United States calls the shots in money game

All the swimming finals at the Rio Olympics will not start before 10pm local time to help TV audience in the USA to catch the action in prime time. It was for the same reason Chinese fans had to watch swimmer Michael Phelps win eight gold medals in the morning at the 2008 Games.

No host city can afford to go against the wishes of NBC because the American TV channel pays almost half of the total global broadcasting rights fee to the International Olympic Committee. The TV money is the fuel that keeps the Olympic engine revving as it makes up 75% of IOC’s total revenue, which is expected to be around Rs 37,000 crore for the 2013-16 cycle.

With nearly 90% of TV broadcast rights fee coming from Europe and the USA, the IOC has no choice other than to obey the diktats of the two regions. There isn’t much to complain about because he who pays the piper always calls the tune and it’s the way the world is run in every sphere today.

When Pierre de Coubertin founded the modern Olympics in 1896 he wouldn’t have envisaged that the Games would grow into such a commercial behemoth. American Avery Brundage, IOC president from 1952 to 1972, was of the opinion that the Olympic body should have nothing to do with money. The IOC says 90% of its humungous earnings is ploughed back into sports through grants to National Olympic Committees, international federations and the Olympic Games. In other words, the IOC earns to spend.

Even the decision of the IOC to conduct the Winter Olympics two years after the Summer Games from 1992 owes its genesis to America’s influence. Until 1988, the Summer and Winter Olympics were conducted in the same year.

The IOC decided to separate the two events to reduce the financial burden on the official US Olympic broadcaster in the same year. NBC is planning to offer nearly 6,750 hours of Rio Olympics coverage on TV and digital platforms.

The role of America in keeping the Olympic movement alive can’t be stressed enough after Montreal’s misadventure in 1976. The Los Angeles Games in 1984, the first one to be organised without state support, returned a profit of more than $200 million. The Montreal organisers, on the other hand, had overshot the budget so recklessly that the Canadian city took another 30 years to pay off its debts.

Los Angeles proved that the Olympics were sustainable and it was a timely boost the IOC needed after two editions marred by mass boycotts.

Another important source of revenue for IOC is The Olympic Partnership (TOP), which came into force in 1985. A few MNCs pooled in around $100 million as part of the initial cycle of the TOP, which was the brainchild of then IOC president Juan Antonio Samaranch and Adidas boss Horst Dassler.

Eleven companies, six of them American, contribute more than $1 billion to the IOC kitty in the current four-year term. TOP’s revenue contribution is expected to be 18% for 2013-16. Coca-Cola, a key TOP member, has been involved with the Olympic movement since the 1928 Amsterdam Games. As on-field advertisements are banned at the Olympics, money from local sponsorship in the host country, ticketing and merchandising is also important to fill the coffers of the IOC.