You wake up at 5:00 a.m., train seven hours a day, maybe work a day job, and have just enough time left over to eat and sleep. Such is the life of an Olympian. The Games are the ultimate showcase of these athletes’ hard work and dedication. Unfortunately, away from the athletes, there is infighting among the governing bodies. And that’s the real story behind Chicago’s failed bid for the 2016 Olympic Games.
Last week, I had the great pleasure of speaking with an Olympic medal winner who shared his inside knowledge of how this played out. According to him, Chicago never had a chance, and America won’t anytime soon. Regardless of an observer’s political leanings, this was a lose-lose situation for President Obama that could have been avoided.
Revenue sharing divides the two governing Olympic committees: the International Olympic Committee (IOC) and the U.S. Olympic Committee (USOC). Think of the United Nations and the U.S. government, and you’ll get a feel for the relationship between the IOC and the USOC. The IOC views itself as the “One World” Olympic governing body (UN), while the USOC’s home country, the United States, is the source of most of the revenues.
You just need to follow the money to get the big picture. Under contract, the USOC receives 13% of Olympic television fees and 20% of global marketing revenues, which amounted to about $300 million from 2005 through 2008. The IOC receives a similar amount, but its cut is split 204 ways. That’s because it represents the other 204 national Olympic associations. Not quite an equal share of the pie, in their eyes.
Before you give too much sympathy to the IOC, realize that U.S. broadcasters pay much larger TV and marketing fees into the IOC’s overall budget than the foreign networks. NBC paid about $894 million to televise the Beijing Games, compared to only $443.5 million from the European Broadcasting Union and $7 million from Chinese networks.
Until the IOC and USOC work out their differences, the Games most likely are not coming to America. The IOC has the votes to control who gets the Games and wants a bigger slice of the revenue pie. As NBC Sports Chairman Dick Ebersol told the Chicago Tribune, “This was the IOC membership saying to the USOC there will be no more domestic Olympics until you join the Olympic movement. Chicago never had a chance, it turns out.”
Latest posts by E.J. Smith - Your Survival Guy (see all)
- Targeting the Rich with Taxes Tends to Hurt the Poor - August 17, 2017
- Dan Mitchell Commenting on the DC Budget Fight - August 16, 2017
- Here’s Why Politicians Are Terrible at Running the Economy - August 15, 2017