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Volume 22 No. 49

Olympics

Twenty years ago isn’t some arbitrary mark on the calendar when considering the history of the global Olympic industry.

Wedged between two American-hosted Games that imposed major changes on the movement, 1998 was a time of extraordinary urgency for the International Olympic Committee. The year began with the IOC’s first comprehensive self-branding effort, a gigantic leap into modern business tactics for the old-fashioned committee, and ended with the Salt Lake City bidding scandal exploding into view.

 

Many of the Olympics’ biggest storylines of the ensuing two decades, including the broadcast rights mega-deals with NBCUniversal, the tripling of global Olympic revenue, and big governance overhauls at the IOC and the U.S. Olympic Committee, have their start in the rapidly shifting late 1990s landscape.

 

The Atlanta ’96 Olympics are remembered more or less fondly by American fans, but the Europeans at the IOC thought they were a mess. They believed Atlanta ran roughshod over the Olympics’ image, cheapening it with small-time sponsorships and poor execution.

 

Their displeasure, still smoldering by early 1998, put in motion a pattern that’s still going today as the IOC steadily exerted more central control over key aspects of the Olympics, leaving local host cities with less power.

“There was a whole series of issues that led to the IOC coming of age in terms of having the competence and the resources to really start managing the franchise directly, instead of just pointing to the organizing committee and letting them get on with it,” said former IOC marketing director Michael Payne.

 

In the following years, the IOC would create its own permanent host broadcasting service, rather than leaving it as a local organizing committee task. Beginning with the 2000 Sydney Games, the IOC sold broadcasting rights in bundles before the Games were awarded to a given host, cutting the locals out of that process. It also installed new restrictions on how host cities are allowed to use the Olympic rings.

 

By the Rio Games, Olympic global broadcast and sponsorship revenue had reached $5.2 billion.
Photo: Getty Images
By the Rio Games, Olympic global broadcast and sponsorship revenue had reached $5.2 billion.
Photo: Getty Images
By the Rio Games, Olympic global broadcast and sponsorship revenue had reached $5.2 billion.
Photo: Getty Images

The first step down a new marketing path was a comprehensive internal study of the Olympics’ brand. It was long overdue — the IOC had been selling top-dollar global sponsorships for 14 years by then, but they still resisted modern marketing tactics. Many IOC leaders were still coming to grips with the evolution away from amateurism and what that meant.

 

“It took me a year and a half to convince the leadership they were a brand,” said Engine Shop global sports consultant Terrence Burns, a former Delta Air Lines marketer who worked for Atlanta ’96 before working on the IOC brand project.

 

By 1998, Burns estimated, all 200 or so national Olympic committees were at least trying to sell sponsorships, along with local organizers and the global partners. But they had no precise understanding of what the Olympics really offered.

 

Their work gave every marketer in the world the same playbook, informed by research on every continent. They identified four “pillars” that summarized the Olympics’ reputation in the eyes of the world: hope, dreams/inspiration, friendship and fair play, and joy in effort.

 

“It was very functional,” Burns said. “For the first time, I had sponsors, licensees and all the stakeholders singing out of the same page of the hymnal.”

 

In Burns’ opinion, the work ushered in a golden age of Olympic marketing. Creative like McDonald’s making the Olympic rings with burgers no longer would fly; in its place would come Visa’s soaring “Go World” and Procter & Gamble’s touching “Thank You, Mom!” campaigns.

 

1998 was also the last time anyone other than NBC broadcast the Olympics in the U.S. CBS aired the Nagano Games, but in 2000, NBC would begin a run of 10 consecutive Olympics that is still going and won’t end until 2034 at the earliest. Those long-term deals have turned NBC from a contractor into a strategic partner of the movement.

 

“My most important partner was always NBC,” said Michael Lynch, global head of consulting for Nielsen Sports & Entertainment and former head of global sponsorship marketing for Visa. “The USOC doesn’t have any money to market, the IOC doesn’t really have any money to market. The real marketing of the Olympic Games was done by NBC, and obviously the sponsors themselves.”

 

With the long-term deals in place, sponsors can speak frankly with NBC early on in the process about which athletes and sports would likely drive NBC coverage. “Having that really close-knit relationship with them, and understanding what sports were a priority for them leading into the upcoming Games, was always something really important,” Lynch said.

 

The professionalized approach to marketing and the Olympics’ ability to take part in the rapid growth in broadcast rights fees has paid off. In the 20 years between the Atlanta and Rio Games, Olympic global broadcast and sponsorship revenue grew from $1.5 billion to $5.2 billion, a largesse that filters down to every Olympic sports body around the globe.

 

In the last two decades, the U.S. Olympic movement has changed dramatically, too. The USOC overhauled its governance in 2003, replacing its unwieldy, volunteer-driven board with a corporate-style board with elite professionals, far more of them independent of the movement.

 

Internal turmoil plagued the organization through much of the 2000s, with short-tenured CEOs, public disagreements with the board and two embarrassing failures to win another Summer Olympics. Those problems began to turn around in 2010 under Chairman Larry Probst and CEO Scott Blackmun, who kept a core executive team together for eight years before Blackmun resigned because of health issues and the Larry Nassar sexual assault and abuse scandal in February.

 

The U.S. eventually secured the Los Angeles 2028 Olympics, a win enabled by Blackmun and Probst’s 2012 decision to accept a less-generous revenue-sharing agreement after 2020. The deal repaired the U.S.-IOC relations after years of tension.

 

The detente aligned the IOC and the U.S. for the first time in years, a crucial development, said Canadian IOC member Dick Pound.

 

“It was a huge issue for the IOC and the Olympic movement, because love ’em or hate ’em, you’ve got to have America on [your] side,” Pound said.