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Olympic Games: a billion-dollar business with political connotations | Olympic Games News
5 min read Last updated: June 19, 2024 | 4:56 am IST
The Paris Olympics involve around 10,500 athletes from 200 countries or regions. But the Olympics are more than fun and games.
They are a giant business that generates billions of dollars in revenue for the International Olympic Committee. They are also a proxy for geopolitical influence seen through rankings on medal tables, the presence of world leaders at the opening ceremony, and the serenading of national anthems to gold medal winners.
Here’s a look at how the IOC and the Olympics work.
It’s a business, not a charity
The International Olympic Committee is a non-profit, non-governmental body based in Lausanne, Switzerland. It generates 91% of its revenue from the sale of broadcasting rights (61%) and sponsorships (30%). Revenue from the last four-year cycle of the Winter and Summer Olympic Games, which ended with the 2021 Tokyo Olympics, was US$7.6 billion. The IOC states that it returns 90% of its income to sport, although athletes receive only a small share directly.
There may be a movement afoot to change this. The IOC opened a new headquarters in 2019 at a reported cost of around 190 million Swiss francs, or about $200 million. Host countries foot most of the bills for holding the Olympics. The cost of the Tokyo Games was officially listed at US$13 billion. More than half was covered by Japanese government entities. Olympic costs are difficult to track, but a Japanese government audit suggested that actual costs may have been twice those listed.
Membership and benefits
The IOC is made up of around 100 members. Members select their own colleagues and the most senior is Princess Nora of Liechtenstein. At least half a dozen other royals are members of the IOC. However, most of the power is vested in President Thomas Bach, a German lawyer who is also a member, and its executive board. IOC members are technically volunteers, although all of Bach’s expenses are covered by the IOC. The IOC’s annual report says this amount amounted to $370,000 in 2022. This included annual compensation of 275,000 euros, or about $295,000. His Swiss tax obligations of US$163,000 have also been paid. IOC members receive per diems of between US$450 and US$900 to attend meetings and obtain first-class travel and five-star accommodation.
Unpaid volunteers
Unpaid volunteers help the IOC and local organizers run the Games. They typically receive uniforms, food when they work, and some small transportation costs. Accommodation is rarely included. Paris is looking for 45,000 volunteers. Tokyo initially went after 80,000. Typically, only the rich can volunteer. The 2016 Olympics in Rio de Janeiro struggled to find volunteers because many of the city’s poor couldn’t work for free. Some showed up on the first day, collected their uniforms and did not return. The volunteer system can be seen as economic exploitation. If volunteers were paid a minimum wage of $10 per hour, the extra cost could reach $100 million. Some Paris volunteers threatened not to show up to express their discontent with Olympic spending and French pension reforms.
Mix of sports and politics
The IOC says the Olympics transcend politics. But in reality, they are highly political. It is noteworthy that the IOC has observer status at the United Nations, which indicates its self-perceived role in the world. Political scientist Jules Boykoff notes in his recent book “What the Olympics Are For” that athletes march in the opening ceremony by country. They might well, he notes, march grouped by sport. the popularity of the Games Adolf Hitler used the 1936 Berlin Olympics to promote his agenda. The torch relay has its origins in Berlin.
Bids and are they worth it?
The IOC used to award the Games seven years in advance. In 2015, when it was set to award the 2022 Winter Olympics, the IOC had just two unlikely candidates: Beijing and Almaty, Kazakhstan. The capital of China won in a close vote. Many European countries, including Sweden, Germany and Switzerland, have given up due to high costs. The IOC has since eliminated the old bidding system. There were only two bidders in 2017 for the 2024 Summer Games: Paris and Los Angeles. It awarded Paris those Games and gave Los Angeles 2028. In 2021, it awarded Brisbane, Australia, the 2032 Games 11 years in advance, largely because of influential IOC member John Coates. An Olympic study carried out by Victor Matheson and Robert Baade, two American university professors, concluded that, in most cases, the Olympic Games are a loss-making proposition for the host cities. The study published in the Journal of Economic Perspectives was published in 2016 and IOC officials say recent changes to the bidding system will help. A fundamental argument is that the Olympics are very expensive and can sideline priorities such as schools and hospitals.
Scandals and corruption
The Olympics have often been embroiled in scandals or corruption, perhaps due to the large amount of public money involved and the rushed deadlines. The most recent Tokyo Games involved a bribery scandal in contracts, sponsorships and the bid itself. The 2016 Rio de Janeiro Olympics were cash-strapped when they opened. Then-IOC member Carlos Nuzman, who headed the Games, was arrested on corruption charges shortly after the Olympics ended. The 2014 Winter Games in Sochi, Russia, were marred by a doping scandal and state cover-up. Corruption in the bidding process at the 2002 Salt Lake Winter Games forced some ethics reforms. And it is widely reported that organizers of the 1998 Nagano Winter Olympics in Japan destroyed incriminating financial records that showed they spent millions on lavish entertainment for IOC members.
(Only the title and image of this report may have been reworked by the Business Standard team; the rest of the content is automatically generated from a distributed feed.)
First Published: June 19, 2024 | 4:56 am IST