How are broadcasts and sponsorships handled at the Olympics?
Hosting the Olympics can cost the host nation billions of dollars. According to a recent study conducted by Stanford University in the UK, the average sport-related cost of hosting the Olympics is around US $ 12 billion.
Non-sporting costs, including road, airport, transportation and hotel infrastructure costs, typically cost multiples of this value. Estimates suggest that the 2008 Beijing Olympics were the most expensive in the history of the Summer Olympics, costing a whopping $ 44 billion.
Of those massive amounts, $ 6.8 billion was the estimated cost of the game itself, and the remaining cost was around $ 3 billion related to infrastructure such as the Beijing Airport terminal.
but Tokyo 2020 The cost of the game is expected to be around $ 20 billion. Of the total estimated cost, 45% is provided by the Organizing Committee for the Tokyo Olympic and Paralympic Games (Tokyo 2020) (OCOG) and 45% by the Tokyo Metropolitan Paralympic Games (TMG), and the remaining 10% are owed to the government. from Japan.
A certain percentage of the amount spent by the OCOG is donated by the International Olympic Committee (IOC). This IOC contribution is generally received in the form of rights-sharing with television and constitutes additional income generated by national commercial activities promoted by the authorized use of the Olympic mark along with the OCOG symbol.
According to the IOC 2021 marketing and factual record, the actual IOC Rio 2016 contribution was around US $ 1.5 billion, while the previous three editions of the Olympic Games in London, Beijing and Athens were $ 1. US $ 4 billion and 13 received US $ 100 million and US $. $ 900 million each from the IOC.
In addition, the IOC assists the OCOG for each match by managing the national sponsorship, ticketing and licensing programs in the host country. The OCOG for Rio-2016 was able to generate 2.6 billion US dollars thanks to all these means.
The IOC is a non-profit organization committed to leading the Olympic movement and helping to build a better world through sport. Its operation is based on four years called the Olympiad, where the Summer Olympics, Winter Olympics and Youth Olympics are held.
During the last cycle of completion of the 2013-2016 Olympic Games, the IOC generated total revenues of US $ 5.7 billion. Most (~ 90%) of this amount was provided by broadcast and commercialization rights. Of the total US $ 5.2 billion revenue from broadcast and marketing, US $ 4.2 billion came from broadcast alone, with marketing contributions of US $ 1 billion.
IOC Broadcast Recipes
As the owner of the Olympic broadcast rights, the IOC is responsible for providing media companies around the world with television, radio, mobile and Internet coverage. Rights agreements are negotiated by the IOC with the primary purpose of ensuring that the game is accessible to as many people as possible and has the widest possible audience around the world. Over the past three decades, the broadcast revenues of these rights-holding broadcasters (RHBs) have been a major source of income for the IOC.
2020-The Tokyo Olympic Games will be broadcast worldwide by the Olympic Broadcasting Services (OBS), founded in 2001 by the IOC as the permanent host of the Olympic Games, to 5 billion potential viewers.
From 2020 in Tokyo, OBS will produce around 9,500 hours of content in just over two weeks. This includes approximately 3,800 to 4,000 hours of live reporting on sports and ceremonies, which is 30% more than the content produced at the Rio 2016 Games.
In 2021, for the first time at the Olympics, RHB will take the archery range to the next level and display biometric data to reveal the inner workings of Olympic shooters. OBS is working with Global Olympic Partner Panasonic to provide live heart rate monitoring using non-contact vital sensing technology.
Four cameras will be installed approximately 12 meters from the athlete to focus on the face and analyze the slight changes in skin color caused by the contraction of blood vessels from the video shot. Through the on-screen graphics, spectators can witness the changes in heart rate and the adrenaline rush that the shooter’s body feels when shooting an arrow.
Today, 29 rights-holder broadcasters (RHBs) have partnered with the IOC to broadcast live broadcasts to billions of people around the world.
In 2011, US media giant NBS signed a $ 4.38 billion deal with the IOC for broadcast rights until 2020. In 2014, an extension was signed in Tokyo to allow NBC to broadcast from IOC-related events up to the 2032 Olympic Games. an additional US $ 7.75 billion.
Another US media and entertainment company, Discovery Communications, and its pan-European sports broadcaster, Eurosuport, will host television in European markets such as the UK, Germany, France, Spain and Switzerland between 2018 and 2024. Acquisition of multiplatform rights. With a transaction worth US $ 1.3 billion.
Back in India, Sony Entertainment Television (SET) won the television rights to the Tokyo 2020 Olympics for just US $ 13.0 million, but in the previous Rio 2016, Star Network s’ is added to the IOC. Provided US $ 20.0 million.
IOC Marketing Recipes
Olympic marketing and sponsorship revenue is generated primarily through the Olympic Partners Program (TOP), a global sponsorship program managed by the IOC.
The IOC created the TOP program in 1985 to develop a diverse revenue base for the Olympic Games and to establish long-term corporate partnerships that benefit the entire Olympic movement. The TOP program spans a four-year term called the Olympiad.
The TOP program supports the Olympic Games, the Olympic Winter Games, the National Olympic Committee (NOC) and the IOC Organizing Committee. The TOP program provides each Global Olympic Partner with exclusive global marketing rights and opportunities in the specified product or service category.
Global marketing rights include partnerships with the IOC, all active NOCs and their Olympic teams, and the OCOG at each Olympic Games. TOP Partners can exercise these rights worldwide and energize marketing initiatives with all members of the Olympic movement participating in the TOP program.
In the 2013-2016 Olympic Games, the TOP program consisted of 12 partners, serving the 205 participating NOCs and generating $ 1 billion in revenue. These 12 partners included big names like Bridgestone, Coca-Cola, Atos, Dow Chemicals, GE, Intel, Samsung, Toyota, Omega, Visa, Panasonic, Proctor & Gamble.
Once the 2016 cycle is over, three new partners, Airbnb, Alibaba Group and Allianz, will work with the CIO to serve at least until the end of the current cycle. 31 2021.
In addition to the TOP program, at the local level, the National Olympic Sponsorship Program is managed by the host National OCOG under the leadership of the IOC. The program supports the operations of the OCOG, the planning and organization of tournaments, the NOCs of the host country and the Olympic teams of the host country.
The National Olympic Sponsorship Program grants marketing rights only in the host country or region. The host country NOC and the host country Olympic team will participate in the OCOG sponsorship program as the marketing plan agreement requires the OCOG and the host country NOC to centralize and coordinate all marketing initiatives in the host country.
Between 2016 and Rio, 53 cohabiting partners participated in the program, providing the OCOG with an estimated turnover of US $ 850 million. Until 2020-Considering Tokyo, with the exception of 15 global partners acquired through the TOP program, the OCOG has 15 additional gold partners, including names such as Canon, ASICS, Fujitsu and ANA, Mitsubishi Electric. We managed to install 32 official partners such as Cisco etc.
It is estimated that the Tokyo OCOG is targeting revenues of up to US $ 1.3 billion from these additional sponsors.
History of Olympic Marketing and Sponsorship
In 1896, the first modern Olympic Games in Athens were sponsored by the cousins of Greek businessmen Evangelis, Constantinos Zappa and George Belov. Aberov sponsored the second renovation of the Panatenak Stadium. He donated US $ 120,000 to host the game in Athens, which received a statue and a battleship that bears his name.
Then, from 1912 in Stockholm, there was not enough enthusiasm among the companies of that time to attend this global event. In Stockholm, 10 Swedish companies came together to take photos and buy the only right to sell Olympic memorabilia. It was in Paris in 1924 that the billboard appeared for the first time in history and in the viewfinder of the only Olympic site.
1928-Amsterdam, the first current Coca-Cola partner began its journey with the Olympic movement. Helsinki-1952 was the first Olympic Games to launch an official international marketing program, with companies from 11 countries providing products and services, from food for athletes to flowers for medalists.
1964-Tokyo was the first to generate over $ 1 million in revenue from sponsors. It was until 1988-Seoul that the IOC decided to launch the TOP program, which continues today.
Since then, it has evolved several times to reach its current shape and form. During this period, some controversies arose which called into question the relevance of brands such as McDonald’s and Dow Chemical, and were correctly answered by the IOC.
The Olympic movement was able to reach the front door of the general public through expensive broadcasts and sponsorship deals. The proceeds earned by the IOC not only helped organize the Summer, Winter and Youth Olympic Games, but also helped the IOC to finance the NOC and the International Federation (IF).
The ever-changing digital market space poses interesting challenges for CIO, broadcast and marketing by making the ecosystem profitable enough for new organizations to reap their benefits. Maximize the income from your transactions.