The Olympics: A Television Upset!

To the delighted astonishment of media industry analysts in the United States, the NBC network pulled off a shocking upset in the viewership ratings competition last week! Despite the general downturn in the fortunes of broadcast television, the opening ceremonies of the Vancouver Winter Games attracted 32.6 million viewers, making it one of the most watched ceremonies of its kind in American history.

Public interest in the games was undoubtedly enhanced by the horrific death of a Georgian luge athlete, who crashed into an exposed steel beam at a speed exceeding 140 kilometers per hour. The tragedy was filmed by television crews and broadcast repeatedly around the world.

The previous week’s smashing success of the Super Bowl, the championship game of American style football, may have also stoked interest in big budget sporting events. The Super Bowl, featuring an upset victory by the Saints of hurricane ravaged New Orleans, Louisiana, was the most watched program in American television history.

Lost in the hype, though, was NBC’s quiet acknowledgement that it expected to lose as much as a quarter of a billion dollars on its Olympic television contract. Signed in rosier economic times in 2003, NBC agreed to spend a combined $2 billion on the 2010 and 2012 Games. At the time, though, it was only spending a combined $2.3 billion on the 2004, 2006, and 2008 Games; in other words, NBC agreed to spend almost as much money for the two upcoming Olympics as it had previously agreed to spend for the preceding three events.

From Amateurs to Professionals

Although the Olympic Games have now grown into a huge business enterprise, they were originally launched to provide amateur sportsmen across the globe with an opportunity to engage in relatively simple tests of strength, stamina, and skill. The marquee competition has traditionally been the decathlon, a set of ten such competitions over two consecutive days, leading to the crowning of the champion as the World’s Greatest Athlete.

From the very beginning, though, the modern Olympic games occasionally veered away from its focus on global amateur competition. At the 1904 St. Louis Games, for instance, 580 of the 650 athletes were American citizens. At the 1936 Berlin Games, Adolph Hitler disseminated Nazi propaganda. And in the modern era following World War II, the United States and Soviet Union often used the Games to make political statements, trading retaliatory boycotts of the 1980 Moscow and 1984 Los Angeles games.

To this day, the Games have indeed retained their role as a truly global competition, welcoming 82 nations to the 2010 Vancouver event and 204 nations to the 2008 Beijing event. In fact, the 204 nations that participated in the 2008 Olympics far exceeded the 192 nations that are recognized by the United Nations, due to the willingness of the Olympic movement to recognize the cultural independence of territories like Puerto Rico.

However, the positioning of the Olympics as an amateur event was severely eroded by the mass commercialization of the 1984 Los Angeles Games, which actually turned a profit of $223 million. And then, in 1992, the dominant and hugely popular gold medal performance of the American Dream Team of professional basketball players shattered the spirit of amateur competition in the Games.

The Power of Money

In 1992, viewers indeed tuned in to witness the bizarre spectacle of relatively inexperienced basketball teams from nations like Angola and Croatia losing to America’s finest professional basketball players by an average of 43 points. However, the novelty of watching wealthy athletes from powerful nations dominate their competition has slowly worn off, leading professional leagues such as the National Hockey League (NHL) to consider avoiding future Olympic competitions.

So now, from a business perspective, the $2.3 billion question is whether massive commercialization will ultimately save the Olympic movement or destroy it. Those who believe in the power of money may argue that additional money can finance grander ceremonial spectacles and attract more talented athletes. However, those who believe in the original amateur spirit of the Olympics may respond that the games are now merely one more global corporate sporting event, along with the World Cup, the Grand Slams of golf and tennis, and even the World Baseball Classic.

Those looking to history for a clue about whether the power of money will save or destroy the Olympic movement, though, may wish to ponder the fate of another once popular global event that has declined in popularity. The World’s Expos and Fairs, which once helped popularize the ice cream cone, the Ferris Wheel, the Parachute Jump, and the iconic New York Unisphere, lost their luster after the highly commercialized Knoxville and New Orleans Fairs resulted in several high profile financial failures in 1982 and 1984.

Ironically, the Olympic Movement itself appeared headed for irrelevance in 1900 and 1904 after the Paris and St. Louis games paled in comparison to the World’s Expos that were held in those cities. The Olympics then regained its footing after recommitting to its amateur ideal; it remains to be seen whether its increasingly commercialized focus will result in it following the World’s Fairs into a comparable decline.