The Olympic Games have been called “the largest media event ever” (Helitzer, 1996, p. 44). The economic value of the event increases every Olympiad as the International Olympic Committee (IOC) and the organizing committees continue to seek maximum exposure and revenue.
One of the means of doing this was the end of the IOC’s policy prohibiting the participation of professional athletes. The NBA “Dream Team,” the most prominent result of the policy change, has benefited both the Olympics and the NBA.
In addition, the IOC changed the Olympic cycle to every two years (alternating winter and summer games) to enhance the consistency of media attention and to allow rights bidders to better budget by not having to pay for two Games in one year.
The Olympics are a primary beneficiary of the present sellers market for television sport as existing rights holders “fight like hell to keep what they have, ” while newer sports media powers such as News Corp. (Fox) attempt to build worldwide market legitimacy (Zipay, 1995, p. 1).
NBC Sports President Dick Ebersol explained that the prime value of the Olympics is in being “the only thing in all of television guaranteed to put the whole family in front of the TV set” (Harvey, 1995, p. 1).
A recent trend in the Olympic/television partnership has been the granting of telecasting rights so far in advance. In the summer of 1995 NBC acquired the rights to the 2000 Summer and 2002 Winter games with a “one time take it or leave it” secret offer of $1.27 billion (Lafayette, 1995, p. 1).
The deal was seen as a preemptive strike to prevent Fox from adding another major event to its schedule. By the end of 1995, NBC paid another $2.3 billion for the 2004 Summer, 2006 Winter, and 2008 Summer games (Wilson, 1995), a deal reported as the “richest contract ever in television sports” (Harvey, 1995, p. 1).
The IOC also negotiated a “revenue sharing” clause with NBC which will provide it with more money if NBC reaches certain revenue targets with its coverage. NBC’s rationale for making the deal goes beyond the hoped for profits.
By branding itself as the “Network of the Olympics, ” NBC reinforces its status as a leader in television sports, strengthens the loyalty of its affiliate stations at a time when affiliate switching is common, and helps to ensure the carriage of its cable services (CNBC, MSNBC) by using them as an outlet for Olympic events and related programming (Harvey, 1995).
The worldwide trend of television privatization and commercialization also has been of enormous financial benefit to the Olympic movement. While US television money will equal nearly $5 billion for the seven Olympiads of 1996-2008, the IOC expects to at least double that amount by selling rights to non-US television providers (Wilson, 1995).
This is a major change from the situation of the mid-1980s when US television rights contributed approximately 80 percent of total Olympic revenues (“Olympic,” 1996).
While television rights fees for the Olympics continue to set new records, the IOC has been adept at exploiting such IM trends as sponsorships. The success of the corporate-sponsored 1984 Los Angeles Summer Games prompted the IOC to establish.
The Olympic Programme (TOP) in 1985 “to offer worldwide sponsorships to multinational corporations and to develop an ongoing program for commercial business relationships with the IOC” (“Olympic,” 1996, p. 1).
The success of TOP is such that in the 1993-96 cycles, the IOC collected 34 percent of its revenues from sponsorships versus 48 percent from all broadcast rights and 10 percent from ticket sales (“Olympic, ” 1996). The Olympics stand at the apex of global sports and provide a model for other sports providers.
The combination of increasing television rights, sponsorship fees, and other marketing initiatives that are so critical to success are inspiring similar efforts in other international sports events such as the World Cup, figure skating, and gymnastics (McClellan, 1994; Rather, 1994).