Having won the 2012 Olympics for London, Coe has learned that, if he wants to carry on running the show, he's got to go through the humiliating process of reapplying for his old job.
At the end of this year, London's campaign team becomes an organising committee, and all staff will be out of a job.
Anyone who wants to stay must seek a new contract, and Coe has been told that no "special arrangements" will apply to him.
"Everything changes on 1 January," explains a colleague. "Whether Sebastian wants to stay on or not remains to be seen. But if he does, all the posts will be publicly advertised and open to applications from anyone."
There's now growing speculation that Coe intends to seek a new role, although friends tell me that rumours he'll stand for election as a Conservative Mayor of London are wide of the mark.
Instead, he's keen to remain chairman of 2012 for the next couple of years (with Keith Mills as his deputy) before moving to a role organising Britain's team for the Games. He will also return to the lucrative after- dinner speaking circuit.
An official spokesman said last night that it was too early to discuss December's reorganisation, adding: "Everything here's in a state of flux."
* Despite, or perhaps because, of his working-class north London roots, Tony Parsons is becoming hot property on the streets of Hollywood.
First, as I recently revealed, Julia Roberts snapped up the film rights to his novel The Family Way, insisting that Parsons should write the script. Now Sam Mendes is being touted as director.
Speaking at the HarperCollins summer party, Parsons gallantly credited this column for the coup. "After your piece, Sam Mendes expressed an interest in directing it," he said. "I suppose you could say that's the power of Pandora."
It's all jolly flattering, but I am duty bound to wonder if any Mendes/Parsons partnership will last. In his day job as a newspaper columnist, Parsons occasionally comments on the director's curvacious wife, Kate Winslet, with whom he is pictured, left.
"She sure does whine about her weight," reads one recent item. "Get on your exercise bike and stop moaning ... or there's always a sequel to Free Willy."
* The film director Stephen Frears is putting finishing touches to For Your Consideration, a musical about the Windmill Club in Soho.
Sadly, the all-singing, all-dancing flick wasn't plain sailing for his stars, including the magisterial Judi Dench, right. Apparently, the musical scenes proved a particularly tough nut to crack.
"It's been a nightmare," Frears tells me. "So much effort and planning goes into creating one special moment on screen, but the problem is we haven't got those old virtuosos anymore; the people that really made it work."
Speaking at a screening of Singing in the Rain, he added: "In the old days, you had people like Gene Kelly who could sing, dance and act. These days, there's no call for that. I certainly wouldn't do another musical tomorrow."
* Ken Livingstone is rightly proud of his "glass testicle" building, and - to make it a centre of remembrance for the London bombings - has opened a book of condolence in the foyer and asked the public to lay wreaths outside.
Unfortunately, Londoners prefer to pay tribute elsewhere. So when Tony Blair visited Livingstone's smart HQ yesterday, there was a minor PR problem.
"Fifteen minutes before the PM arrived, someone came round desperately looking for volunteers," says one employee. "They needed people to form a pretend queue, because no one was actually waiting to sign the book."
The problem seems to be one of public awareness. "City Hall is a bit of an irrelevance to most Londoners," he adds. "Only one bunch of flowers has arrived here - and we reckon that was also an inside job."
* Like many scions of a rock dynasty, the children of Fleetwood Mac guitarist Jeremy Spencer are determined to step out of their father's shadow. The four youngsters - who have their own band, Jynxt - recently signed their first record deal at the Marquee Club, a London venue from which Spencer (Snr) was banned in the 1970s.
"The kids were offered a deal by Halo records earlier this month," I'm told. "They agreed to sign, so long as the company persuaded the Marquee to lift its ban on their dad, so they could sign the contract in its bar."
Spencer was barred for "appearing on stage with a variety of sexual aids, including condoms filled with beer." He later quit Fleetwood Mac during a US tour, and ran off with a religious cult called the Children of God.