Beijing's Olympic bonanza - Emirates24|7

Beijing's Olympic bonanza

(GETTY IMAGES)

From its dangerously empty coffers in the late 1970s to the multi-billion-dollar revenues from the Beijing 2008 Games, the International Olympic Committee (IOC) has managed a remarkable commercial transformation of its prime product, the Olympic Games.

With broadcasting revenues for the period 2005-2008 reaching about $2.5 billion (Dh9.1bn) and a top sponsorship programme adding some $900 million, the IOC's future certainly looks bright – a far cry from the looming financial collapse of three decades ago.

The IOC is now a financially robust organisation, having reinforced its position as a key player in the lucrative world of sport. It is run by professional managers as opposed to the amateurs with a love of sport who were in charge in the past.

Its financial overhaul in the 1980s, credited to then chief Juan Antonio Samaranch, laid the foundations for its current growth that is expected to continue. President Jacques Rogge told his organisation in 2006 that the finances were so healthy the IOC could afford not to stage one edition of the Olympic Games, if forced by some external factor, and still have enough money to organise the Games eight years later.

"The financial prospects are very good," he told a meeting in Seoul. "The financial future of the Olympic movement is secured."

Total Olympic revenues for the last completed four-year period (2001-2004) exceeded $4bn with 53 per cent coming from broadcasters, 34 per cent from sponsors, 11 per cent from ticketing and two per cent from licensing.

Some 92 per cent of that amount was distributed to the IOC partners – National Olympic Committees, international sports federations and Games organising committees – while eight per cent stayed with the IOC for operational and administrative costs.

For the 2005-2008 period the IOC will receive about $2.5bn from broadcasters, $866m from its top sponsors' programme, a worldwide sponsorship programme managed by the IOC, plus money from tickets and licenced programmes. An additional $1.0bn will flow into the coffers of the Chinese organisers from their own local marketing contracts.

The IOC will pay out just more than $1bn for half of the Beijing Games' organisational budget, as it does with every host city.

Income from broadcasting and new media rights for the Vancouver 2010 Winter Games and London 2012 Olympics has already risen nearly 40 per cent from the previous two-Games package of Beijing and Turin, and will be in excess of $3bn.

The IOC estimates this figure to reach about $3.3bn.

It has said some 15 per cent of that will come from new media, including the internet and mobile phones, which has opened up a new field of lucrative financial deals.

Broadcasting was the most important factor in turning the tide for the International Olympics Organisation in the past decades.

Television rights revenues for the 2004 Athens Olympics saw a five-fold increase from the Los Angeles 1984 Games that brought in $287m to the organisation.

Former IOC President Avery Brundage, who ran the organisation from 1952 to 1972, could not have been more wrong when he said the IOC did not need television, coinciding with the first live broadcasts from the 1956 Winter Games.

"We in the IOC have done well without TV for 60 years and will do so certainly for the next 60 years, too," he said.

Compared with the football World Cup, the Olympic Games are bigger in terms of finances. For 2003-2006 Fifa posted revenues of just over $3bn with 92 per cent of revenues being event-related, mainly from the 2006 World Cup in Germany. Net four-year results stood at $774m.

From the 1,000 guineas the BBC had to pay for the 1948 London Games broadcasting rights, to the billions for the Beijing Games, the International Olympics Organisation can deservedly claim to have become the richest sports organisation. (Reuters)
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