Commercialization
The IOC originally resisted funding by corporate sponsors. It was not until the retirement of IOC president Avery Brundage, in 1972, that the IOC began to explore the potential of the television medium and the lucrative advertising markets available to them. Under the leadership of Juan Antonio Samaranch the Games began to shift toward international sponsors who sought to link their products to the Olympic brand.
Budget
During the first half of the 20th century the IOC was run on a small budget. As president of the IOC from 1952 to 1972, Avery Brundage rejected all attempts to link the Olympics with commercial interest. Brundage believed the lobby of corporate interests would unduly impact the IOC's decision-making. Brundage's resistance to this revenue stream meant the IOC left organizing committees to negotiate their own sponsorship contracts and use the Olympic symbols. When Brundage retired the IOC had US$2 million in assets; eight years later the IOC coffers had swelled to US$45 million.This was primarily due to a shift in ideology toward expansion of the Games through corporate sponsorship and the sale of television rights.When Juan Antonio Samaranch was elected IOC president in 1980 his desire was to make the IOC financially independent.
The 1984 Summer Olympics became a watershed moment in Olympic history. The Los Angeles-based organizing committee, led by Peter Ueberroth, was able to generate a surplus of US$225 million, which was an unprecedented amount at that time.The organizing committee had been able to create such a surplus in part by selling exclusive sponsorship rights to select companies. The IOC sought to gain control of these sponsorship rights. Samaranch helped to establish The Olympic Program (TOP) in 1985, in order to create an Olympic brand Membership in TOP was, and is, very exclusive and expensive. Fees cost US$50 million for a four year membership. Members of TOP received exclusive global advertising rights for their product category, and use of the Olympic symbol, the interlocking rings, in their publications and advertisements.
Impact of television
The 1936 Summer Olympics in Berlin were the first Games to be broadcast on television, though only to local audiences. The 1956 Winter Olympics were the first internationally televised Olympic Games, and the following Winter Games had their broadcasting rights sold for the first time to specialized television broadcasting networks—CBS paid US$394,000 for the American rights, and the European Broadcasting Union (EBU) allocated US$660,000. In the following decades the Olympics became one of the ideological fronts of the Cold War. Superpowers jockeyed for political supremacy, and the IOC wanted to take advantage of this heightened interest via the broadcast medium.The sale of broadcast rights enabled the IOC to increase the exposure of the Olympic Games, thereby generating more interest, which in turn created more appeal to advertisers who purchased advertising time on television. This cycle allowed the IOC to charge ever-increasing fees for those rights. For example, CBS paid US$375 million for the rights of the 1998 Nagano Games,while NBC spent US$3.5 billion for the broadcast rights of all the Olympic Games from 2000 to 2008
Viewership increased exponentially from the 1960s until the end of the century. Worldwide audience estimates for the 1968 Mexico City Games was 600 million, whereas at the Los Angeles Games of 1984, the audience numbers had increased to 900 million; that number swelled to 3.5 billion by the 1992 Summer Olympics in Barcelona. However, at the 2000 Summer Games in Sydney, NBC drew the lowest ratings for any Summer or Winter Olympics since 1968. This was attributed to two factors: one was the increased competition from cable channels, the second was the internet, which was able to display results and video in real time. Television companies were still relying on tape-delayed content, which was becoming outdated in the information era. A drop in ratings meant that television studios had to give away free advertising time. With such high costs charged to broadcast the Games, the added pressure of the internet, and increased competition from cable, the television lobby demanded concessions from the IOC to boost ratings.The IOC responded by making a number of changes to the Olympic program. At the Summer Games, the gymnastics competition was expanded from seven to nine nights, and a Champions Gala was added to draw greater interest.The IOC also expanded the swimming and diving programs, both popular sports with a broad base of television viewers.Finally, the American television lobby was able to dictate when certain events were held so that they could be broadcast live during prime time in the United States.The result of these efforts was mixed: the ratings for the 2006 Winter Games, held in Europe, were significantly lower than those for the 2002 Games, while there was a sharp increase in viewership for the 2008 Summer Olympics, staged in Beijing.
Controversy
The sale of the Olympic brand has been controversial. The argument is that the Games have become indistinguishable from any other commercialized sporting spectacle. Specific criticism was levelled at the IOC for market saturation during the 1996 Atlanta and 2000 Sydney Games. The cities were awash in corporations and merchants attempting to sell Olympic-related wares. The IOC responded by indicating they would address this to prevent further spectacles of over-marketing at future Games. Another criticism is that the Games are funded by host cities and national governments; the IOC incurs none of this cost, yet controls all the rights and profits from the Olympic symbols. The IOC also takes a percentage of all sponsorship and broadcast income. Host cities continue to compete ardently for the right to host the Games, even though there is no certainty that they will earn back their investments.
