Monday, December 8, 2008

How Does Business Effect the Olympic Bidding Process

We've been following the Olympics pretty closely on Sloopin and as a result we bring you this recent article in Sports Business Journal.

It talks about the US broadcasting rights for the 2014 and 2016 Olympics. This is a side story to the bidding process, but nonetheless important since ESPN, NBC, FOX, etc. most likely will pony up billions of dollars to broadcast the games.

Since the US rights are the most lucrative to the Olympics (as compared to Asia, Europe, etc.), it's often said that the IOC likes to have the games staged in the US because it appeases the broadcast partners and their potential advertisers/sponsors.

One theory is that this is an advantage for Chicago's bid because broadcast partners (ie NBC) and sponsors (McDonalds, Visa, etc.) would like to have the Olympics in their primary markets rather then secondary, foreign markets (like Rio).

The thing to note from the article is that the IOC is rumored to be contemplating awarding the broadcast rights after they decide where the 2016 games would be held (normally they award broadcast rights prior to naming the host city). If this happens, I think it sends a strong signal that the IOC is aware and looking to optimize how much they can get for the next round of Broadcast rights.

Although this is only one of many variables that the IOC will look at when determining the host city, I think it's a big plus for the Chicago bid. After all, the IOC is a business and at the end of the day it needs capital to exist.

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