Doug Robinson: IOC earns a perfect 10 for its business model

Published: Monday, July 23 2012 10:54 p.m. MDT

Know who's going to collect the most gold when the Olympic Games get under way later this week in London? The International Olympic Committee, by about a metric mile, guaranteed.

Talk about a great business model. The IOC couldn't lose money if it tried. If making money were an Olympic event, Team IOC would lap the field.

Imagine if you were running a business and struck up a business plan like the one the IOC has stumbled upon. It's better than owning a Las Vegas casino. Charles Ponzi would be jealous.

1. Not only do you get some country/city/sucker to host the IOC's traveling Olympic circus, the host agrees to pay for the whole thing. In fact, cities fall all over themselves for the honor, wining and dining and fawning over IOC big shots like visiting heads of state (not that Salt Lake City doesn't know anything about this). Is there a downside to this gig?

2. You don't have to build or pay for dozens of arenas and housing for the Olympics. The host cities do that for you, every four years. There's pretty much no limit on what they will spend, either. London's original bid was for $6.5 billion. The cost has ballooned to $13 billion. It always works out that way.

3. You don't have to build mass transit and housing for your Olympic show. The host takes care of that, too.

4. Need security? No problem. The host will pay for that, too.

5. You don't need to pay for labor. The host city will provide thousands of volunteers who will work long hours for your Olympic business without pay. All you have to do is throw a T-shirt, a few Olympic pins and some snacks at them and they're happy. Better yet, let the local organizing committee take care of that for you.

6. You don't have to do any marketing. The host city, media and corporate sponsors do all of that for you — and pay you for the privilege. The IOC collects billions from television contracts — the BBC just signed on for $1 billion for the British TV rights for the next four Games; NBC bought U.S. Olympic TV rights for 2010 and 2012 for $2.2 billion. For the 2008 Beijing Games, the IOC pulled in a reported $436 million just from sponsors.

7. Here's the best part: You don't even have to provide or pay for the entertainment — the entire reason the show exists. It's all free! That includes the athletes and the performers in the opening and closing ceremonies. They do it free of charge.

What saps those NBA and NFL owners are. They're paying hundreds of millions of dollars in athlete salaries when the IOC gets athletes to perform for nothing. Not even the NCAA managed to pull that off — they had to throw a scholarship at their athletes.

Talk about a sweet deal. The athletes are willing to perform free just so they can compete on the biggest stage in sports. Even the best players of the NBA and professional tennis — athletes who wouldn't normally walk across the street without getting paid for it — are playing in the Olympics gratis.

Maybe the athletes are the show, the performers TV networks and fans pay to watch. They still don't get a share of the billions of dollars that are collected by the IOC and the national organizing committees and, indirectly, the TV networks and corporate sponsors. IOC tax records reported gross revenue of $2.4 billion for the 2008 Beijing Olympics and a $383 million profit. The athletes got to keep their sweats.

Not that you should worry about the athletes. The vast majority of them struggle financially just to compete in the Games. According to a survey conducted by the USA Track and Field Foundation, only half of U.S. track and field athletes who rank in the top 10 nationally in their events earn more than $15,000 from the sport. Most of them rely on sponsorships, but those have dried up with the downturn in the economy and now the IOC has greedily cut off the rest.

The IOC has even issued an order that athletes cannot show their sponsorship logos or discuss their sponsors during the Games — they can't even tweet such information — without risking severe penalties. The one opportunity the athletes have for visibility and financial reward via marketing is gone.

Adding insult to injury, you don't even have to give the athletes tickets. The IOC makes them buy tickets like everyone else, and during past Olympics they couldn't even do that. Parents have been known to hold fundraisers so they could see their children perform in the Olympics. The tickets tend to go instead to corporate sponsors and the rich.

Who created this arrangement, Stalin?

Mark Cuban, the Dallas Mavericks owner, summed up the situation best when he told The Associated Press: "If you look up 'stupid' in the dictionary you see a picture of the USA Dream Team playing for free for corporate America so the U.S. Olympic Committee can make billions of dollars. So, if you come up with something that you own that you can give to me for free so I can make billions of dollars, I want it."

Email: drob@desnews.com

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