The Economics of The Olympics

Introduction

• Intel is bringing Tokyo 2020 to the world.
• International Olympic Committee (IOC) runs marketing programs for the Olympic Games.
• Importance of marketing and media deals in powering the Olympics.

Revenue Generation

• IOC generates billions through broadcast and sponsorship rights.
• Revenue has increased over time:
  • $4 billion from 2006 & 2008 games.
  • Over $5 billion from 2010 & 2012 games.
  • Almost $6 billion from 2014 & 2016 games.
• Comparison with FIFA: Earned about $4 billion from the 2014 World Cup.

Broadcast Rights

• First awarded in 1948 to BBC.
• Currently, broadcast rights make up 75% of IOC's income.
• Beijing Olympics broadcast in 220+ countries:
  • China Media Group (China)
  • Discovery (Europe)
  • CBC (Canada)
• Since 1997, North American companies pay more for rights than the rest of the world combined.
• NBC’s significant role:
  • Televised every Olympics since 2000.
  • $7.75 billion deal for exclusive U.S. broadcast rights through 2032.

Differences Between Summer and Winter Olympics

• Summer Games larger in scale:
  • About 200 competing countries.
  • More athletes compared to Winter Games.

Sponsorship and Brand Partnerships

• Olympic Partner Program launched in 1985.
• 13 top tier sponsors, e.g., Coca-Cola, Airbnb, Alibaba.
• Sponsors collectively paid around $1 billion for 2014 & 2016 Olympics.
• Use of Olympic logos and rights:
  • Additional advertising spends to capitalize on sponsorship.
  • Multi-year deals to ensure continuous sponsorship.

Challenges and Political Concerns

• Sponsors low profile in Beijing Winter Games due to US-China tensions.
• Examples of past campaigns:
  • Coca-Cola with Nathan Chen in Times Square.
  • Visa's promotion of athletes and payment devices.
• Concerns over human rights issues in China.
  • Sponsors balancing business in China and global reputation.

Future of Olympic Broadcasting

• NBC promoting its streaming service, Peacock:
  • Over 9 million paying viewers.
  • $3 billion content investment in 2022.
• Issues with Tokyo Summer Games coverage on Peacock.
• NBCUniversal to provide full live coverage on Peacock’s premium tiers for Beijing Games.

Conclusion

• Potential future role of online broadcasting services like Peacock in Olympic broadcasting deals.