THE ECONOMICS OF THE OLYMPICS

NEW DELHI: The Olympics is not just a sporting spectacle. There is massive money riding on it as well. It impacts numerous aspects of the host city’s economy and the performance of shining stars at the games.

It is an essential part of an elite athletic competition. But beyond sports lies a network of huge investment, money by tactful management, leadership, honesty and trust, to identify resources and eventually the source of revenues of the host city.

Before 1988, almost 80 per cent of funding came from US broadcast rights fees. The Los Angeles Olympic Organizing Committee (LAOOC), 1984, derived revenue from four major sources: Tickets, sales, television broadcast rights, and other sales of Olympic commemorative coins. LAOOC offered three levels of corporate participation—official sponsor, the official supplier and official licensee. A total of 164 companies joined the sports programme and contributed around $12.7 million in cash, services and products. The organising committee earned more than $76.3. The Los Angeles Games’ financial success also contributed to the awareness that the Olympics could create financial benefits for the hosting city, corporate sponsors and broadcasters.

Sponsor support is essential for the staging of the Games; commercial partners also provide vital technical services and product support to International Olympic Committee (IOC), Organising Committee of Olympic Games (OCOG) and the international federations (IFs), and National Olympic Committee (NOC). The IOC retains less than 7 per cent of the revenue of the collection, the balance, over 93 per cent, is distributed among NOC, OCOG and IFs.

The Olympics attracts fans from all over the world, with a diverse range of interest, from a passion for sports to fervent nationalism.

The most notable impact of the Olympics can be seen in the field of real estate. Atlanta and Los Angeles can be the perfect examples. The decision to select a host city gets an immediate positive response from the local stock market. The prospect of a higher worldwide profile gets market approval. The Beijing and London Games, however, bucked this trend.

The writer is a former Associate Professor, Delhi University & consultant, Limca Book of Records.