Hello SOTGC Community,
The corporate world thrives on overachievers and hard workers. While you’re enjoying those cool Olympic camera angles of the world’s best going for gold or the magnificence of the Opening Ceremonies, do you ever wonder who pays for that?
The business of hosting an Olympic Games is costly. In fact, it took Quebec 30 years to pay off their $1.5 B debt from hosting the 1976 games. The International Olympic Committee (IOC) is in place to help foot the bill but who is this IOC and how do they impact the U.S. Olympic Team?
- Love a good org chart. The idea of corporate structure is not lost on the IOC, which is made up of 92 representatives from all over the world. Serving under the IOC are the National Olympic Committees (ex. – U.S. Olympic Committee) and the International Federations (ex. – International Gymnastic Federation).
- Make enough to keep the lights on. Sell, sell, sell is not only the motto on in your business development department but also in the IOC. With an estimated television audience for the Rio Olympics of 3.6 billion globally, sponsors and broadcast companies are willing to pay up. Television companies globally have paid more than $4 B for broadcasting rights. The highest level of Olympic sponsorship (think McDonald’s, VISA or Coca-Cola) costs a company over $200 M and that doesn’t include their activation – actually creating a commercial or designing an ad.
- In the red. Budget line items are forever the office debate. It doesn’t matter if your department is over budget and another is under, balance is the key. Olympic host cities don’t really understand this concept. A recent study showed that no Olympic Games have come in under budget since 1960. In fact, the Rio games are over budget by 51%. The total cost is expected to be in the area $12 B of which includes $5.7 M to take care of polluted water and battle Zika and $895 M on security.
- Making it rain. Like a public company who pays out dividends, the IOC distributes all but 10% of the revenue they bring in, an estimated annual income of $1.375 B. What about the other 90%? It goes to a variety of organizations such as the Organizing Committee for the Olympic Games (including $1.5 B for the Rio Olympics), National Olympic Committees (for things like the Team U.S.A. Olympic Training Centers) and the International Sports Federations.
- Setting the example. Kind of. Every employee has had the read the memo about a new ethics policy or community service requirement issued from the company president. A good boss would set an example and follow those directives themselves but that doesn’t always happen. The IOC is charged with upholding the integrity of the games but they are certainly no stranger to controversy. In addition to systemic bribery speculations, a Washington Post investigation determined that less than 10% of the distributed revenue actually makes it to the athletes’ pockets. They also determined some members of the IOC will be paid more to watch the Olympics than the athletes that are competing. IOC members travel first class, stay in high end accommodations and receive a stipend of up to $900 a day.
Whether on the field or in the boardroom the Olympics are not for the faint of heart. Stay tuned next week for more about the athletes’ day jobs and how they make ends meet.
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