The Olympic Brand, How Powerful Is Too Powerful?

Guest Post by Sheldon Persad

The fine people at Blade Creative Branding asked me if I thought the Olympic brand was strong or weak, or somewhere in the middle. After giving it some thought, I considered another word that I would use to describe the Olympic Brand – powerful. In fact, the Sopranos wished they had such power. Members of the International Olympic Committee (IOC) are treated like royalty when they travel the world, and while they do not receive a salary, they do receive “gifts.” On their documents, the IOC is described as “the supreme authority of the Olympic Movement” and they are responsible for deciding which countries host the games. In discussing the Olympic brand, one has to touch on related topics such as scandals, finances, revenue, human rights and what ties us to the brand.

More than one scandal has surfaced over the years concerning IOC members, but these scandals have done little to tarnish the Olympic brand. According to articles in the Associated Press and Sports Illustrated, several scandals surrounded the Nagano (1998) and Salt Lake City (2002) bid committees. In Nagano, allegedly over 60 members of the IOC were paid an estimated 2.5 million yen ($21,905US) as part of the negotiation fees to secure the games. Tickets to the Super Bowl, trips, expensive hotel stays, and jobs for family members were some of the allegations that came to light during the Salt Lake City scandal. It should be noted that IOC members are not permitted to receive gifts costing more than $150US. Regardless of the scandals, countries still line up to bid for the games. Turkey, Japan, Spain, Azerbaijan, Qatar and Italy all had desires of hosting the 2020 summer games. Japan (Tokyo) was ultimately selected (in September 2013) with Italy’s bid being cancelled, and two other countries dropped from contention during the bidding process.

IOC Powerful QuoteThe Olympics is a wonderful event, and conversations about the Olympics should focus on the incredible feats of the athletes. Sadly, conversation often revolves around how much the games cost and how much revenue the games generate. This is partly due to the fact that countries often go well over budget in preparation for the games. Montreal Mayor Jean Drapeau spent years wooing IOC members to vote for his city, because he pictured a legacy, and monuments, that would endure years after the games. What Montreal (1976) received was an Olympic games that exceeded a billion dollars in cost for the first time. By all accounts, it was a financial disaster that cost the city well after the games were done (check out The Billion-Dollar Game, by Nick Auf der Maur). Interesting to note, the 2014 games in Russia cost an estimated 50 billion dollars.

As a result of the London (2012) games, the IOC generated an estimated $3.3 billion in revenue. While this pales in comparison to top global grosser Wal-Mart’s $460 billion, do any of us have long lasting fond memories or strong emotional connections related to any of our visits to Wal-Mart? What if I mention Sydney Crosby’s gold medal winning goal? You would likely be able to tell me exactly where you were. And therein lies the greatest value of the Olympic brand. Any brand that connects to us on a personal, emotional level is powerful.

The IOC controls all television and re-broadcasting rights of their events. As such, over 50% of the revenue they generate is due to the TV rights, and viewership increases each games. Coverage increased from 62,000 hours for Beijing (2008) to 100,000 hours for London, with global reach rising from 3.5 to 3.7 billion viewers (source Olympic.org). With the increase in coverage, viewers and platforms, the IOC continues to hold on to the rights with a very tight fist.

IOC Control QuoteIn addition to the TV rights, sponsorships, licencing and advertising also generate significant revenue streams for the IOC. And like their protection of their TV rights, the IOC strictly governs all aspects of marketing and promotion. For example, there are strict guidelines with how much an athlete can promote their own personal sponsors. Rule 50 of the Olympic charter states “Any manufacturer’s identification that is greater than 10 percent of the surface area of the equipment that is exposed during competition shall be deemed to be marked conspicuously.” And such conspicuously marked advertising is not permitted. Bottom line, they control the size of all other logos you see on billboards, signs, t-shirts, cups, jackets, and athlete’s equipment to ensure the Olympic brand is prominent.

While the Olympic brand is distinct and somewhat unchanging, each host country is held under a microscope. We learn about the unique nature of each nation as a result of involvement with the Olympic brand. For example, let me share two stories that speak volumes about the political landscape of two different countries. A colleague of mine visited Beijing a few months before their Olympics. A group of global representatives were visiting some of the venues, and one day they toured around one of the bike courses. A member of the group mentioned to the Beijing Olympic Committee representative that the 40km bike course was in poor shape, with pot holes and bumps along the course. Road crews were assigned to fix the course that night, and the group woke to see the entire 40km course was re-paved to perfection.

At the other end of the spectrum were the games in Greece (2004). Months leading up to the games there was talk that the games would be switched back to Sydney (2000 host) again because the facilities in Greece were not going to be ready, plus there was potentially a significant pollution problem. A few months before the Greece games a member of the Canadian Olympic Committee was touring the facilities. He walked through the stadium where the opening ceremonies were to take place and was able to speak to one of the workers. He asked the worker, “Do you think the stadium will be ready in time?”  To which the worker responded, “Ready in time for what?”

It is noteworthy to mention, leading up to the Beijing Olympics the government put strict restrictions on vehicle use (bus, cars and vans) in an effort to bring pollution down. In Beijing support for the Olympic brand was literally legislated, regardless of any human rights issues.

There have also been several human rights issues that have surfaced during the games in Russia. But let’s not end on a sour note. During the first week of the Russian games the power of the IOC came into play. The IOC persuaded the Russian government to resolve issues with hundreds of Russian workers who were making claims that they were not paid for their work on the buildings and infrastructure. As a result of the IOC stepping in, the government has promised to pay the workers approximately $8.3 million in back pay. Such stories do show the IOC in a favorable light, which certainly enhances the value of the Olympic brand.

IOC The Question IsTo conclude, the Olympics are still highly sought by nations across the Globe. A country that does host the Olympics has lasting signs of the brand well after the games are done. The question is, is the cost worth it? In some countries, the brand is embraced with open arms. In other countries the brand is met with protests and questions of cost. In an era where previously strong household brand names like Eaton’s and Sears have all but disappeared, I can assure you, the Olympic Brand is not going anywhere.

Sheldon PersadAs a co-owner of Personal Best, and a selected service provider for the Canadian Sports Institute, Sheldon’s clientele has extended to four continents. Sheldon is a certified Stress Management Consultant, and certified coach in several different sports. He has been coaching for close to 30 years, and his experience includes being the coach of athletes who have competed at world championships, the Commonwealth Games, the Pan-American games, and the Olympics (summer and winter) from 18 different national team programs.

He is a co-founder of the Certified Professional Trainers Network (CPTN), the co-author of two books, and award winning international conference presenter. He has twice hosted his own radio show segment and continues to teach high performance coaches at a local college. Above all, Sheldon enjoys spending time with his wife, and tries to stay in shape in an effort to keep up with his kids. www.personalbest.ca

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Blade Guest Post Series

The Blade Guest Post Series features experts and authorities from a wide variety of industries. All authors have been invited to share their personal thoughts on the given subject and do not necessarily represent the views of Blade Creative Branding.

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