In the 1980s, the International Olympic Committee and its marketing vice president of the time, Dick Pound, changed the way our industry looked at big sponsorships. That happened with the creation of the TOP program for sponsors that provided high-value exclusivity for brands like Visa, McDonald’s and Coca-Cola to reach billions of consumers in hundreds of nations.
In late October, following a round of public interviews, we found ourselves wondering if the IOC had done it again. Had the global team based in Lausanne, Switzerland, come up with a logical (yet revolutionary) idea to use IOC muscle to leverage its global scope? It certainly seemed that way when IOC President Thomas Bach told Universal Sports Network’s viewers the launch of an Olympic television channel (whether by linear TV or Internet) was rapidly moving forward. Bach even went as far as to confirm he expected a free digital Olympic Channel to launch sometime in 2016.
That would seem to be historically bold.
Here’s what we mean. When Bill Rasmussen conceived the idea of a national sports network with ESPN in 1979, most industry experts laughed. Sports on TV could never make enough economic sense to support a 24/7 programming platform. But it did, and ESPN was a relatively quick success.
Not surprisingly, many of the same people who thought such a national sports network was preposterous strongly challenged the 24/7 regional sports network concept. That was until superstations like WGN, YES Network and TBS made it work. Years later, there are RSNs in almost every market in the country with more than 500,000 homes.
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IOC President Thomas Bach has said that a linear Olympic Channel will follow a digital launch.
Photo by: GETTY IMAGES
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Meanwhile, at the national level, ESPN has long since been joined by Fox Sports 1, NBC Sports Network and sport- or league-specific networks such as the NFL Network, NBA TV, Big Ten Network and Golf Channel.
We won’t debate the health of the national and regional sports networks but we think the IOC’s move to create an international sports network with national and regional tentacles is notable. Many readers may suggest ESPN already operates internationally, but we’d argue most ESPN or Rupert Murdoch-owned networks are nationally and/or regionally focused. What makes the IOC’s move interesting is the idea of a singular programming source (based in Madrid) for a worldwide audience.
From both a business and content management perspective, the move is risky. We’re all different, have different cultural interests and speak different tongues. But the IOC’s risk is potentially mitigated since sport is a universal (if not common) language. Given the capacity for viewers to select the audio band they wish to use (i.e., English, French, Spanish, German, Russian, Italian, Chinese, Japanese, Korean, Swahili, etc.), it is not hard imagining most humans will find a language where they can decipher the words and match them up with the video.
In June, the IOC announced the plan to launch its own Olympic television channel as part of Bach’s Agenda 2020 plan. The target date for the new network was April 2016 or just prior to the 2016 Rio de Janeiro Summer Olympic Games. Most assumed the Olympic Channel debut would come in the form of an over-the-top digital package, thus avoiding terrestrial, cable or satellite system operators controlling distribution. By October, however, the IOC was hinting that traditional distribution could happen quickly.
Interestingly, U.S. Olympic Committee Chairman Larry Probst has been leading the Olympic Channel Commission, whose high-profile membership holds responsibility for delivering content on each of the 35 Olympic sports. A recent press released suggested that the IOC’s investment will cover more than $500 million over the first seven years of the network, including the build-out of a digital platform to support the phone and tablet universe.
So here’s today’s pop quiz question: Can an international network work as a stand-alone business today? Or, framed another way, while global viewers may like Olympic-themed content, is the business model sustainable?
“The decision to proceed at this time was taken after consultation with the IOC’s broadcast partners,” Pound said recently. “The broadcasters believe an Olympic channel will assist in maintaining an interest in the Games between broadcasts of the Games themselves.”
There’s nothing wrong with the IOC wanting to goose its ratings during their every-other-year mega-events. For many in our sports universe, if a property is not on TV, it doesn’t exist. That’s not good for the IOC.
But there’s another key reason for the IOC to push forward: keeping the international sport federations of the Olympic world happy.
“IFs hope to gain broader exposure for their own events,” Pound said. “While the current plan is to launch the Olympic Channel prior to the Rio Games, the main objective is ensuring the project is firmly established before it is rolled out.”
Satisfying international federations is one thing. But the IOC also needs to keep the national Olympic committees on board and, de facto, their various national governing bodies. The move to an international channel, if it isn’t dominated by any one country (or continent), will serve valuable vested-interest purposes.
“The Olympic channel will serve the important function of promoting Olympic sport in the periods between Games,” said USOC Chief Executive Officer Scott Blackmun. “It can also be used to help attract a younger audience for Olympic sport programming, which is critically important to the future of the Olympic Movement.”
Last thought: If you felt ESPN was an industry game-changer in 1979, you’ll want to watch how quickly the IOC’s concept catches on with FIFA, UEFA, the NBA or UFC. Sports with true global followings will have no choice but to replicate this international network platform for themselves.
Rick Burton (rhburton@syr.edu) is the David B. Falk Professor of Sport Management at Syracuse University. Norm O’Reilly (oreilly@ohio.edu) is the Richard P. and Joan S. Fox Professor of Business and chair of the Department of Sport Administration at Ohio University. Their newest textbook, “Global Sport Marketing: Sponsorship, Ambush Marketing and the Olympic Games,” was released in August.
