The Olympic Games held every four years are not just an important sports event. The countries competing in the 2000 Olympics in Sydney, Australia total 199, more than half the number of members of the United Nations which is the world's largest international organization.
With an aim at of globalization, rights to broadcast major sports events such as the Olympics are sold far in advance, and they are aired practically everywhere. Sports events have penetrated political and other barriers among human beings for a long time, and they haved serve as a major motive behind recent leaps in the technology of communication and broadcasting.
Who's Paying for all of
This? When television broadcasting emerged in the 1930's, the first Olympic Games to be televised were the 1936 games hosted by the Nazi regime in Berlin. The total number of "silver screen" spectators was approximately 40,000, while another 1,800 or so covered the Olympics through other conventional means of the time. The games were broadcast by 40 radio stations worldwide.
Obviously, these numbers are quite modest in comparison to the numbers today. The broadcasting industry sets new records every year that far exceed those set on the tracks and fields of the Olympics games themselves. For example, the price for broadcasting rights rose from $18 million for the Munich Olympics in 1962 to $700 million for the Atlanta Olympics in 1996, and surpassed the $1 billion mark for the millenium year games. In fact, the U.S. NBC television network bought the live broadcasting rights for the Olympic Games through the year 2008 for $3.5 billion.
Despite the stupendous amount it paid for those rights, NBC landed what it expects to be a commercially lucrative deal - as it did in 1996 when it made a net profit of over $100 million after paying for broadcasting rights and spending an additional $456 million to cover the games. The network scored another record that year too, reaching a billion viewers, including 200 million Americans, worldwide.
Commercials Target Women. The rate for every 30 seconds of commercial time during the 2000 Olympics has soared to $500,000. The question becomes, "How do networks decide to whom to sell commercial broadcasting time, and how do their decisions impact viewers?"
To answer this question, we offer an example.
The Director of the NBC Sports Section explained its publicity policy for the 1996 Olympics. Because opinion polls had indicated that 72% of the shopping decisions in the U.S. are made by women, NBC targeted women in its publicity campaign. The network launched a poll of 10,000 to determine the sports that women like to watch most. Most of the respondents were women. After exhaustive research and planning, NBC decided to devote prime time coverage to the Olympic sports favored by women, particularly American women.
This decision was purely economic. Barring that consideration, no real concern was given to the sports preferences of male or female viewers, inside or outside of the United States.
The Economic Benefits of the
Globalization of Sports. The money paid by television networks to air the games goes to the International Olympic Committee which has become a "commercial corporation" in the true sense of the term.
Until the 1976 Olympics in Montreal, purely sports considerations played a role, albeit marginal, in key-decision making by the International Olympic Committee. However, that year, a sudden financial loss befell the committee, and its members immediately decided to revise the "commercial formula" it was using. Hence, the dawn of commercial sponsorship - the selection of internationally renowned companies like Adidas, a manufacturer and retailer of sportswear, to link their goods to the Olympic Games.
A study by the European Academy for Sports describes sports as a major future economic sector that can contribute greatly to the economic prosperity of European countries. In 1994, the European Commission mentioned sports in its white book on the labor market as a main source for creating jobs and achieving economic growth. Studies in Germany report that consumers spend DM600 million per year on clothing and apparatus for or symbolic of their favorite sports, and that 11% of the population own at least one commodity bearing a logo from the football world.
For some time, involvement in sports has been a means for prospering economically, with sports being one of the channels by which money has flowed from the south to the north, or to countries where famous sports figures live. Huge proceeds pour into the coffers of the countries which host international competitions, explaining the "battles to the death" in which rivals engage - as we saw weeks ago preceding the choice of Germany to host the 2006 World Football Championship. Revenues generated during international sports events can exceed those brought in by tourism for a whole year in some developing countries known for their tourist attractions.
Commercial sponsorship: the road to
billions. Following the financial woes that accompanied the 1976 Olympics, preparations started for the 1984 Olympic Games that were to be held in Los Angeles - given that the 1980 Moscow Olympics were being held in a communist environment that did not permit the application of the new "capitalist" formula.
The first step in these preparations, as is the case with any corporation, was to select "competent businessmen" to strategically design and carry out the plan. One of these men was Juan Antonio Samaranch, then chairman of the International Olympic Committee, and another was Horst Dassler, President of Adidas Sportswear and a magnet for the "sports publicity" world. The new management came up with what was dubbed "commercial sponsorship" through which sponsors would be allowed the exclusive right to use the Olympics logos with their own on players' uniforms, souvenirs, Olympics memorabilia, etc., and the right to display their company's logos in Olympic stadiums and courts. These rights, of course, are in addition to sponsors' commercial advertising in which they use sports heroes to attract more viewers and influence their purchasing decisions.
International Olympic Committee makes
$1.5 billion from commercials. Out of roughly $1.5 billion that is paid to the International Olympic Committee from commercials alone every time the Games take place, the revenues from commercial sponsorship have been rising steadily - from $100 million for the 1988 Seoul Olympics to $880 million for the 1996 Atlanta Olympics where Coca Cola led the ten sponsors spending $1.5 billion to advertise its products throughout the 130 countries where the Games were aired. That boosted the company's sales by 17% during the three months that preceded the Olympics alone.
In commercials aired during the Games, a company's name or logo is heard or seen by 2 billion viewers whose receptivity while watching their favorite sports, according to advertising masters, is at its highest.
This "visual contact" (that fraction of a second when the viewer's eyes fall on the product being advertised), according to Adidas, averages 40 billion times during every Olympic Games.
In addition to the direct impact of commercials, to an even greater extent te companies count on indirect publicity such as the mention of a certain company as the sponsor of a particular sports star in news bulletins, sports reports, etc.
Olympics Logo Is More famous Than Heads
of State . A study by the Economics Institute in Cologne, Germany reported that the five interlaced rings in the Olympics logo is known by over 90% of Germans, Americans, Japanese and Britons - a percentage actually considered to be unattainable when polling people about their familiarity with the names of their heads of state or the ruling party in their country. This explains the millions of dollars that companies easily pay to have their names and logos married to the Olympics logo in commercials for countless products and commodities - ranging from sports clothing to children's toys.
The same commercialism is found in other major sports events. For instance, the German telecommunications company Telecom is implementing its worldwide expansion plans through the sponsorship of German sportsmen in the Tour de France bicycle race. After a German bicyclist won the race in 1996, and another of his compatriots followed suit in 1997, Telecom started its move on the world arena, confident that its name was now familiar to viewers of the Grand Prix events of the past two years.
The money spent on commercials linked with sports totals $1.3 billion per year - almost double that in advertising to promote books, plays, films and other cultural items; and five times what is spent on advertising related to science and the environment
