we're coming to the end of the Olympic
Games and it's great to see teenagers
like Redman Gerrard and Chloe Kim
winning gold at such a young age but
when it comes to the Olympics if we
forget about the glory of a medal who's
really winning a handful of athletes
make money from sponsorships but mostly
the competitors aren't going to get rich
they're in it for other reasons as for
host nations these are astoundingly
expensive events costing more than many
countries annual GDP so are they really
getting a return on this investment
hosting is expensive every game in the
last 50 years has gone over budget the
2014 Sochi Winter Games went over its
ten billion dollar budget by an
additional forty 1 billion dollars let's
look at a quick breakdown of the profit
and loss for an Olympic Games the main
costs are creating stadiums and other
venues expanding transport
infrastructure and the extra cost of
policing the Nagano Games in Japan in
1998 created a new line for their
Shinkansen bullet train connecting the
Olympic site to Tokyo the London 2012
games extended lines on the tubes to
allow for the Olympic traffic the UK
also needed to pace 355 million dollars
to the private security firm g4s since
their police force would have been
stretched too thin
the total cost can vary from game to
game since it's the infrastructure
that's the big cost Athens needed a new
airport which was a big part of the 15
billion they spent Salt Lake City was
already well equipped to host this kind
of event so they only spent 2 billion
the most expensive was the last Winter
Olympics in Sochi which came to over 50
billion dollars the profit is much
harder to calculate the sponsorship
deals are huge Tokyo 2020 already has 3
billion in sponsorship deals with over
40 local sponsors you can expect that
number to rise even though McDonald's
pulled out of there 41 year partnership
with the Olympics last year then there's
TV revenues this year NBC paid 963
million dollars for the u.s. rights to
the Pyeongchang Olympics and even though
viewer figures are lower than expected
the network's already sold 900
in spots so it looks like they'll at
least break even and pull a profit the
global total for rights is around four
billion and ninety percent of that will
go to South Korea ten percent is kept by
the IOC and ticket sales and
merchandising could bring in another 1
billion the unquantifiable benefit is
tourism sure they'll be a boost while
the crowds are there but does this
convert to anything long-term that's
what really separates the profitable
games from the non profitable Rio de
Janeiro didn't need a bigger public
profile it was world famous already
unlike Pyeongchang or Salt Lake City so
it hasn't gained from a lasting boost
and most of the stadiums already being
left to rot but then on the other side
Barcelona in 1992 put the city on the
map those beaches that were created have
become a big part of their tourist draw
and the renovation along the seafront
has made it into one of the Europe's and
best tourist destinations more recently
the Sochi games might have come at a
huge cost but it certainly improved
tourism to the area that's been
undermined by Russia's international
sanctions but it's not so relevant to
the impact of the game's Sochi is also a
host city for the Soccer World Cup this
year so that cuts the cost of any
investment needed there too at the end
of the day for a host nation it's still
a gamble a lot of countries will be
watching South Korea over the next
couple years as the world wonders is the
Olympics of game worth playing so who
wins the most from the Olympics
surprisingly the answer is the sponsors
is brand competition that's because the
only refreshments you can buy are the
coke brand the only beers Brazil skull
in fact the city of Rio de Janeiro has
turned into one big advertisement the
Olympics gives brands one of the largest
audiences on earth where they can be a
part of events people will remember
forever
sporting excitement and national pride
are powerful things to tag your name on
sir
this year the interesting name is Ali
Baba the Chinese retail giant who have
used this games to launch their first
ever brand campaign see the comments for
a video we did on Jack mozz
Forrest Gump strategy and although the
price tag is high typically a hundred
million dollars
four year cycle as a sponsor they get an
insane level of control over the
promotion of the effect for the period
around the Olympics they get exclusive
use of words and phrases rule 40 in the
Olympic Charter restricts public
references to Olympic competitions
exclusively to sponsors and paid for it
if you think about all the search
traffic's that gives them control over
as well as visibility on all the TV
coverage you see why they're spending
big want to learn more about business
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