SCANDALS, MEMBERSHIP PERKS AND POLITICS: BILLION-DOLLAR OLYMPICS MORE THAN JUST SPORT
- The Games are big business and generate billions of dollars in income for the International Olympic Committee, a non-profit organisation
The Paris Olympics involve about 10,500 athletes from 200 countries or regions with history on the line - but the event is about more than just fun and games.
A giant business that generates billions of dollars in income for the International Olympic Committee (IOC), the Games are also a proxy for geopolitical influence seen through the standings in the medal tables, the presence of world leaders at the opening ceremony and the national anthems serenading gold-medal winners.
Despite claiming to be politically neutral, the IOC wields its influence with an iron first when it comes to generating the revenue that keeps it in business. Here is a look at how they operate.
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The Olympics is a business
The IOC is officially a not-for-profit, non-governmental body based in Lausanne, Switzerland. It generates 91 per cent of its income from selling broadcast rights (61 per cent) and sponsorships (30 per cent). Income for the latest four-year cycle of Winter and Summer Games ending with the Tokyo Olympics in 2021 was US$7.6 billion (HK$59.3bn).
According to the organisation, it returns 90 per cent of its income back into sports, although athletes directly get only a small slice. There may be a move afoot to change that. The IOC opened a new headquarters in 2019 at a reported cost of 190 million Swiss francs (US$200m). Host nations pick up most the bills for staging the Olympics.
The cost for the Tokyo Games was officially listed at US$13bn. More than half was covered by Japanese government entities.
IOC membership perks
In all, there are around 100 members who select their own colleagues and the longest serving is Princess Nora of Liechtenstein. At least six other royals are IOC members. However, most of the power is vested in President Thomas Bach, a lawyer from Germany who also is a member, and his executive board.
IOC members are technically volunteers, though all of Bach's expenses are covered. The IOC's annual report said this amounted to US$370,000 in 2022 and included an annual "indemnity" of Euro275,000. His tax liabilities of US$163,000 in Switzerland were also paid. IOC members receive per diems of between US$450-US$900 to attend meetings and get first-class travel and five-star accommodation.
Unpaid volunteers
The local organisers who help the host nation run the Games typically receive uniforms, food when they work and some minor transport costs. Accommodation is seldom included.
Paris was looking for 45,000 volunteers. Tokyo initially went after 80,000. Typically, only the well-off can volunteer. The 2016 Olympics in Rio de Janeiro struggled to find volunteers because many of the city's poor could not work for free.
Some showed up on the first day, collected their uniforms and did not return. The volunteer system could be viewed as economic exploitation.
Some Paris volunteers have threatened not to show up to express their displeasure over Olympic spending and French pension reforms.
Sports and politics mix
The IOC said the Olympics transcend politics. But in reality, they are highly political. It is noteworthy that the IOC has observer status at the United Nations, indicative of its self-perceived role in the world.
Political scientist Jules Boykoff noted in his recent book "What Are The Olympics For" that athletes march in the opening ceremony by country. They could just as well, he noted, march grouped by sports. But that would downplay the nationalist element, a key to the Games' popularity.
Adolf Hitler used the 1936 Berlin Olympics to promote his agenda. The torch relay has its origins in Berlin.
Is it worth hosting?
The IOC used to award the Games seven years in advance. In 2015, as it was set to award the 2022 Winter Olympics, they had only two unlikely candidates: Beijing and Almaty, Kazakhstan. China's capital won in a close vote.
Many European countries including Sweden, Germany and Switzerland dropped out because of high costs. Since then, the IOC has eliminated the old bid system. It had only two bidders in 2017 for the 2024 Summer Games: Paris and Los Angeles. It awarded Paris those Games and gave Los Angeles 2028.
In 2021, it awarded Brisbane, Australia, the 2032 Games, largely because of influential IOC member John Coates. An Olympic study by Victor Matheson and Robert Baade, two American college professors, concluded that "in most cases the Olympics are a money-losing proposition for host cities."
Scandals and corruption
Olympics have frequently been embroiled in misconduct, perhaps because of the large amount of public money involved and rushed deadlines.
The most recent Tokyo Games involved a bribery scandal over contracts, sponsorships and the bid itself.
The 2016 Rio de Janeiro Olympics were out of money when they opened. Then-IOC member Carlos Nuzman, who headed the Games, was arrested on corruption charges shortly the Games finished.
In 2014, the Winter Games in Sochi, Russia, were marked by a state-run doping scandal and cover-up. Corruption in the bid process in the 2002 Salt Lake Winter Games forced some ethics reforms.
And organisers of the 1998 Nagano Winter Olympics in Japan were widely reported to have destroyed incriminating financial records that showed they spent millions on lavish entertainment for IOC members.
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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2024-07-18T04:07:56Z
