Andrew Hughes, Lecturer, School of Management, Marketing & International Business at Australian National University
|Nothing is sacred and nothing can’t be bought, sold or sponsored in the modern era of the Olympics. If you can’t afford it, then you won’t win it.
Sport in 2012 has become a massive global industry. The biggest single event of this industry is the summer Olympics, held every four years in a city big enough (stupid enough, some say) to take on the mammoth financial and logistical task.
As money has poured in to the Games, so too has the number of individuals and organisations willing and able to make a profit from them. So, where is the money focused on at the Olympics? Let’s find out.
The venue/city/nation silly enough to have said yes
A recent working paper by Bent Flyvbjerg and Allison Stewart from Oxford found that the Olympic Games have never run to budget. The cost over-run for the $15 billion 2012 Games is so far 101%.
Any Olympic Games needs lots of venues. And some venues, such as main stadiums for both ceremonies and athletics or the Games Village itself, don’t come cheap. The building and construction companies who can build these venues love the Olympic games, as they always make a tidy profit.
Then there’s the logistics of the venues. People, resources, transport, shops all need to be built to cater for huge amounts of people entering and leaving the venue in a short time. Building a mini-city in a fraction of the time it would take normally can only be done by paying people lots of money to make it happen. Are the benefits worth the cost of a three-week event most people will have forgotten about only weeks later?
The sporting brands
Every four years some sports get the sort of prime time coverage they could only dream about normally. For some sports this is their one and only chance to showcase the brand to potential athletes, sponsors and television companies.
Some sports have used the Olympics as market research, changing rules or events to ensure their best possible face is presented to the world. Anything the opposite of the Olympic motto (slower, lower and weaker) is soon expunged from the world stage.
Cycling did exactly this: some road and track events have been dropped for London. Swimming caved in to demands from the IOC and rescheduled events to fit into prime time US TV scheduling. Triathlon chose the event distance that fitted nicely into a two-hour slot on the telly, rather than going with the Hawaii Ironman distance, the sport’s benchmark.
This has led to some sports internally feuding over what is more important: the Olympics or the sport itself? But Olympic recognition is everything to some of these sports. Fencing, shooting, canoeing, rowing and kayaking lack the massive television rights and sponsorship deals of the serious global professional sports.
Sports such as rowing would never get coverage without the Olympics – they’ll go all out to get it. Matthew Schnall
Olympic recognition equals government assistance, crucial to the long term survival of these sports at national level. Without it many Olympic sports in Australia would be languishing, surviving only on the goodwill of volunteers or lamington fund-raising drives. This means that many sports are willing and able to do whatever it takes to stay in the Olympics, regardless of the long-term consequences.
For some this has meant that the fight against drug cheats has been relegated to the outside lane and raising the profile of female athletes is still based around their sex appeal than their sporting appeal.
The athletes/personal brands
The athletes of the Olympic sports love the Games. And not just because it is the culmination of years of training and sacrifice beyond the scope of most of us. This is their chance to show off in front of sponsors. To build their personal brand.
Athletes use the Games to spruik their wares to new sponsors or get bigger and better deals from existing ones. To some athletes, getting the big sponsorship deal is just as big as getting the gold medal. It’s understandable: if you come from a country such as Ethiopia, a deal with Nike could set you up for life.
The IOC in 2012 resembles a large multi-national corporation more than an idealistic sporting organisation. Anything is for sale. Just ask. No seriously, just ask.
Want the Olympic rings by your brand? Just ask. And pay. Smabs Sputzer/Flickr
The Olympic Rings next to your brand? Done. That’s about $50 million for the global partnerships. Hosting rights? Done, just make sure you can afford the roughly $5-10 billion for hosting the Games.
Your sport wants entry in? Done, but we tell you how that happens, when your sport is on during the Games and anything else we want, we get. Television rights in your country? Done! In Australia Channel 9 and Foxtel paid $126 million for the 2012 Games. That’s $51 million more than what Channel 7 paid for the V8 Supercar rights for the entire year, and more than enough for the yearly combined rights for soccer and basketball.
In their defence, the IOC is only taking advantage of market conditions and building a nice nest egg to ensure the long-term viability of the Games in case of a downturn. But stakeholders – sponsors – want a lot for their investment. The US television networks can change events that don’t fit in with their scheduling. Corporations who sponsor the games, such as Dow Chemical, aren’t judged on ethical and social criteria before being allowed to become sponsors.
Chasing the dollar is one thing, but forgetting the Olympic ideals in the pursuit of profit and stakeholder return on investment is taking the shine off the Olympic brand. There is no doubt that the experience of attending the Olympic Games is a once-in-a-lifetime for many. But Gen Y don’t connect with sport in the same way as previous generations. Even with the inclusion of more X Games sports such as BMX and windsurfing, the future market looks tough for the Games unless Angry Birds becomes an Olympic sport.
The brand is costing itself so much by allowing so many to take advantage of their own ideals in the name of the Olympic one. Do the clouds that hover above the Games have silver linings? Or do they herald the coming of the Bronze Age for the Olympic movement?
Andrew Hughes does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.