Victors and spoils: The Olympic games are big business. Who wins, and who loses?
IN ANCIENT GREECE it was impossible to stitch a sponsor’s logo to an Olympic athlete’s singlet or shorts, because the competitors were all naked. In today’s London it is still impossible. Though clothing is now allowed at the Olympics—indeed it is compulsory—so is a veneer of amateurism. No advertisements are allowed in the stadium; no logos may be emblazoned on the athletes’ kit (except at the Paralympics: see article).
Behind the veneer, commercial interests are vying furiously for gold. The sums involved make Russian weightlifters look insubstantial. The British government’s budget for the games has risen to £9.3 billion ($14.5 billion) from an initial estimate of £2.4 billion. The International Olympic Committee (IOC) has raised $4.87 billion in broadcast fees and sponsorship for the four-year cycle that includes the London summer games as well as the Vancouver winter Olympics of 2010. The London Organising Committee of the Olympic and Paralympic Games (LOCOG), which is actually in charge of staging the games, has raised another £700m in sponsorship; it is raking in pots more by selling tickets and licensing souvenirs.
Eleven global sponsors (known as top Olympic partners, or TOPs) pay fat sums to the IOC for the right to use the Olympic brand. Only one TOP sponsor is allowed in each commercial category: Coca-Cola for soft drinks, Panasonic for televisions and so on. This business model dates back to the 1980s. Before then, the Olympics were a commercial mess, with lots of sponsors paying small sums to borrow the Olympic brand in a few cherry-picked markets. Now, the IOC sells much bigger contracts to fewer sponsors. Top-tier deals are long-term (at least eight years) and global. The size of each deal is secret, but the total for all 11 for 2009-12 is $957m.
Sponsors can pay in cash, in kind, or both. For example, Atos, a French consultancy, is a top-tier sponsor. It also manages the information technology for the games. In its command room overlooking London’s Docklands, 450 technicians and support staff hunch over screens. Among other things Atos handles the accreditation system for all 250,000 athletes, trainers and hangers-on. This means creating a big database for personal information for people from all parts of the world. It has to hook up with the British immigration authorities, so everyone who needs a visa gets one. And it has to be secure: visiting prime ministers don’t want their private data published on WikiLeaks.