On Who’s Making Gold From The Olympics

When it comes to real Olympic gold, it's hard to go past the $1.25 billion in advertising revenues that’s been sold off the back of the sporting events in Paris, an all time Olympic record. The advertising sales at Paris have been boosted by the favourable US time zones relative to Paris, and by Coca Cola’s big Olympic advertising comeback after it chose to skip Tokyo.

Also, there has been a very large field of new marketers willing to sell their all. New advertisers have accounted for $500 million of the overall total, to the point where according to Variety magazine, the Paris Games have captured more advertisers than Rio and Tokyo combined. That’s been money well spent, given that NBC viewership figures on the first four days of the Paris Games were up 77% on the Tokyo audience numbers.

Happy days for ad sales revenue. Yet the big revenue deal (for broadcasting rights) was concluded 10 years ago in a deal between the IOC and the US network NBC:

In a deal stuck in 2014, [NBC] paid an eye-watering $US 7.65 billion for exclusive U.S. media rights for the games from 2021 to 2032, against $US 4.4billion for the previous period running from 2015 to 2020.

Sky’s access deal with the IOC was also negotiated at that same time 10 years ago, but the terms don’t seem to have taken account of the subsequent rise in the costs of content delivery. A week ago, Sky CEO Sophie Maloney offered this interesting reply when the NZ Herald asked her if Sky would be making money out of the Olympics:

“As it stands, I don’t think we will,” she says… “Suffice to say this event can be pretty challenging to make money from because you pay a lot for two and a half weeks of content.”

No-one seems to make much money out of doing business with the IOC. France will have spent $8.2 billion (in headline costs alone) to stage the Olympics. That will make Paris the sixth costliest Games of all time behind the all-time champion, the 2014 winter games in Sochi, Russia. This academic study from Oxford University makes sobering reading:

The Olympic Games are the largest, highest-profile, and most expensive megaevent hosted by cities and nations. Average sports-related costs of hosting are $12.0 billion. Non-sports-related costs are typically several times that. Every Olympics since 1960 has run over budget, at an average of 172 percent in real terms, the highest overrun on record for any type of megaproject...[due to] six causal drivers: irreversibility, fixed deadlines, the Blank Cheque Syndrome, tight coupling, long planning horizons, and an Eternal Beginner Syndrome.

Allez les Blank Cheques!

Obviously, staging the Olympics offers a gigantic opportunity for the hosts to showcase their country to a global audience, and this also ensures that national pride feeds into the Blank Cheque Syndrome mentioned above. Ironically, none of the heady promises of a Games-driven bonanza for local businesses in Paris have materialised. Big spending foreigners keen to experience Paris have deferred their visit, and sensibly avoided the disruptions and the swarming hordes of sports fans.

Many of those sports fans have had precious little disposable income left over to spend at Paris bistros after they’ve shelled out for the exorbitantly priced tickets to the Games venues. Parisians who normally flee the city during August for the mandatory French summer vacation seem to have left even earlier this year, to avoid the Games tourism plague. To top things off, the security precautions have significantly impeded access to the city’s attractions.

So… as Le Monde has reported sympathetically here, and also here, many of the city’s restaurants and cafes have been doing such terrible business during the Games that some have simply shut up shop for the duration. For all the outpouring of national pride at the exploits of French athletes, the Olympics seem to have given the general public yet another set of reasons to hate Emmanuel Macron.

Footnote One: The cruelty to horses central to the training for equestrian events (eg Dressage) is discussed here.

Footnote Two: The case of the trans “scandal”about the alleged unfair advantage enjoyed by Algerian boxer Imane Khelif (actually she has always been a cisgender woman, and was raised as female) is discussed here. Among other things, the transphobic hysteria has also been racist. As Vox News has noted in its account of this sorry affair :

The inaccurate assumptions about Khelif’s identity were boosted by prominent anti-trans activists like Harry Potter author J.K. Rowling as well as by politicians like US Republican vice-presidential candidate J. D. Vance and conservative Italian Prime Minister Giorgia Meloni. Their statements stirred up a storm of anger on the right despite the fact that Khelif is a cisgender woman.

As Vox’s Alex Abad-Santos has explained, there aren’t any transgender athletes at the Olympics this year who are competing outside the sex they were assigned at birth...”There has been some confusion that somehow it’s a man fighting a woman,” IOC spokesperson Mark Adams told reporters. “The question you have to ask yourself is, are these athletes women? The answer is yes.”

Footnote Three: For the first time, track and field gold medal winners will receive $50,000 in prize money from the governing body of international athletics, a payment that World Athletics president Sebastian Coe has explained as being in recognition of the large amounts of revenue that are being generated by the efforts of Olympic athletes:

While it is impossible to put a marketable value on winning an Olympic medal, or on the commitment and focus it takes to even represent your country at an Olympic Games, I think it is important we start somewhere and make sure some of the revenues generated by our athletes at the Olympic Games are directly returned to those who make the Games the global spectacle that it is."

Footnote Four: At the Paris Games, Nike has been urging its stable of star athletes (e.g. Lebron James, Kylian Mbappe, Serena Williams) to actively endorse its products. In a newsletter sent to the “Nike Family” co-founder Phil Knight urged all concerned to “reignite the passion, desire and the will to win. We need you. The world needs you.”

Apparently, the world needs the Swoosh because “Winning is getting a losing reputation these days. It's time to change that.”

Weirdly…although Nike is reportedly spending $1 billion on “consumer-facing activities” in 2024, it will be 2025 before the company can manage to get most of its new product lines available, to cash in. Losers.

Kamala Harris picks a running mate

In Pennsylvania tomorrow (US time) Kamala Harris will choose her vice-presidential nominee. The venue makes it likely that popular Pennsylvania governor Josh Shapiro will be her pick. This will be the first substantive decision that Harris has made as a presidential candidate and -if it is Shapiro - it will also be a divisive decision within the Democratic Party.

That’s because of Shapiro’s very strong pro-Israel views, and his harsh criticism of Gaza student protesters as being “pro Hamas. ” Shapiro also criticised a state university chancellor for being reluctant to treat any accusation that Israel is committing genocide in Gaza as being a violation of university policy.

The usual commentary is that picking Shapiro makes political sense because Pennsylvania is a key swing state yada yada...but as this fascinating article shows, there is actually very little evidence to support the assumption that choosing a running mate from a swing state will deliver a home state advantage and/or increase support for the presidential ticket overall. That’s partly because it is impossible to separate all the variables in play. It is also impossible to do the inter-dimensional travel to test what would have happened if someone else had been chosen.

More to the point, choosing someone from a key swing state as a V-P running mate has been a surprisingly rare event in post-war American politics. More on this issue later this week, once Harris has gone public with her choice.

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