Stephen Greyser, a professor of Business Administration and teacher of a course of the business of sports, explains that the business of the Olympics revolves around its brand. The value of that brand is focused on the five rings. The brand derives its value from the competition: it's range, its integrity, and its intensity. The brand also derives value from the national pride that the Olympics symbolizes. The games offer a world stage for each country to compete on, especially for countries where the Olympic program is government sponsored, since it then represents the country as a whole.
The first business aspect of the games is sponsorships. To be an official sponsor of the Olympics costs around $50 million for a four year period and this doesn't include the cost of the advertising needed to make use of the sponsorship. The point of sponsorship is co-branding, building a dual equity between the sponsor and the games. This explains the seriousness of anything that harms the equity of the Olympics, for example the Salt Lake City bribery scandal, since it also reflects on the sponsors. Sponsors of the game also have to watch out for ambush marketing, where a company that isn't an official sponsor tries to advertise itself in such a way that it derives the same benefits as if it were legitimate.
The second business aspect of the games is broadcasting. For the last Olympic games, NBC bought the broadcast rights for $613 million. The value of the broadcast revolves around its viewership. The Olympics includes over 400 hours of events that offer both stories of personal struggle as well as intense competition. This makes the Olympics the only sporting event that draws both male and female viewers, which help explain its value. The final aspect of the business of the Olympics is licensing, which includes everything from pins to clothing and other memorabilia.
|
|