The global Olympic movement’s previously rapid revenue growth has slowed to a trickle this decade, and the effects have filtered down to the U.S. Olympic Committee.
The International Olympic Committee’s top-line revenue grew by 7.6 percent to $5.66 billion during the four years ending with the 2016 Rio Games, according to financial reports released earlier this month. That follows growth spurts of more than 30 percent in each of the prior two Olympic cycles ending with Beijing 2008 and London 2012.
Distributions to the USOC also slowed, increasing by 6.3 percent to $404.4 million after growing by 18 percent in the 2008 quadrennial and 28 percent in the 2012 quad. The IOC sums account for about 44 percent of Team USA’s total independently reported revenue for the last four years.
To be sure, the Olympics industry remains financially sound — the IOC booked a $712 million surplus for the quad and has more than $2 billion in total assets — but the results highlight the growing challenges facing sports businesses in a changing media landscape.
The primary reason for the slower growth is a leveling off in broadcast rights inflation. For the rights package that included the 2010 Vancouver and 2012 London Games, broadcasters globally paid $3.85 billion — up 73 percent from the fees paid just eight years earlier for the Salt Lake City 2002-Athens 2004 package.
But during the 2014-16 cycle, global broadcast revenue climbed just 8 percent to $4.16 billion. Nearly half that sum comes from a single source, NBCUniversal, which agreed in 2011 to pay slightly more than $2 billion for the cycle.
USOC Chief Marketing Officer Lisa Baird said she’s not concerned about the slowdown. She said the Olympics has chosen long-term stability over short-term revenue growth by locking in long-term contracts with NBC, first in the 2011 deal covering Games through 2020, and then additionally with the 2014 extension worth $7.75 billion covering Olympics through 2032.
“I think we’re looking pretty smart right now in partnering with the IOC on a deal through 2032, because that’s inherently one of the best things you can do to ensure stability in this marketplace,” Baird said.
The IOC has still managed to find “incremental growth” through new sponsorship deals, Baird said. Distributions to the USOC coming specifically from the global sponsorship program grew by 15.6 percent to $144 million since 2012.
The USOC fared better than other swaths of the Olympic movement in the recently completed quadrennial.
According to the IOC financial statement, the world’s international sports federations received $739 million — up just 1.4 percent from 2012 — and the other 205 national Olympic committees together received $739 million — up just 0.5 percent.
However, the blanket USOC distribution figures do not include $15 million given back to the IOC from the USOC to help run the Sochi and Rio Olympics, part of the bodies’ unique revenue-sharing agreement. In 2012, the IOC and USOC agreed to a new deal that will cut the USOC’s share of incremental revenue growth beginning in 2020. But the newly released financials still reflect the old rules.
Other items of note in the IOC financial report: It spent $63 million in 2016 to launch the fledgling Olympic Channel, up from $11 million on the channel during the pre-launch year of 2015. Also, total IOC salary and benefit costs grew year-over-year by 13.2 percent to $76.4 million.
Total assets for the IOC stand at $2.07 billion, up from $2 billion after London 2012.
