As the 23rd Winter Olympics get underway in PyeongChang, South Korea, let’s take a look at what the Romans (big fans of the ancient Olympics themselves) addressed as “Cui bono?” or “who stands to benefit?”
To make it more specific – whose money makes the Olympics roll?
There’s arguably no sleeker money-making machine in the world than the IOC currently is – selling its name & symbols for a major buck. But let’s address common misconceptions first.
The IOC is somewhat similar to the UN – it exists on fees paid by respective country members or, more specifically, National Olympic Committees.
The IOC is, essentially, a private organization incorporated in Switzerland as a non-profit.
It proudly says about itself
…As an entirely privately funded organisation, the IOC’s commercial partnerships continue to prove invaluable to the staging of the Olympic Games and the operations of every organisation within the Olympic Movement.
The IOC and the Olympics organizers share costs of preparing and staging the Olympics.
The Olympic Games are the world biggest franchise – an applicant-city has to convince the IOC that is has already prepared, or will prepare in time, what is necessary for the Games. Bearing all associated costs. ‘What’s necessary’ is at the sole discretion of the IOC. In exchange the successful bidder gets the right to call its competition ‘the Olympic Games’.
The lion’s share of expenses is always borne by the organizers. Including, but not limited to, building sport facilities, organizing lodgings and transportation for athletes and officials, feeding them during the Games etc., etc.
The only large expense borne by the IOC is the organization of television broadcasting of the events.
Surely, the profits are shared between the Olympics organizers and the IOC?
Barely. The IOC retains and controls almost all the marketing rights associated with the Games. Profits from on-site Olympic paraphernalia and venue tickets sales are shared – but those are minor compared to the main sources of income. The main profits from those marketing rights always go straight to the IOC.
Speaking of main sources of income: the Games are largely underwritten by all those transnational corporations whose ads you get to see all the time, both as posters on the Olympic arenas and on your TV, right?
Yes and no. In order to be associated with the IOC and have the right to display patented Olympic Rings on your wares, one has to buy into the Olympic Partner (TOP) Programme. Currently there are 13 large corporations, mostly US-headquartered that “pay the IOC for the rings.” They pay hundreds of millions of dollars per year for the privilege.