Covering the Business Side of the Olympics

The Olympics started more than a century ago as a celebration of amateur sports.

Today, they've clearly become big business, with pro athletes competing for both gold medals and advertisers' gold, with television rights deals worth more than $1 billion and with hundreds of millions of tax dollars going into staging the games.

Reporters who want to cover the business side of the Olympics will find it's easier to do than covering the dollar and cents of most professional American sports, whose team owners are far less forthcoming about opening their books.

The International Olympic Committee releases its finances every four years. The most recent report, which covers the period from 1997 through the 2000 games in Sydney, can be found on the group's Web site, www.Olympics.org, under the heading of Organization. The English language version of the fiscal report can be found at the IOC's Web site, along with a summary of broadcast, sponsorship, ticketing and licensing revenue since 2000.

For the record, the IOC will see broadcast revenue this year of just under $1.5 billion, up from $1.3 billion it got at Sydney in 2000 and $738 million it got from the less lucrative Winter Olympics in Salt Lake City in 1998. Of TV rights fees for Athens, $798 million, or just over half, comes from NBC Universal, the General Electric unit that is broadcasting the games in the United States.

NBC has the U.S. broadcast rights through the 2012 games in a yet-to-be-selected city. Its rights fees for the upcoming games are as follows:

• $614 million for the 2006 Torino Winter Games.
• $894 million for the 2008 Beijing Summer Games.
• $820 million for the 2010 Vancouver, B.C. Winter Games.
• $1.181 billion for the 2012 Summer Games.

Despite the steep rights fees, General Electric has been able to report a profit from its Olympic broadcasts, unlike the losses reported by networks paying top dollar sports rights fees, such as the NFL, Nascar or Major League Baseball.

Executives at General Electric said earlier this month it expected revenue of at least $900 million and an operating profit of $20 million from the broadcasts from Athens this year. Since then reports have circulated that advertising revenue could get closer to the $1 billion mark.

Sponsorship revenue is the other major revenue source for the Olympics. The IOC report shows $1.3 billion in sponsorship revenue from 2001 through 2004, or about 32 percent of total revenue during that time.

The top sponsors of the games during those four years include Coca-Cola, John Hancock, Eastman Kodak, McDonald's, Panasonic, Samsung, Atos Origin, Sports Illustrated, Swatch, Visa and Xerox.

Ticket sales, which early on have been disappointing for the Athens games, were expected to provide only $608 million, or 14 percent of revenue, during this period of time. Licensing and other revenue is projected to bring in only $81 million, or 2 percent of revenue.

Most of the revenue that comes in through the IOC goes to the organizing committees selected to host the games. The Athens organizing committee will get about 60 percent of the IOC broadcasting and sponsorship dollars. The organizing committees also raise money from their own sponsorship deals, and generally receive government assistance in the construction of venues, infrastructure and security for hosting the game.

Most of the rest of the money from the IOC goes to the National Organizing Committees, which field the teams of athletes that compete in the games. About $305 million in revenue from the IOC goes to the NOCs that sent teams to Salt Lake City and Athens. Most of the NOCs also get their own national sponsors deals.

The U.S. Organizing Committee has the most lucrative sponsorship deals, worth about $22.3 million last year, according to its annual report, which is available on its Web site. Also on its Web site is its 990 tax form, required of all not-for-profit organizations, which details all salaries paid to top staff of the somewhat embattled organization.

The cities competing to host the 2012 games include New York, Paris, London, Moscow and Madrid. New York has disclosed it is spending $22.5 million just to make its bid. Its bid presentation forecasts ticket revenue of $813 million, local and national sponsor revenue of $687 million, and total revenue of $1.8 billion.

Much of the construction of facilities that would be used for the 2012 New York games are to be privately financed, including $1.5 billion for an Olympic Village that is designed to be turned into housing after the Games. The state of New York also has committed $250 million to the project.

The most expensive item, the $5 billion Olympic stadium, planned for the city's West Side, would be built with a combination of state and private funding, including a contribution from the New York Jets football team, which would use it after the games.

New York's application to host the games, with some of its organizing committee's financial projections, is available on its Web site.