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Money, Money, Money – and the IOC

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Yuna Kim, former South Korean figure skater lights the Olympic cauldron during the opening ceremony of the 2018 Winter Olympics in Pyeongchang, South Korea, Friday, Feb. 9, 2018. Photo: AP Photo/Julie Jacobson

By David Owen |

International Olympic Committee (IOC) Media provoked a minor Twitter storm last week. It took to the social media platform to assert that the (IOC) and the Olympic Games “are not there for making money.”

They went on to elaborate that “money is not an end in itself, it is just a means to accomplish our values-based mission.”

The Tweet pictured IOC President Thomas Bach at a European Olympic Committees podium.

But the message echoed a rather interesting speech the German delivered recently at the Association of National Olympic Committees (ANOC) General Assembly in Doha.

There, he lamented how “some people…want to explain to us that the Olympic Games have to be considered as a business model.”

“It must be about how can we maximize profit and how can we then distribute these profits according to the economic contribution of the different stakeholders to this Olympic Games and to the economic success of this Olympic Games?

“And there to be extremely clear,” Bach went on, “the Olympic Games are not about making money.

“The Olympic Games are not about maximising revenues.”

I shall refrain from quoting the stream of, er, sceptical responses that the IOC tweet engendered – except for one.

This came from the father of sports marketing, Patrick Nally, a man who was busy building this new branch of business while Bach was still wielding a foil.

“Our first commercial approach was in 1972 Munich for British, Australian and other NOCs,” Nally wrote.

“1976 Montreal saw the start of the commercial approach; the global package was created by 1980, followed by getting global control of the rings.

“Since then it has always been about the money.”

My view? When an organisation generates something like $5.7 billion (£4.4 billion/€5.1 billion) over four years, as the IOC did between 2013 and 2016, the last completed quadrennium, it is tough to argue that making money is not fairly high up the said organisation’s list of priorities.

But do I have a problem with that? Not in and of itself, no.

And I agree the Games are not about maximising revenues: if they were, all the most compelling bits just about wherever you happen to be in the world would not have been available in recent years on free-to-air television.

As for the other main revenue stream, sponsorship – yes, it has downsides: multinational companies want something in return for their millions; but when developing its TOP worldwide sponsorship programme, the IOC had no way of knowing just how big and long-lasting a source of revenue the broadcasting rights market would prove to be.

In those circumstances, it was prudent and wise to develop a second string to the IOC commercial bow.

My beef is rather about distribution and what I view as the less-than-crystalline transparency of the IOC in this regard.

You don’t have to be covering the Olympic Movement for long these days before you have it drummed into your head that the IOC redistributes 90 per cent of what it earns.

But if you want to know, dollar by dollar, where it is redistributed to, that requires a lot more digging.

There is a summary on the olympic.org website that is probably adequate for the needs of most general readers.

But a clear, dollar-by-dollar audited breakdown it is not.

When I sat down a couple of years ago to try to work out where the money went, with the aid of each separate set of accounts from that 2013-16 quadrennium, it took me hours and hours of number-crunching to arrive at what I felt was a reasonably comprehensive summation.

To be fair, at least the numbers were out there – which would not have been the case with some of the more backward International Federations (IFs) who seemingly still think it acceptable in 2019 not to publish their annual audited accounts.

Nonetheless, I do not think it is asking too much for the IOC, just once every four years, to provide a clear and complete breakdown of what its money is spent on, including the funds it keeps for itself – and to judge by the interest shown in my 2017 calculations, there are plenty who agree with me.

Since the figures remain current until all details relating to the present quadrennium enter the public domain, they bear reprinting.

So: this is how I think that 2013-2016 revenue was used, in percentage terms, and in descending order:

  • 30.7 per cent – Olympic and Youth Olympic Games Organising Committees, so mainly to Russia and Brazil.
  • 13.8 per cent – IFs.
  • 11.1 per cent – IOC central/operating costs (including culture and heritage in 2013).
  • 10.9 per cent – National Olympic Committees (NOCs), including via Olympic Solidarity.
  • 10.6 per cent – broadcasting costs.
  • 7.2 per cent – the United States Olympic Committee, so a fair chunk of the funds redistributed – more than $400 million (£311 million/€360 million) – appears to have gone to the NOC of the world’s only superpower.
  • 4 per cent – net cash in 2016.
  • 11.7 per cent – everything else, including 2.3 per cent culture and heritage in 2014-2016, 1.3 per cent Olympic Channel, 0.4 per cent cancellation insurance and 2.5 per cent earmarked funds, which support the World Anti-Doping Agency, the International Council of Arbitration of Sports and other bodies.

The full article may be found here. 

Republished with permission from insidethegames.biz.

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