Thursday, August 04, 2016

Olympic Gold

Rio 2016 will be the richest games in 120 years of Olympic history. The International Olympic Committee, which takes ten per cent of all of the money generated by the games, stands to earn more than ever in this Olympic cycle. TV companies have paid more than $4 billion to screen the 19-day festival of sport to capture an estimated 3.6 billion global audience. NBCUniversal, paid a record $1.23 billion to screen Rio 2016, far higher than the $900m it spent on Beijing in 2008. The BBC is understood to have paid close to £100m for Rio 2016. Australian network Seven said it too was on target to smash the AUD100 million advertising record set during the Sydney games in 2000, reportedly netting AUD150 - 170 million (£85 - £97 million).

The Games are expected to bring in a total of $9.3 billion in marketing revenues. The IOC also grants sponsorship rights to global “partners” like Samsung and Coca-Cola. They have each paid up to $120 million to be associated with the Olympic ideals of faster, higher, stronger.  This is before they have spent a penny plastering billboards, banner ads and television screens with their logos. Companies will each spend around four times their sponsorship fee to ensure a return, says Alex Kelham, head of the sports media group at law firm Lewis Silkin and a Commonwealth swimming gold medalist. This brings the total spend for the biggest partners close to half a billion each.

As far back as 2011, Mexican media mogul Carlos Slim reportedly paid Rio’s organising committee $320 million to secure sponsorship for his firm, America Movil, dwarfing the sums paid by brands for London. Banco Bradesco, one of Brazil’s biggest banks paid a similar sum.

With regard to the athletes themselves, the top ten best paid sportsmen and women competing collectively earned $388 million in 2015, according to Forbes. Usain Bolt, have raised millions from endorsements. Bolt’s deal with Puma is worth $10 million per year, about a third of his total corporate endorsements. The Jamaican sprinter earned $2.5 million in prize money last year. However, the reality for the average US athlete is a salary of $16,533 according to figures collected by The Washington Post. Those from many other countries receive less. In 2014 Canada found that the country's elite athletes spent $13,900 per year more than they earn. The reality is that the billions flooding in may make Rio 2016 the richest Olympics ever, but most of the athletes will see almost none of it.

The IOC says it ploughs ninety per cent of revenues back into supporting athletes via the national Olympic bodies of each country, but many say the crumbs that eventually fall from the top table are not enough to support them through the gruelling training regimes required to compete. A recent study showed that just 6 per cent of the money generated by the Olympics goes back to athletes as salaries. The rest is spent by the IOC and national bodies as they see fit.

Unlike the World Cup, the Olympics does not allow sponsors to advertise where they are most likely to be seen: the venues themselves. The IOC says that this is to protect the “purity and uniqueness” of the games.

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