San Francisco Arts & Athletics, Inc. v. United States Olympic Committee
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SAN FRANCISCO ARTS & ATHLETICS, INC., ET AL.
v.
UNITED STATES OLYMPIC COMMITTEE ET AL.
Supreme Court of United States.
*524 Mary C. Dunlap argued the cause for petitioners. With her on the briefs were Paul Hoffman, Susan McGreivy, and Fred Okrand.
John G. Kester argued the cause for respondents. With him on the brief were Edward Bennett Williams, Vincent J. Fuller, Richard G. Kline, Edward T. Colbert, and Joseph D. Lewis.[*]
George Kaufmann and Laurence Gold filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging affirmance.
Michael Ratner, Rhonda Copelon, Randall Glenn Wick, and Richard A. Perkins filed a brief for the Amateur Athletic Union of the United States et al. as amici curiae.
JUSTICE POWELL delivered the opinion of the Court.
In this case, we consider the scope and constitutionality of a provision of the Amateur Sports Act of 1978, 36 U. S. C. ยงยง 371-396, that authorizes the United States Olympic Committee to prohibit certain commercial and promotional uses of the word "Olympic."
*525 I
Petitioner San Francisco Arts & Athletics, Inc. (SFAA), is a nonprofit California corporation.[1] The SFAA originally sought to incorporate under the name "Golden Gate Olympic Association," but was told by the California Department of Corporations that the word "Olympic" could not appear in a corporate title. App. 95. After its incorporation in 1981, the SFAA nevertheless began to promote the "Gay Olympic Games," using those words on its letterheads and mailings and in local newspapers. Ibid. The games were to be a 9-day event to begin in August 1982, in San Francisco, California. The SFAA expected athletes from hundreds of cities in this country and from cities all over the world. Id., at 402. The Games were to open with a ceremony "which will rival the traditional Olympic Games." Id., at 354. See id., at 402, 406, 425. A relay of over 2,000 runners would carry a torch from New York City across the country to Kezar Stadium in San Francisco. Id., at 98, 355, 357, 432. The final runner would enter the stadium with the "Gay Olympic Torch" and light the "Gay Olympic Flame." Id., at 357. The ceremony would continue with the athletes marching in uniform into the stadium behind their respective city flags. Id., at 354, 357, 402, 404, 414. Competition was to occur in 18 different contests, with the winners receiving gold, silver, and bronze medals. Id., at 354-355, 359, 407, 410. To cover the cost of the planned Games, the SFAA sold T-shirts, buttons, bumper stickers, and other merchandise bearing the title "Gay Olympic Games." Id., at 67, 94, 107, 113-114, 167, 360, 362, 427-428.[2]
*526 Section 110 of the Amateur Sports Act (Act), 92 Stat. 3048, 36 U. S. C. ยง 380, grants respondent United States Olympic Committee (USOC)[3] the right to prohibit certain commercial and promotional uses of the word "Olympic" and various Olympic symbols.[4] In late December 1981, the executive *527 director of the USOC wrote to the SFAA, informing it of the existence of the Amateur Sports Act, and requesting that the SFAA immediately terminate use of the word "Olympic" in its description of the planned Games. The SFAA at first agreed to substitute the word "Athletic" for the word "Olympic," but, one month later, resumed use of the term. The USOC became aware that the SFAA was still advertising its Games as "Olympic" through a newspaper article in May 1982. In August, the USOC brought suit in the Federal District Court for the Northern District of California to enjoin the SFAA's use of the word "Olympic." The District Court granted a temporary restraining order and then a preliminary injunction. The Court of Appeals for the Ninth Circuit affirmed. After further proceedings, the District Court granted the USOC summary judgment and a permanent injunction.
The Court of Appeals affirmed the judgment of the District Court. 781 F. 2d 733 (1986). It found that the Act granted the USOC exclusive use of the word "Olympic" without requiring the USOC to prove that the unauthorized use was confusing and without regard to the defenses available to an entity sued for a trademark violation under the Lanham Act, 60 Stat. 427, as amended, 15 U. S. C. ยง 1051 et seq. It did not reach the SFAA's contention that the USOC enforced its rights in a discriminatory manner, because the court found that the USOC is not a state actor bound by the constraints of the Constitution. The court also found that the USOC's "property righ[t] [in the word `Olympic' and its associated *528 symbols and slogans] can be protected without violating the First Amendment." 781 F. 2d, at 737. The court denied the SFAA's petition for rehearing en banc. Three judges dissented, finding that the panel's interpretation of the Act raised serious First Amendment issues. 789 F. 2d 1319, 1326 (1986).
We granted certiorari, 479 U. S. 913 (1986), to review the issues of statutory and constitutional interpretation decided by the Court of Appeals. We now affirm.
II
The SFAA contends that the Court of Appeals erred in interpreting the Act as granting the USOC anything more than a normal trademark in the word "Olympic." "[T]he `starting point in every case involving construction of a statute is the language itself.' " Kelly v. Robinson, 479 U. S. 36, 43 (1986) (quoting Blue Chip Stamps v. Manor Drug Stores, 421 U. S. 723, 756 (1975) (POWELL, J., concurring)). Section 110 of the Act provides:
"Without the consent of the [USOC], any person who uses for the purpose of trade, to induce the sale of any goods or services, or to promote any theatrical exhibition, athletic performance, or competition ย
.....
"(4) the words `Olympic', Olympiad', `Citius Altius Fortius', or any combination or simulation thereof tending to cause confusion, to cause mistake, to deceive, or to falsely suggest a connection with the [USOC] or any Olympic activity;
"shall be subject to suit in a civil action by the [USOC] for the remedies provided in the [Lanham] Act." 36 U. S. C. ยง 380(a).
The SFAA argues that the clause "tending to cause confusion" is properly read to apply to the word "Olympic." But *529 because there is no comma after "thereof," the more natural reading of the section is that "tending to cause confusion" modifies only "any combination or simulation thereof." Nevertheless, we do not regard this language as conclusive. We therefore examine the legislative history of this section.
Before Congress passed ยง 110 of the Act, unauthorized use of the word "Olympic" was punishable criminally. The relevant statute, in force since 1950, did not require the use to be confusing. Instead, it made it a crime for:
"any person . . . other than [the USOC] . . . for the purpose of trade, theatrical exhibition, athletic performance, and competition or as an advertisement to induce the sale of any article whatsoever or attendance at any theatrical exhibition, athletic performance, and competition or for any business or charitable purpose to use. . . the words `Olympic', `Olympiad', or `Citius Altius Fortius' or any combination of these words." 64 Stat. 901, as amended, 36 U. S. C. ยง 379 (1976 ed.) (emphasis added).
The House Judiciary Committee drafted the language of ยง 110 that was ultimately adopted. The Committee explained that the previous "criminal penalty has been found to be unworkable as it requires the proof of a criminal intent." H. R. Rep. No. 95-1627, p. 15 (1978) (House Report). The changes from the criminal statute "were made in response to a letter from the Patent and Trademark Office of the Department of Commerce," ibid., that the Committee appended to the end of its Report. This letter explained:
"Section 110(a)(4) makes actionable not only use of the words `Olympic', `Olympiad', `Citius Altius Fortius', and any combination thereof, but also any simulation or confusingly similar derivation thereof tending to cause confusion, to cause mistake, to deceive, or to falsely *530 suggest a connection with the [USOC] or any Olympic activity. . . .
"Section 110 carries forward some prohibitions from the existing statute enacted in 1950 and adds some new prohibitions, e. g. words described in section (a)(4) tending to cause confusion, to cause mistake, or to deceive with respect to the [USOC] or any Olympic activity." Id., at 38 (emphasis added).
This legislative history demonstrates that Congress intended to provide the USOC with exclusive control of the use of the word "Olympic" without regard to whether an unauthorized use of the word tends to cause confusion.
The SFAA further argues that the reference in ยง 110 to Lanham Act remedies should be read as incorporating the traditional trademark defenses as well. See 15 U. S. C. ยง 1115(b).[5] This argument ignores the clear language of the section. Also, this shorthand reference to remedies replaced an earlier draft's specific list of remedies typically available for trademark infringement, e. g., injunctive relief, recovery of profits, damages, costs, and attorney's fees. See Lanham Act ยงยง 34, 35, 15 U. S. C. ยงยง 1116, 1117. This list contained no reference to trademark defenses. 124 Cong. Rec. 12865, 12866 (1978) (proposed ยง 110(c)). Moreover, the USOC already held a trademark in the word "Olympic." App. 378-382. Under the SFAA's interpretation, the Act would be largely superfluous. In sum, the language and legislative history of ยง 110 indicate clearly that Congress intended to grant the USOC exclusive use of the word "Olympic" without regard to whether use of the word tends to cause confusion, and that ยง 110 does not incorporate defenses available under the Lanham Act.
*531 III
This Court has recognized that "[n]ational protection of trademarks is desirable . . . because trademarks foster competition and the maintenance of quality by securing to the producer the benefits of good reputation." Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U. S. 189, 198 (1985). In the Lanham Act, 15 U. S. C. ยง 1051 et seq., Congress established a system for protecting such trademarks. Section 45 of the Lanham Act defines a trademark as "any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify and distinguish his goods, including a unique product, from those manufactured or sold by others." 15 U. S. C. ยง 1127 (1982 ed., Supp. III). Under ยง 32 of the Lanham Act, the owner of a trademark is protected from unauthorized uses that are "likely to cause confusion, or to cause mistake, or to deceive." ยง 1114(1)(a). Section 33 of the Lanham Act grants several statutory defenses to an alleged trademark infringer. ยง 1115.
The protection granted to the USOC's use of the Olympic words and symbols differs from the normal trademark protection in two respects: the USOC need not prove that a contested use is likely to cause confusion, and an unauthorized user of the word does not have available the normal statutory defenses.[6] The SFAA argues, in effect, that the differences between the Lanham Act and ยง 110 are of constitutional dimension. First, the SFAA contends that the word "Olympic" is a generic[7] word that could not gain trademark protection under the Lanham Act. The SFAA argues that this *532 prohibition is constitutionally required and thus that the First Amendment prohibits Congress from granting a trademark in the word "Olympic." Second, the SFAA argues that the First Amendment prohibits Congress from granting exclusive use of a word absent a requirement that the authorized user prove that an unauthorized use is likely to cause confusion. We address these contentions in turn.
A
This Court has recognized that words are not always fungible, and that the suppression of particular words "run[s] a substantial risk of suppressing ideas in the process." Cohen v. California, 403 U. S. 15, 26 (1971). The SFAA argues that this principle prohibits Congress from granting the USOC exclusive control of uses of the word "Olympic," a word that the SFAA views as generic.[8] Yet this recognition always has been balanced against the principle that when a word acquires value "as the result of organization and the expenditure of labor, skill, and money" by an entity, that entity constitutionally may obtain a limited property right in the word. International News Service v. Associated Press, 248 U. S. 215, 239 (1918). See Trade-Mark Cases, 100 U. S. 82, 92 (1879).
There is no need in this case to decide whether Congress ever could grant a private entity exclusive use of a generic word. Congress reasonably could conclude that the commercial *533 and promotional value of the word "Olympic" was the product of the USOC's "own talents and energy, the end result of much time, effort, and expense." Zacchini v. Scripps-Howard Broadcasting Co., 433 U. S. 562, 575 (1977). The USOC, together with respondent International Olympic Committee (IOC), have used the word "Olympic" at least since 1896, when the modern Olympic Games began. App. 348. Baron Pierre de Coubertin of France, acting pursuant to a government commission, then proposed the revival of the ancient Olympic Games to promote international understanding. D. Chester, The Olympic Games Handbook 13 (1975). De Coubertin sought to identify the "spirit" of the ancient Olympic Games that had been corrupted by the influence of money and politics. See M. Finley & H. Pleket, The Olympic Games: The First Thousand Years 4 (1976).[9] De Coubertin thus formed the IOC, that has established elaborate rules and procedures for the conduct of the modern Olympics. See Olympic Charter, Rules 26-69 (1985). In addition, these rules direct every national committee to protect the use of the Olympic flag, symbol, flame, and motto from unauthor-use. Id., Bye-laws to Rules 6 and 53.[10] Under the IOC *534 Charter, the USOC is the national olympic committee for the United States with the sole authority to represent the United States at the Olympic Games.[11] Pursuant to this authority, the USOC has used the Olympic words and symbols extensively in this country to fulfill its object under the Olympic Charter of "ensur[ing] the development and safeguarding of the Olympic Movement and sport." Id., Rule 24.
The history of the origins and associations of the word "Olympic" demonstrates the meritlessness of the SFAA's contention that Congress simply plucked a generic word out of the English vocabulary and granted its exclusive use to the USOC. Congress reasonably could find that since 1896, the word "Olympic" has acquired what in trademark law is known as a secondary meaning ย it "has become distinctive of [the USOC's] goods in commerce." Lanham Act, ยง 2(f), 15 U. S. C. ยง 1052(f). See Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U. S., at 194. The right to adopt and use such a word "to distinguish the goods or property [of] the person whose mark it is, to the exclusion of use by all other persons, has been long recognized." Trade-Mark Cases, supra, at 92. Because Congress reasonably could conclude that the USOC has distinguished the word "Olympic" through its own efforts, Congress' decision to grant the USOC a limited property right in the word "Olympic" falls *535 within the scope of trademark law protections, and thus certainly within constitutional bounds.
B
Congress also acted reasonably when it concluded that the USOC should not be required to prove that an unauthorized use of the word "Olympic" is likely to confuse the public.[12] To the extent that ยง 110 applies to uses "for the purpose of trade [or] to induce the sale of any goods or services," 36 U. S. C. ยง 380(a), its application is to commercial speech. Commercial speech "receives a limited form of First Amendment protection." Posadas de Puerto Rico Assoc. v. Tourism Company of Puerto Rico, 478 U. S. 328, 340 (1986); Central Hudson Gas & Electric Corp. v. Public Service Comm'n of New York, 447 U. S. 557, 562-563 (1980). Section 110 also allows the USOC to prohibit the use of "Olympic" for promotion of theatrical and athletic events. Although many of these promotional uses will be commercial speech, some uses may go beyond the "strictly business" context. See Friedman v. Rogers, 440 U. S. 1, 11 (1979). In this case, the SFAA claims that its use of the word "Olympic" was intended to convey a political statement about the status of homosexuals in society.[13] Thus, the SFAA claims that in this case ยง 110 suppresses political speech.
*536 By prohibiting the use of one word for particular purposes, neither Congress nor the USOC has prohibited the SFAA from conveying its message. The SFAA held its athletic event in its planned format under the names "Gay Games I" and "Gay Games II" in 1982 and 1986, respectively. See n. 2, supra. Nor is it clear that ยง 110 restricts purely expressive uses of the word "Olympic."[14] Section 110 restricts only the manner in which the SFAA may convey its message. The restrictions on expressive speech properly are characterized as incidental to the primary congressional purpose of encouraging and rewarding the USOC's activities.[15] The appropriate *537 inquiry is thus whether the incidental restrictions on First Amendment freedoms are greater than necessary to further a substantial governmental interest. United States v. O'Brien, 391 U. S. 367, 377 (1968).[16]
One reason for Congress to grant the USOC exclusive control of the word "Olympic," as with other trademarks, is to ensure that the USOC receives the benefit of its own efforts so that the USOC will have an incentive to continue to produce a "quality product," that, in turn, benefits the public. See 1 J. McCarthy, Trademarks and Unfair Competition ยง 2:1, pp. 44-47 (1984). But in the special circumstance of the USOC, Congress has a broader public interest in promoting, through the activities of the USOC, the participation of amateur athletes from the United States in "the great four-yearly sport festival, the Olympic Games." Olympic Charter, Rule 1 (1985). The USOC's goal under the Olympic Charter, Rule 24(B), is to further the Olympic movement, that has as its aims: "to promote the development of those physical and moral qualities which are the basis of sport"; "to educate young people through sport in a spirit of better understanding between each other and of friendship, thereby helping to build a better and more peaceful world"; and "to spread the Olympic principles throughout the world, thereby creating international goodwill." Id., Rule 1. See also id., Rule 11 (aims of the IOC). Congress' interests in promoting the USOC's activities include these purposes as well as those *538 specifically enumerated in the USOC's charter.[17] Section 110 directly advances these governmental interests by supplying the USOC with the means to raise money to support *539 the Olympics and encourages the USOC's activities by ensuring that it will receive the benefits of its efforts.
The restrictions of ยง 110 are not broader than Congress reasonably could have determined to be necessary to further these interests. Section 110 primarily applies to all uses of the word "Olympic" to induce the sale of goods or services. Although the Lanham Act protects only against confusing uses, Congress' judgment respecting a certain word is not so limited. Congress reasonably could conclude that most commercial uses of the Olympic words and symbols are likely to be confusing. It also could determine that unauthorized uses, even if not confusing, nevertheless may harm the USOC by lessening the distinctiveness and thus the commercial value of the marks. See Schechter, The Rational Basis of Trademark Protection, 40 Harv. L. Rev. 813, 825 (1927) (one injury to a trademark owner may be "the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name" by nonconfusing uses).
In this case, the SFAA sought to sell T-shirts, buttons, bumper stickers, and other items, all emblazoned with the title "Gay Olympic Games." The possibility for confusion as to sponsorship is obvious. Moreover, it is clear that the SFAA sought to exploit the "commercial magnetism," see Mishawaka Rubber & Woolen Mfg. Co. v. S. S. Kresge Co., 316 U. S. 203, 205 (1942), of the word given value by the USOC. There is no question that this unauthorized use could undercut the USOC's efforts to use, and sell the right to use, the word in the future, since much of the word's value comes from its limited use. Such an adverse effect on the USOC's activities is directly contrary to Congress' interest. *540 Even though this protection may exceed the traditional rights of a trademark owner in certain circumstances, the application of the Act to this commercial speech is not broader than necessary to protect the legitimate congressional interest and therefore does not violate the First Amendment.
Section 110 also extends to promotional uses of the word "Olympic," even if the promotion is not to induce the sale of goods. Under ยง 110, the USOC may prohibit purely promotional uses of the word only when the promotion relates to an athletic or theatrical event. The USOC created the value of the word by using it in connection with an athletic event. Congress reasonably could find that use of the word by other entities to promote an athletic event would directly impinge on the USOC's legitimate right of exclusive use. The SFAA's proposed use of the word is an excellent example. The "Gay Olympic Games" were to take place over a 9-day period and were to be held in different locations around the world. They were to include a torch relay, a parade with uniformed athletes of both sexes divided by city, an "Olympic anthem" and "Olympic Committee," and the award of gold, silver, and bronze medals, and were advertised under a logo of three overlapping rings. All of these features directly parallel the modern-day Olympics, not the Olympic Games that occurred in ancient Greece.[18] The image the SFAA *541 sought to invoke was exactly the image carefully cultivated by the USOC. The SFAA's expressive use of the word cannot be divorced from the value the USOC's efforts have given to it. The mere fact that the SFAA claims an expressive, as opposed to a purely commercial, purpose does not give it a First Amendment right to "appropriat[e] to itself the harvest of those who have sown." International News Service v. Associated Press, 248 U. S., at 239-240.[19] The USOC's right to prohibit use of the word "Olympic" in the promotion of athletic events is at the core of its legitimate property right.[20]
*542 IV
The SFAA argues that even if the exclusive use granted by ยง 110 does not violate the First Amendment, the USOC's enforcement of that right is discriminatory in violation of the Fifth Amendment.[21] The fundamental inquiry is whether the USOC is a governmental actor to whom the prohibitions of the Constitution apply.[22] The USOC is a "private corporatio[n] *543 established under Federal law." 36 U. S. C. ยง 1101(46).[23] In the Act, Congress granted the USOC a corporate charter, ยง 371, imposed certain requirements on the USOC,[24] and provided for some USOC funding through exclusive use of the Olympic words and symbols, ยง 380, and through direct grants.[25]
The fact that Congress granted it a corporate charter does not render the USOC a Government agent. All corporations *544 act under charters granted by a government, usually by a State. They do not thereby lose their essentially private character. Even extensive regulation by the government does not transform the actions of the regulated entity into those of the government. See Jackson v. Metropolitan Edison Co., 419 U. S. 345 (1974). Nor is the fact that Congress has granted the USOC exclusive use of the word "Olympic" dispositive. All enforceable rights in trademarks are created by some governmental act, usually pursuant to a statute or the common law. The actions of the trademark owners nevertheless remain private. Moreover, the intent on the part of Congress to help the USOC obtain funding does not change the analysis. The Government may subsidize private entities without assuming constitutional responsibility for their actions. Blum v. Yaretsky, 457 U. S. 991, 1011 (1982); Rendell-Baker v. Kohn, 457 U. S. 830, 840 (1982).
This Court also has found action to be governmental action when the challenged entity performs functions that have been " `traditionally the exclusive prerogative' " of the Federal Government. Id., at 842 (quoting Jackson v. Metropolitan Edison Co., supra, at 353; quoted in Blum v. Yaretsky, supra, at 1011) (emphasis added by the Rendell-Baker Court). Certainly the activities performed by the USOC serve a national interest, as its objects and purposes of incorporation indicate. See n. 17, supra. The fact "[t]hat a private entity performs a function which serves the public does not make its acts [governmental] action." Rendell-Baker v. Kohn, supra, at 842. The Amateur Sports Act was enacted "to correct the disorganization and the serious factional disputes that seemed to plague amateur sports in the United States." House Report, at 8. See Oldfield v. Athletic Congress, 779 F. 2d 505 (CA9 1985) (citing S. Rep. No. 95-770, pp. 2-3 (1978)). The Act merely authorized the *545 USOC to coordinate activities that always have been performed by private entities.[26] Neither the conduct nor the coordination of amateur sports has been a traditional governmental function.[27]
*546 Most fundamentally, this Court has held that a government "normally can be held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the [government]." Blum v. Yaretsky, supra, at 1004; Rendell-Baker v. Kohn, supra, at 840. See Flagg Bros., Inc. v. Brooks, 436 U. S. 149, 166 (1978); Jackson v. Metropolitan Edison Co., supra, at 357; Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 173 (1972); Adickes v. S. H. Kress & Co., 398 U. S. 144, *547 170 (1970). The USOC's choice of how to enforce its exclusive right to use the word "Olympic" simply is not a governmental decision.[28] There is no evidence that the Federal Government coerced or encouraged the USOC in the exercise of its right. At most, the Federal Government, by failing to supervise the USOC's use of its rights, can be said to exercise "[m]ere approval of or acquiescence in the initiatives" of the USOC. Blum v. Yaretsky, 457 U. S., at 1004-1005. This is not enough to make the USOC's actions those of the Government. Ibid. See Flagg Bros., Inc. v. Brooks, supra, at 164-165; Jackson v. Metropolitan Edison Co., 419 U. S., at 357.[29] Because the USOC is not a governmental actor, the SFAA's claim that the USOC has enforced its rights in a discriminatory manner must fail.[30]
*548A V
Accordingly, we affirm the judgment of the Court of Appeals for the Ninth Circuit.
It is so ordered.
JUSTICE O'CONNOR, with whom JUSTICE BLACKMUN joins, concurring in part and dissenting in part.
I agree with the Court's construction of ยง 110 of the Amateur Sports Act, 92 Stat. 3048, 36 U. S. C. ยง 380, and with its holding that the statute is "within constitutional bounds." Ante, at 535. Therefore, I join Parts I through III of the Court's opinion. But largely for the reasons explained by JUSTICE BRENNAN in Part I-B of his dissenting opinion, I believe the United States Olympic Committee and the United States are joint participants in the challenged activity and as such are subject to the equal protection provisions of the Fifth Amendment. Accordingly, I would reverse the Court of Appeals' finding of no Government action and remand the case for determination of petitioners' claim of discriminatory enforcement.
*548B JUSTICE BRENNAN, with whom JUSTICE MARSHALL joins, dissenting.
The Court wholly fails to appreciate both the congressionally created interdependence between the United States Olympic Committee (USOC) and the United States, and the significant extent to which ยง 110 of the Amateur Sports Act of 1978, 36 U. S. C. ยง 380, infringes on noncommercial speech. I would find that the action of the USOC challenged here is Government action, and that ยง 110 is both substantially overbroad and discriminates on the basis of content. I therefore dissent.
I
For two independent reasons, the action challenged here constitutes Government action. First, the USOC performs important governmental functions and should therefore be considered a governmental actor. Second, there exists "a *549 sufficiently close nexus between the [Government] and the challenged action" of the USOC that "the action of the latter may be fairly treated as that of the [Government] itself." Jackson v. Metropolitan Edison Co., 419 U. S. 345, 351 (1974).
A
Examination of the powers and functions bestowed by the Government upon the USOC makes clear that the USOC must be considered a Government actor. It is true, of course, that the mere "fact `[t]hat a private entity performs a function which serves the public does not make its acts [governmental]' " in nature. Ante, at 544 (quoting Rendell-Baker v. Kohn, 457 U. S. 830, 842 (1982) (emphasis added)). Such a definition, which might cover "all . . . regulated businesses providing arguably essential goods and services," would sweep too broadly. Jackson, supra, at 354.
The Court has repeatedly held, however, that "when private individuals or groups are endowed by the State with powers or functions governmental in nature, they become agencies or instrumentalities of the State and subject to its constitutional limitations." Evans v. Newton, 382 U. S. 296, 299 (1966) (emphasis added). See Terry v. Adams, 345 U. S. 461 (1953) (private political association and its elections constitute state action); Marsh v. Alabama, 326 U. S. 501 (1946) (privately owned "company town" is a state actor). Moreover, a finding of government action is particularly appropriate when the function performed is "traditionally the exclusive prerogative" of government. Jackson v. Metropolitan Edison Co., supra, at 353. Patently, Congress has endowed the USOC with traditional governmental powers that enable it to perform a governmental function.[1]
*550 The USOC performs a distinctive, traditional governmental function: it represents this Nation to the world community. The USOC is, by virtue of 36 U. S. C. ยงยง 374 and 375, our country's exclusive representative to the International Olympic Committee (IOC), a highly visible and influential international body. The Court overlooks the extraordinary representational responsibility that Congress has placed on the USOC. As the Olympic Games have grown in international visibility and importance, the USOC's role as our national representative has taken on increasing significance.
Although the Olympic ideals are avowedly nonpolitical, Olympic participation is inescapably nationalist. Membership in the IOC is structured not according to athletes or sports, but nations.[2] The athletes the USOC selects are viewed, not as a group of individuals who coincidentally are from the United States, but as the team of athletes that represents our Nation. During the House debates on the Amateur Sports Act, Representative Michel expressed it well:
"American athletes will go into these same [1980 Olympic] games as products of our way of life. I do not believe that it is the purpose of the games to set one way *551 of life against another. But it cannot be denied that spectators, both in Moscow and all over the world, certainly will have such a thought in mind when the events take place. So it would be good for our nation and for the athletes who represent us if the cooperation, spirit of individuality, and personal freedom that are the great virtues of our system are allowed to exert their full influence in the games." 124 Cong. Rec. 31662 (1978).
Every aspect of the Olympic Pageant, from the procession of athletes costumed in national uniform, to the raising of national flags and the playing of national anthems at the medal ceremony, to the official tally of medals won by each national team, reinforces the national significance of Olympic participation. Indeed, it was the perception of shortcomings in the Nation's performance that led to the Amateur Sports Act of 1978. In the words of the President's Commission, "[t]he fact is that we are competing less well and other nations competing more successfully because other nations have established excellence in international athletics as a national priority." 1 Final Report of the President's Commission on Olympic Sports 1975-1977, p. ix (1977) (Final Report) (emphasis added).
Private organizations sometimes participate in international conferences resplendent with billowing flags. But the Olympic Games are unique: at stake are significant national interests that stem not only from Pageantry but from politics. Recent experience illustrates the inherent interdependence of national political interests and the decisions of the USOC. In his State of the Union Address of January 23, 1980 (a forum, one need hardly add, traditionally reserved for matters of national import), the President announced his opposition to American participation in the 1980 summer Olympic Games in Moscow.[3] The opposition was not premised on, e. g., the financial straits of a private corporation, but *552 on the implications of participation for American foreign policy. Echoing the President's concerns, the House of Representatives passed a resolution expressing its opposition to American participation.[4] In a speech on April 10, 1980, the President threatened to take "legal actions [if] necessary to enforce the decision not to send a team to Moscow."[5] Shortly thereafter, with the national and international stakes of the USOC's decision set forth by the President and Congress, and with reports in the press of possible cuts in federal aid to the USOC,[6] the USOC announced that the United States would not participate in the 1980 Olympic Games.[7]*553 Although the lesson had been learned long before 1980,[8] this sequence of events laid bare the impact and interrelationship of USOC decisions on the definition and pursuit of the national interest.
There is more to the USOC's public role than representation. The current USOC was born out of governmental dissatisfaction with the performance of the United States in international athletic competition. This dissatisfaction led Congress to grant the USOC unprecedented administrative authority over all private American athletic organizations relating to international competition. The legislative history reveals, contrary to the Court's assumption, ante, at 544-545, that no actor in the private sector had ever performed this function, and indeed never could perform it absent enabling legislation.
In 1975, President Ford established a Commission on Olympic Sports to investigate the deteriorating performance of America's athletes at the Olympic Games, and to recommend *554 solutions. The Commission traced the problems to a lack of central coordination, and "recommend[ed] the institution of a central sports organization for the United States." 1 Final Report 11-13.
In enacting the Amateur Sports Act, Congress gave life to the Commission's primary recommendation, that the USOC be restructured[9] to assume this new role of "central sports organization." See H. R. Rep. No. 95-1627, pp. 8-9 (1978). It greatly expanded the charter of the USOC, giving it "perpetual succession and power to serve as the coordinating body for amateur athletic activity in the United States directly relating to international amateur athletic competition." 36 U. S. C. ยง 375(a)(1). It also granted the USOC with the to recognize an organization as the "national governing body" for a particular sport, and endowed the USOC with the power to resolve all conflicts and disputes that would arise among the multitude of private organizations and individuals over which it would hold sway. See 36 U. S. C. ยงยง 375(a)(5), 382b.[10] Thus, in the Amateur Sports Act, Congress granted the USOC the authority and ability to govern national amateur athletics related to international competition.
The public hearing and reporting requirements of the Act reflect the public nature of the USOC's mission. Under *555 ยง 375(b)(2), the USOC may not amend its constitution or bye-laws unless it "gives to all interested persons, prior to the adoption of any amendment, an opportunity to submit written data, views, or arguments concerning the proposed amendment for a period of at least 60 days after the date of publication of the notice." Similarly, the USOC may not recognize a particular amateur sports organization as the "national governing body" for that sport without first holding a public hearing on the matter. 36 U. S. C. ยง 391(a). The Act institutionalizes yet another public check on the USOC by requiring it annually to "transmit simultaneously to the President and to each House of Congress a detailed report of its operations for the preceding calendar year, including a full and complete statement of its receipts and expenditures and a comprehensive description of the activities and accomplishments of the [USOC] during the preceding year." 36 U. S. C. ยง 382a(a). The USOC must also submit annual "detailed" reports to the President and Congress on the expenditures of funds made available to it by Congress, and provide "detailed and comprehensive" descriptions of the programs it expects to finance out of Government grant money in the coming year. 36 U. S. C. ยงยง 382a(b), 384(b).
The function of the USOC is obviously and fundamentally different than that of the private nursin