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Commercialisation

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Under national organising committees
The Olympics have been commercialised to various degrees since the initial 1896 Summer Olympics in Athens, when a number of companies paid for advertising, including Kodak.  In 1908, Oxo, Odol mouthwash and Indian Foot Powder became official sponsors of the London Olympic Games. Coca-Cola sponsored the 1928 Summer Olympics, and has subsequently remained a sponsor to the current time. Before the IOC took control of sponsorship, national organising committees were responsible for negotiating their own contracts for sponsorship and the use of the Olympic symbols.

Under IOC control
The IOC originally resisted funding by corporate sponsors. It was not until the retirement of IOC president Avery Brundage, in 1972, that the IOC began to explore the potential of the television medium and the lucrative advertising markets available to them. Under the leadership of Juan Antonio Samaranch the Games began to shift toward international sponsors who sought to link their products to the Olympic brand.

Budget
During the first half of the 20th century the IOC ran on a small budget. As president of the IOC from 1952 to 1972, Avery Brundage rejected all attempts to link the Olympics with commercial interest. Brundage believed the lobby of corporate interests would unduly impact the IOC's decision-making. Brundage's resistance to this revenue stream meant the IOC left organising committees to negotiate their own sponsorship contracts and use the Olympic symbols. When Brundage retired the IOC had US$2 million in assets; eight years later the IOC coffers had swelled to US$45 million. This was primarily due to a shift in ideology toward expansion of the Games through corporate sponsorship and the sale of television rights.  When Juan Antonio Samaranch was elected IOC president in 1980 his desire was to make the IOC financially independent.

The 1984 Summer Olympics became a watershed moment in Olympic history. The Los Angeles-based organising committee, led by Peter Ueberroth, was able to generate a surplus of US$225 million, which was an unprecedented amount at that time. The organising committee had been able to create such a surplus in part by selling exclusive sponsorship rights to select companies. The IOC sought to gain control of these sponsorship rights. Samaranch helped to establish The Olympic Programme (TOP) in 1985, in order to create an Olympic brand. Membership in TOP was, and is, very exclusive and expensive. Fees cost US$50 million for a four-year membership. Members of TOP received exclusive global advertising rights for their product category, and use of the Olympic symbol, the interlocking rings, in their publications and advertisements

Effect of television
The 1936 Summer Olympics in Berlin were the first Games to be broadcast on television, though only to local audiences. The 1956 Winter Olympics were the first internationally televised Olympic Games, and the following Winter Games had their broadcasting rights sold for the first time to specialised television broadcasting networks—CBS paid US$394,000 for the American rights. In the following decades the Olympics became one of the ideological fronts of the Cold War, and the IOC wanted to take advantage of this heightened interest via the broadcast medium. The sale of broadcast rights enabled the IOC to increase the exposure of the Olympic Games, thereby generating more interest, which in turn created more appeal to advertisers time on television. This cycle allowed the IOC to charge ever-increasing fees for those rights. For example, CBS paid US$375 million for the American broadcast rights of the 1998 Nagano Games, while NBC spent US$3.5 billion for the American rights of all the Olympic Games from 2000 to 2012. In 2011, NBC agreed to a $4.38 billion contract with the International Olympic Committee to broadcast the Olympics through the 2020 games, the most expensive television rights deal in Olympic history. NBC then agreed to a $7.75 billion contract extension on May 7, 2014, to air the Olympics through the 2032 games. NBC also acquired the American television rights to the Youth Olympic Games, beginning in 2014, and the Paralympic Games.  More than half of the Olympic Committee's global sponsors are American companies, and NBC is one of the major sources of revenue for the IOC.

Viewership increased exponentially from the 1960s until the end of the century. This was due to the use of satellites to broadcast live television worldwide in 1964, and the introduction of colour television in 1968. Global audience estimates for the 1968 Mexico City Games was 600 million, whereas at the Los Angeles Games of 1984, the audience numbers had increased to 900 million; that number swelled to 3.5 billion by the 1992 Summer Olympics in Barcelona. With such high costs charged to broadcast the Games, the added pressure of the internet, and increased competition from cable, the television lobby demanded concessions from the IOC to boost ratings. The IOC responded by making a number of changes to the Olympic program. At the Summer Games, the gymnastics competition was expanded from seven to nine nights, and a Champions Gala was added to draw greater interest. The IOC also expanded the swimming and diving programs, both popular sports with a broad base of television viewers. Due to the substantial fees NBC has paid for rights to the Olympics, the IOC has allowed NBC to have influence on event scheduling to maximize U.S. television ratings when possible.

Olympic marketing
The sale of the Olympic brand has been controversial. The argument is that the Games have become indistinguishable from any other commercialised sporting spectacle. Another criticism is that the Games are funded by host cities and national governments; the IOC incurs none of the cost, yet controls all the rights and profits from the Olympic symbols. The IOC also takes a percentage of all sponsorship and broadcast income. Host cities continue to compete ardently for the right to host the Games, even though there is no certainty that they will earn back their investments. Research has shown that trade is around 30 percent higher for countries that have hosted the Olympics.

 

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