Following a series of meetings this week hosted by the IOC co-ordination commission, its chairman, Denis Oswald, will on Friday hold a press conference at which he is widely expected to heap praise on London’s preparations for this summer’s Olympics.
The commission has examined every aspect of Olympic operations, paying particular attention to arrangements for what, in a fine example of corporate-speak, it calls its “client groups”.
These include athletes, spectators, visiting dignitaries and media, but the most important group, other than British taxpayers picking up the tab for the three-week athletics-fest, are the IOC’s deep-pocketed sponsors who pay to keep the show on the road.
It’s precisely 100 years since ten companies approached the IOC prior to the 1912 Games in Stockholm and bought the rights to take official photographs and sell Olympic memorabilia.
The remarkable extent to which marketing and sponsorship revenue has grown in the intervening century is attributable to the IOC’s stated desire not to over-commercialise the Games and to limit sponsorship participation while successfully managing a series of licensing, supplier and broadcast partnerships.
Broadcasters are responsible for contributing most of the IOC’s revenue. Between 1993-2012, for example, the total rights fees paid by broadcasters rose from $1.25 billion to $3.91 billion.
These sums are light years away from the situation prevailing when the Games were last hosted in London.
In 1948, the first Olympic Games to establish the principle of a broadcast rights fee, the BBC agreed to pay the IOC 1,000 guineas for the right to screen the Olympics.
However, the Games’ organising committee, concerned that such payment might cause the Corporation unnecessary financial hardship, waived the payment.
It wasn’t until four years later, in Helsinki, that formal broadcast rights negotiations were undertaken for the first time.
But if the growth in broadcast revenue has been spectacular, the expansion of The Olympic Partners (TOP) programme since it was introduced in 1985 has been even more impressive.
It is this particular ‘client group’ which the co-ordination commission is so keen to impress.
Created by the IOC to “develop a diversified revenue base... and establish long-term corporate partnerships that would benefit the Olympic movement”, the TOP programme operates on a four-year term known as the Olympic quadrennium covering winter and summer Games.
Initially attracting nine worldwide partners, who paid $96 million between them for exclusive global marketing rights for the 1985-88 period encompassing the Calgary and Seoul Games, the current TOP programme, covering 2009-12, has generated a staggering $957 million from just 11 sponsors.
“That represents an average increase of more than 20 per cent per sponsor over four years,” calculates Jim Hardie, of Apex Sports Management, a company specialising in sports sponsorship.
“If the IOC were disappointed at not having a full complement of 12 TOP sponsors, as they did during their previous quadrennial (2005-08), their disappointment has been tempered because they’ve managed to raise almost $100 million more in sponsorship revenues in the teeth of a global recession.”
During the last quadrennial, sponsors paid an average of $72 million apiece; payments currently average $87 million per corporate sponsor.
Aside from how to keep sponsors happy, however, two of the most pressing topics under review over the past three days have been security and ticketing.
