IOC continues heavy reliance on broadcasting for majority of revenues
By Callum Murray
Almost three-quarters (73 per cent) of the International Olympic Committee’s revenues came from its broadcasting rights deals, with less than a quarter (18 per cent) deriving from its top-tier ‘TOP’ sponsorship deals, out of total revenues of $5.7 billion over the period 2013-16, according to the IOC’s newly-published annual report.
The IOC Annual Report 2018: Credibility, Sustainability and Youth lays bare the IOC’s continuing reliance on broadcasting rights revenues for its much-trumpeted financial stability, at a time of major disruption in the media landscape.
For the year 2018, during which the PyeongChang 2018 games were staged, TV broadcasting rights revenues totalled $1.43 billion, compared with revenues of $550 million from the TOP sponsorship programme.
However, the primacy of TV rights revenues versus sponsorship rights was reversed in 2017, a non-Olympic year, when TV rights revenues totalled just $13.7 million, compared with TOP revenues which were broadly constant at $551 million, being payable across the four-year Olympic cycle.
Other sources of IOC revenues include ‘other rights’ (including revenue from the commercial exploitation of the Olympic symbol and Olympic emblems), which contributed 4 per cent of IOC revenues between 2013 and 2016 and ‘other revenue’ (including ‘unilateral and Paralympic broadcast revenue as well as other IOC entities’ revenue’), which contributed 5 per cent.
The IOC’s Olympic Games-related expenditure in 2018 totalled $364 million, while expenditure on the third edition of the Youth Olympic Games, staged in Buenos Aires, which brings in virtually no separate revenues, totalled $60 million.
The IOC’s contribution to the costs of the PyeongChang 2018 winter Olympics totalled $215 million, while it paid out $540 million to support the Rio 2016 games.
Under the heading, ‘Strong financial position’, the report says: “The IOC shows a healthy and strong financial position at 31 December 2018. Total assets stand at $4.1 billion: current assets stand at $2.3 billion, while non-current assets stand at $1.9 billion. Cash and other financial assets, totalling $3.7 billion, represent 89 per cent of the IOC’s total financial position.”
Revenues worth approximately $5 billion (or 90 per cent of the total) were distributed by the IOC during the 2013-16 cycle, according to the report, with 50 per cent ($2.5 billion) being spent directly on staging Olympic Games, 38 per cent ($1.9 billion) on helping to fund international federations, national Olympic committees and ‘solidarity’ projects and 12 per cent ($600 million) on the Youth Olympic Games, additional athlete programmes, protecting clean athletes (mainly anti-doping activities) and promoting Olympism in society.
The report claims 2018 as “a landmark year for Olympic broadcasting,” adding: “The last 12 months have shown how the IOC will connect future generations of fans to the Olympic Games, raise the profile of the world’s best athletes – and help to build a better and more connected world through sport.”
More than a quarter of the world’s population received coverage of the PyeongChang 2018 games on television, radio and digital media, according to the report, with OBS, the IOC’s host broadcast operation, delivering “more content in more formats through more channels than at any previous games: 5,600 hours of coverage, including 867 hours of live sport.”
This included the use of high-definition virtual reality (VR) for the first time at any winter Olympic Games, ultra high definition (4K UHD) and new High Speed Slow Motion (HSSM) and Super Slow Motion (SSM) cameras. PyeongChang 2018 also became the first-ever global event to use 5G, which, the report claims, “will revolutionise Olympic broadcasting.”
Meanwhile, the Buenos Aires 2018 Youth Olympics, described in the report as “a digital games” offered 7,000 hours of digital coverage to 6 million unique users on owned digital platforms, while the estimated global TV audience reach was 187 million.
The report offers no breakdown of the financial contribution of the IOC’s broadcast partners, despite their total exceeding that of the TOP partners by a factor of about 3:1. However, those broadcast contributions continue to be led by that of NBC, the Comcast-owned television network, which is approaching a new deal which kicks in from 2022 and is worth $7.65 billion over six editions of the games (compared to $4.38 billion from 2014 to 2020).
Meanwhile, Discovery Communications, the USA-based media group, is paying €1.3 billion ($1.37 billion) for rights across Europe (excluding Russia) from 2018 to 2024, while the Japan Consortium, a group of Japanese broadcasters, is shelling out Y110 billion ($961 million) over the same period.
In 2017, the IOC revealed 7.1-per-cent growth in media rights revenues during the four-year cycle that culminated with the 2016 Olympics in Rio de Janeiro, with the total coming to $4.1 billion.
The figure, which includes the sale of broadcast rights to the 2014 winter Olympics in Sochi, compared to the total of $3.85 billion raised from the same source for the 2010 and 2012 games in Vancouver and London, respectively.
The costs of operating the IOC’s Olympic Channel rose to $85.6 million in 2018, compared with $73.1 million the previous year, representing the majority of the IOC’s costs for ‘Total promotion of the Olympic Movement’ which totalled $132.7 million in 2018.Sponsorship
In 2018, the IOC welcomed a new TOP partner, Allianz, the German insurance giant, which will join the programme in 2021, with Korean electronics firm Samsung extending its global partnership until 2028 as the TOP partner in the wireless communications and computing equipment category, including the ability to promote artificial intelligence, virtual reality, augmented reality and 5G features, and Visa, one of the founding members of the TOP programme, extending its global partnership to 2032.
Revenues from the TOP sponsorship programme increased by 7.6 per cent to $1.02 billion for the 2013-2016 period.
The effects of the IOC’s surprise announcement yesterday of the merger of two sponsorship categories, non-alcoholic beverages and dairy, must wait to be felt.
The merger means that Coca-Cola, by far the IOC’s longest-serving partner, will now share the new category with Mengniu, the Chinese dairy company, which enters the IOC’s top-tier ‘TOP’ sponsorship programme for the first time.
The new 12-year deal, beginning in 2021 and running through to the 2032 Olympic Games, is reported to be worth more than $3 billion.
The IOC concluded: “As it celebrates its 125th anniversary, the IOC continues to be in a position of strength and stability, which is also reflected in the continued confidence of our partners and stakeholders.
“Writing in the report, IOC President Thomas Bach said, ‘In this Olympic spirit, and building on the momentum from this past year, we can look ahead to the future with confidence and optimism’.”