Sarah Hughes is out.

Michelle Kwan is in.

After a day that had the United States Figures Skating Association and local organizers working overtime, Kwan -- an American icon long before Hughes became an American idol -- was announced as the new headliner for next week's Smart Ones Skate America competition in Spokane.

Hughes, the 2002 Olympic gold-medal winner from Long Island, N.Y., will skip Skate America because of a tear in the muscle behind her right knee. Event organizers and the USFSA found out about the 17-year-old high school senior's injury on Thursday, less than a week before the first Grand Prix event of the season is scheduled to begin at the Spokane Arena.

Kwan, originally expected to sit out the Grand Prix season, agreed Friday afternoon to come to Spokane. Her long list of achievements includes a bronze medal at the 2002 Olympics, four World and six National titles. The 22-year-old from Torrance, Calif., has won the last three Skate Americas and six of the last seven.

With the addition of Kwan, local organizer Toby Steward breathed a sign of relief. Since Monday, Steward was told two of the three Olympic gold medalists scheduled to compete would not be here. Reigning Olympic pairs champions Elena Berezhnaya and Anton Sikharulidze were originally listed as participants but were not entered by the Russian Figure Skating Federation. The two have gone the same route as fellow gold-medal winners Canadians Jamie Sale and David Pelletier. Both pairs have instead committed to the 2002 Stars on Ice tour.

In addition, State Canada announced reigning Olympic ice dancing silver medalists Shae-Lynn Bourne and Victor Kraatz will not compete. Bourne has been receiving

medical attention for Achilles tendinitis.

With Hughes pulling out, only Russia men's skater Alexei Yagudin carries the clout of Olympic gold.

Hughes has been the poster child of the Spokane event. Her picture has been in print advertisement and plastered on posters all over town. Two six-story banners picturing Hughes have been hanging from the Metropolitan Financial Center on First Avenue since Oct. 2.

Barb Beddor, Steward's promotions partner, said she received a FedEx package from Hughes' dad, John, on Thursday containing one of Hughes' costumes. It was to be displayed in a window at Nordstrom along with other competitors' costumes as part of the Skate America celebration.

"I got past the point (of panic)," Steward said Friday afternoon. "Someone offered me some LifeSavers."

According to Bob Dunlop, USFSA director of media relations, Hughes is disappointed she has to miss the event. It will be the first major competition she will miss.

"It (her injury) was not something that suddenly happened. It was probably an accumulation. She was trying to compete. The goal was to come to Spokane next week and things happened and she had a sign that something was wrong," Dunlop said.

Hughes also will miss Skate Canada, which is Oct. 31-Nov. 3. The events are the first of six qualifying events of the Grand Prix of Figure Skating series. Skaters will be awarded prize money and points, and the top six skaters and couples with the most overall points will advance to the Grand Prix of Figure Skating final in St. Petersburg, Russia, next year. Skaters compete in two of the six events.

Kwan, meanwhile, is not receiving appearance money for entering Skate America, Dunlop said. Steward said he hopes Hughes will make a non-skating appearance next week since

Skate America already was on her schedule.

"Obviously, you hate to lose the gold medalist, but everyone knows what Michelle is made of and what she's accomplished," Steward said.

Kwan, under new coach Scott Williams, already won the Campbell's International Figure Skating Classic two weeks ago in Daytona Beach, Fla. Seventeen-year-old American Ann Patrice McDonough won silver and Hughes won bronze at the free skate event.

McDonough, the reigning world junior champion, is scheduled to compete here. Ticket sales have been good for the event. Steward is optimistic Spokane will break a Skate America ticket-sales record of 26,588. The total number of tickets available over the four days is 40,000. Nearly 24,000 tickets have been sold, leaving good seats in package or single-session form.