Can a dollar figure be put on the Olympics? The answer is yes, according to a July 25 CNN article entitled, “Is the Olympics worth more than Google?”
The article dissects a report released by Brand Finance, a worldwide consultative firm, which reveals that the XXX Olympics in London are worth $47.5 billion, second only to Apple at $70.6 billion and just ahead of Google at $47.4 billion. This particular view is based on figures in the International Olympic Committee’s financial statements. The worth of the games is reportedly more than that of Coca-Cola, Samsung and General Electric.
Brand Finance’s mission is to show “strongly branded organizations … how to maximize their value through the effective management of their brands and intangible assets.” (brandfinance.com) Their clients include investment banks, corporations and tax authorities.
To put this almost incomprehensible number into historical perspective, the Olympics is worth 134 times more than the assets of the National Bank of Greece, which come to $334 million. Greece was the birthplace of the modern games in 1896.
The same report states that, in comparison to the 2008 games in Beijing, “total revenue has increased 38 percent to $5.1 billion. Of that amount, broadcast revenue has boomed by 51 percent to $3.9 billion (compared to just $1.2 million in 1960) with the largest spent by continent in North America ($2.3 billion).” That $2.3 billion was only spent by NBC, owned by GE, and its affiliates to telecast the games on TV and the Internet — live and tape delayed.
The revenue for the 2016 Summer Olympics scheduled for Rio de Janeiro is expected to extend beyond $6 billion. Brazil’s major sport is soccer. The World Soccer Games are the most popular in the world. The Olympics come in second.
Great Britain is expected to net $25 billion from this year’s games.
Profits vs. sports
In the same CNN article, Simon Chadwick, from England’s Coventry University Business School, disputed Brand Finance’s report comparing the Olympics to other corporations because the numbers don’t necessarily include costs that the host nations contribute to the games. He says these costs “can divert resources away from investment in other sporting projects that might normally be pursued.” Additionally, he mentions that a significant part of the brand value of the Olympics comes from only two sources: broadcasting and sponsorship, which is “limited.”
Chadwick states, “The IOC has created value for the brand on the back of unprecedented protection; there can be few corporations across the world that oblige governments to pass legislation aimed at protecting the Games’ interests. As such, the IOC is afforded competitive and commercial benefits that are essentially unique and highly distinctive.”
The article raises that due to this lack of legal restrictions, corporate giants like McDonald’s — with an estimated worth of over $22 billion — have a virtual monopoly on food supply at the Olympics, so they reap huge profits, while encouraging unhealthy eating habits.
Corporations that join The Olympic Partner program are assured hefty profits on their investments in the games. TOP accounts for at least 40 percent of the IOC’s revenues.
The Brand Finance report says: “Procter & Gamble expects to generate an extra $500 million in sales from London 2012, having already generated $100 million from Vancouver [Winter Olympics] 2010. GE, which reportedly paid $200 million for TOP sponsorship rights covering London and Vancouver, already believes it has earned back its investment. GE uses its Olympic links to win big contracts in the host nations, particularly in developing nations such as China (after Beijing 2008) and the upcoming Winter Games in Sochi, Russia, for 2014.”
Chadwick says that the sponsorship or the corporate investments in the games grossly misrepresent the viewership, meaning that “this sense of corporatism is further amplified by the geographic figures, which are heavily skewed towards North America. The implication is that there is little value in the Olympics brand in Africa (which provides just 1 percent of the broadcast revenue).”
The African continent has a much greater population than North America but remains the most underdeveloped continent, with many of the poorest countries, due to the legacy of the slave trade, colonialism and present-day imperialism.
“The domination of broadcasting revenues is an especially worrying point as it implies that the majority of brand value is delivered by media spectacle alone,” asserts Chadwick. “This casts some doubt on the extent to which consumers and fans value the brand, but also implies that the generation of brand value is delivered by broadcasters and sponsors, and not by the IOC or the inherent or intrinsic qualities of the products it delivers.”
Whether Chadwick and others like him agree or disagree with what the Olympics are worth or not, the games are a lucrative source of big profits. Whether the athletes win medals or not, they are all losers because in the eyes of the corporations, they are nothing more than commodities to be bought and sold for the purpose of making profits. This unequal relationship will eventually help to lead to the downfall of a system that is incapable of meeting human needs.
Next: Militarization and the Olympics