John Krimsky, then its deputy secretary-general. Krimsky had met Dizdarevic more than a decade earlier when Krimsky was a Pan American airline official working with Dizdarevic’s booming travel agency.
A year after signing the exclusive Atlanta agreement, Dizdarevic paid $225,000 to Krimsky’s wife to buy her company, Cooperative Sports. That purchase, for a company of little worth, was a “classic kickback scheme” to reward Krimsky for steering business Dizdarevic’s way, defense lawyers later would argue in court pleadings.
Krimsky, on the USOC’s behalf, also brokered a new 3 percent profit-sharing deal with Dizdarevic for corporate hospitality and travel at the 1998 Winter Games of Nagano, Japan, and the 2000 Summer Games of Sydney, Australia.
Delivering the cash
Dizdarevic was forced into the spotlight during the largest scandal in modern Olympic history: accusations that officials in Salt Lake City used $1 million in cash and favors to sway the votes of IOC members, who selected the city for the 2002 Winter Games.
In 1994, the year before Salt Lake City won the Games, two top officials of the local bid committee, David Johnson and Thomas Welch, asked Dizdarevic for contributions, court records show. Soon, Dizdarevic began a series of cash withdrawals from his bank accounts, always in amounts less than $10,000, which wouldn’t trigger disclosure to the Internal Revenue Service. He stacked the cash in his safe until time came to deliver it.
There was no small talk when Dizdarevic handed Johnson $17,000 in cash at a Nashville, Tenn., hotel later that year.
“I had my briefcase and my coat,” Dizdarevic would testify later. “I gave him the envelope. He thanked me. Goodbye.”
The transaction was just as quick when he gave Welch $35,000 cash in an Atlanta hotel.
Dizdarevic’s sister-in-law, Maria Jedrejcic, then Jet Set’s chief financial officer, also passed along tens of thousands of dollars to the two organizers at airports in Salt Lake City and New York.
In all, Jet Set funneled $131,000 to the two men.
Reflecting on the scandal much later, Dizdarevic defended the payments as a patriotic gesture to bring the Games to America.
“It’s my duty,” he told The Times. “I’m a naturalized U.S. citizen, and this is my new country.”
Dizdarevic also gave several Salt Lake bid organizers huge discounts on travel to other Olympics as they were marketing their city.
By 1999, the Olympic scandal had exploded, and an internal IOC investigation revealed that some IOC voting members and their families received cash, gifts and college tuition from Welch and Johnson. Ten IOC board members resigned.
With the Salt Lake Games under a cloud, new managers, led by Mormon millionaire-businessman Mitt Romney, came on board to clean house and run the Salt Lake Organizing Committee (SLOC).
The Games were back on track by 2000, when federal prosecutors charged Welch and Johnson with 15 counts of fraud and conspiracy. After prosecutors promised Dizdarevic immunity from charges, he agreed to testify in a future trial against the two men.
Meanwhile, Salt Lake officials signed up Dizdarevic as the official travel and ticket packager for the Games, in exchange for a hefty sponsor fee. Mark Lewis, then a top Romney lieutenant at SLOC, said they knew Dizdarevic would testify about his own cash payoffs as a government witness. Even so, the entrepreneur had passed the “due diligence” SLOC required of Olympic sponsors, Lewis said.
In his book “Turnaround: Crisis, Leadership and the Olympic Games,” Romney noted that Dizdarevic contributed to the Games in ways beyond just sponsorship fees.
“More than money, Sead contributed hospitality elements, tens of thousands of tickets for our youth programs, and even a magnificent Christmas party” for local Olympic employees, Romney wrote.
A year after the 2002 Winter Olympics, Johnson and Welch went on trial and Dizdarevic testified against them.
At one point, Dizdarevic was asked what his own salary was. He replied it was $2 million a year.
“Is that [a] crime to make money in this country?” he asked. “I don’t think so.”
After the government rested its case, the judge dismissed all charges, saying prosecutors failed to show “criminal intent or evil purpose.”
While others implicated in the scandal lost their jobs, Dizdarevic took a leap toward legitimacy when he became the “official hospitality provider” for the Salt Lake Games. It was a key victory: His company earned $7 million, and it has served the same official role at every Olympics since.
Sweet deal for Jet Set
Dizdarevic was at the center of controversy, again, when a scandal about tickets exploded right before the 2000 Sydney Games. A government investigation showed Sydney Olympic officials secretly had saved premium tickets for rich patrons, ignoring a strong public ticket demand.
Organizers set aside a small number of tickets to premier events for the Australian public, while offering Jet Set thousands of seats for resale, records show.
CoSport and Jet Set bought about 20,000 of the 24,000 best seats at high-demand events and sold them in packages to American sponsors and corporations that cost as much as $135,000.
Dizdarevic faced more fury when Australians discovered Jet Set had hired as a travel consultant the girlfriend of a key decision-maker in the Sydney Games, Phil Coles, also an International Olympic Committee member.
Competition cut out
With past scandals behind him, Dizdarevic had bigger plans after the 2004 Athens Games. It would be the last Olympics where Dizdarevic shared the lucrative U.S. ticket and travel market.
Another travel agency, Cartan Tours of Manhattan Beach, Calif., handled individual ticket sales for the Athens Games while Jet Set sold corporate hospitality packages.
But a new USOC contract, effective after Athens, made Dizdarevic the exclusive provider of U.S. Olympic tickets and travel through the 2012 London Games. This effectively cut out his chief competitor, Cartan Tours.
“We felt we were blindsided by individuals who make decisions for the USOC,” said Don Williams, Cartan Tours’ vice president of sales and marketing. “Why weren’t we continuing as the official agent?”
He concluded that Jet Set, eyeing higher revenues as a monopoly, simply put more cash on the table.
It’s unclear how much Dizdarevic paid to win control of the market. His current contract with the USOC has been reported to be a $20 million deal. Dizdarevic disputes that, but he refused to specify the amount.
USOC officials wouldn’t provide a copy of the contract or discuss details of it or any other contract with CoSport or Jet Set. Lisa Baird, the USOC’s chief marketing officer, said such information is kept confidential “out of respect” for Dizdarevic.
But in previous contracts, the more money Jet Set collected from travel packages sold to Olympic fans, the better it was for the USOC. It’s not clear whether the current contract has a profit-sharing arrangement similar to earlier USOC agreements.
A USOC spokeswoman confirmed Jet Set has the right of first refusal — essentially locking out competitors. It’s not an open bid process, and Dizdarevic essentially has to be fired to lose it. Dizdarevic also paid the Vancouver Organizing Committee (VANOC) an estimated $15 million in cash and in-kind contributions to be its official travel and hospitality provider for sponsors and the Canadian public through 2012.
Andrea Shaw, a VANOC vice president, said the committee chose Dizdarevic and Jet Set because “they came with an investment, and they brought expertise in their field that they’ve proven in past Games to be what we wanted.”
She and other VANOC officials refused to discuss the contract in detail. But that’s typical of the Olympic movement, which is accountable to no one and exempt from open-records laws. One thing is clear: Dizdarevic has a stranglehold on tickets and intends to keep it. He’s groomed his son, Alan, who is a vice president, to take over his empire in three years.
“I can’t live forever and work forever,” he said.
Dizdarevic will have more time to travel the world in his private jet and pursue his passion, big-game hunting. His collection of trophies reportedly includes elephant tusks, a Canadian polar bear and a lion. He told The Times he recently shot a brown bear in Russia and will have it mounted.
Dizdarevic, who last year took on a minority investor, is awaiting news about his recent bid for a share of international hospitality for the London 2012 Games.
Jet Set’s dynasty is troubling to Moriarty, the Houston attorney.
He says regular Olympic fans — and even family members of Olympic athletes who have trouble getting their own tickets — increasingly suffer under what he calls the combined greed of Olympic officials and their preferred travel agent.
“It’s the nature of monopolists,” Moriarty said. “If you find a successful way to fleece people, it’s … human nature to want to fleece them more next time. They’re going to do it until somebody puts them out of business.”