Olympic Sales Strategy

The International Olympic Committee (IOC) revamped its sales strategy by “ending a decades-old practice of selling TV rights to broadcasting unions, which traditionally covered large regions of continents” (Mickle, 2012).  In the past the U.S. broadcast money had played a large part in filling the IOC’s “coffers” (Mickle, 2012).  For the first time Olympic T.V. rights revenue from the U.S. will fall below 50 percent of “the IOC television money during the next quadrennium” (Mickle, 2012).

The new sales strategy shift has secured over $3.7 billion for the 2014 and 2016 Games globally, $2 billion “of which came from NBC’s deal signed last summer” (Mickle, 2012).  Back in 2009, “Brazillian broadcasters reportedly paid $8 million to $9 million for Olympic TV rights as part of a Latin American broadcasting union called OTI” (Mickle, 2012).  Since the separation from the Broadcasting Unions the IOC began selling the media rights to three media companies.  The deal is worth over $170 million, which is an incredible increase since splitting from the Broadcasting Unions.

“With the 2016 Games in Rio being billed as the first Latin American Olympics, the IOC Managing Director of TV and Marketing Services, is particularly optimistic that the organization will be able to increase TV rights revenue in Latin America, where it still has rights to sell in Mexico” (Mickle, 2012).  In the past the IOC has sold to the area by using the Broadcasting Union OTI and ESPN.  The new strategy will have the IOC looking to selling individual rights to countries such as Peru, Chile and other neighboring markets to increase revenue.

With a quick review of the numbers it is easy to see that the IOC made a wise decision by changing its selling strategy. In the Brazilian market alone the increase is absolutely incredible.   As the IOC reaches out to the different markets for the selling of the media rights, it will be interesting to see what the final number is by the 2016 Olympic Games in Rio.  Another interesting factor to think about will be the status of the Olympic athletes union.  Will one be in place by 2016?  Will rule 40 (the sponsorship rule) be eliminated? And finally, will the athlete’s be receiving a portion of this financial increase?

Mickle, T. (2012). Sales strategy helps ioc boost rights fees. Street & Smith's Sports Business Journal, 15(16), 1,31.