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Portfolio > Economy & Markets

Olympic Marketing: It All Started in 1896

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The Olympics are set to begin in London with the opening ceremony on Friday, and who among us isn’t ready for the pageantry, the athleticism, the poignant stories and the endless commercials extolling “the official” this or that product of the games?

OK, maybe none us really looks forward to the endless commercial endorsements that seem to grow in number with each Olympiad. It might surprise you find out that the sponsorships started with the dawn of the modern Olympics in 1896.

Athens, Greece, was the scene of those games. Before the athletes could compete, however, the stadium needed major repairs. In stepped George Averoff, a Greek philanthropist who was asked by the cash-strapped Greek government (sound familiar?) to donate to the cause.

Averoff complied, to the tune of $120,000. For his gift, Averoff was the subject of a statue and had a battleship named for him. Greece was able to keep the games and avoid the humiliation of seeing them staged in Hungary.

From the beginning, ads in the official program brought in money, but it wasn’t until the Stockholm Games of 1912 that the marketers hit on the idea that has become a cash cow, as well as the butt of jokes: selling “sole” merchandising rights. Ten Swedish companies paid for the rights to take photos and sell goods at the Olympics. How much they paid isn’t clear, but the seed for generating revenue was planted. It would blossom as the decades passed.

It wasn’t until both the Summer and Winter Games came to the United States in 1932 that the American spirit of capitalism swept the games like a furious storm. The official Olympics website tells the story. “The California approach to the Games was typically exuberant and money-[oriented],” the site says, quoting the Official Report of the 1932 Olympic Games. “Zack Farmer, Chairman of the OCOG, described the Games afterwards: ‘The 1932 Games were the first ones that ever paid off… We gave them a wonderful Olympics and a profit to boot.’ “

The Los Angeles Games were the first to include an Olympic Village to house the athletes. The shadow of capitalism extended to the Winter Games in Lake Placid, N.Y., that same year, when department stores up and down the East Coast featured the Olympics in window displays as the marketing power of the games continued to grow.

The 1936 Berlin Games might be best remembered for Jessie Owens’ performance in front of Adolf Hitler and in the face of his Nazi ideals. Although World War II would interrupt the games until 1948, Germany brought an innovation that would forever change their nature: television. The first pass at televising the spectacle was an experiment that encompassed 138 viewing hours and was available to 162,000 viewers in the Berlin area. The London organizers remembered the experiment a dozen years later. They sold the broadcast rights to the BBC for $3,000. The BBC cried poverty, the Olympic website said, “but, as they were all gentlemen, when the BBC paid up the organisers never cashed the cheque.” About a half million people are estimated to have watched, most within 50 miles of London.

The Melbourne games of 1956 marked the last time the games wouldn’t be televised in the United States. Contract negotiations broke down and prevented the broadcast of the Olympiad in this country. On the other hand, that same year marked the first live telecast of the Winter Games, which were held in Cortina D’Amepezzo, Italy. There was one TV mishap when a torchbearer tripped over a cable, briefly extinguishing the flame.

Avery Brundage, an American and for decades the controversial head of the International Olympic Committee, apparently wasn’t worried about the impact of the Summer Games being blacked out in the U.S. and much of the world: “Dear Friends, we in the IOC have done well without TV for 60 years and will do so certainly for the next 60 years too,” he is quoted as saying on the Olympics website.

Despite Brundage’s statement, a charter change in 1958 mandated the IOC would be in charge of selling the broadcast rights. That was a turning point that led to the 1960 Rome Games being broadcast live in 18 European countries and delayed a few hours in North America.

Corporations ratcheted up their Olympic ties in 1964, with more than 250 paying fees to be sponsors in Tokyo. One tie-in that you would never see today was the branding of a cigarette, Olympia, which brought in more than a million dollars to the Olympic Committee. There’s no statistic on how many of the athletes smoked the brand.

The watchmaker Seiko was another notable sponsor in Japan, inventing quartz timing to determine the winners of various track and swimming events.

The Mexico City Games of 1968 were the first broadcast in color. As corporate sponsorships grew (628 sponsors and suppliers joined the “Olympic movement” for the 1976 games in Montreal, some might have wondered if too much sponsorship was a good thing.

Then the U.S. won the rights to the 1984 games—a mere four years after leading a 61-nation boycott against them in protest of the Soviet invasion of Afghanistan.

Los Angeles was again the venue, and a new era of corporate participation dawned. Peter Ueberroth led the organizing committee to a record profit of $220 million. He turned the trick by keeping costs low through the use of existing athletic facilities and selling sponsorships like mad. The fact that the Soviet bloc boycotted made little difference except to those who won food at McDonald’s for every medal the U.S. collected. The press criticized the committee’s efforts before the torch was lit, but Ueberroth had the last laugh when he was named Time magazine’s Man of the Year. The U.S. knack for moving the financial ball forward continued in 1996 in Atlanta and 2002 for the Winter Games in Salt Lake City. The Atlanta Games were paid for entirely with private money and managed to break even. It was also the centennial celebration for the modern Olympics, so the IOC underwrote the cost of broadcasting the event in Africa, ensuring the largest audience possible. The IOC claims that 3.2 billion watched, which was 90% of the possible audience.

The Sydney Games in 2000 generated $3 billion from sponsorships, broadcast rights and ticket sales and have set the standard for sports as the most watched event, with 3.7 billion viewers in 220 countries.

As the torch heads to London for this year’s games, the marketing and television efforts continue ever upward. The usual sponsors like Seiko, Coca-Cola and Nike are aboard, and the Olympics can now be seen on multiple TV channels and the Web.

From humble beginnings when the Olympics were saved by a single man’s donation, the marketers have turned a spectacle into a marketing bonanza.


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