The Twentieth Winter Olympiad is underway in Turin, Italy, and while the athletes and spectators from around the world are competing at their highest levels, the organizers of the event are breathing a larger sigh of relief than any of the athletes who have won a gold medal. Turin's olympic organizers are celebrating their getting the 2006 winter games under budget, though it seemed to be a struggle to the last day, with organizers not knowing the day before the opening ceremonies if the costs would be covered.
The olympic operating budget for the Turin games is estimated at nearly one and a half billion dollars, a staggering sum, given the events last the whole of three weeks. But, how does one smallish town in Italy generate that much operating revenue to cover the costs of the games? The wonderful world of corporate sponsorship and television broadcast rights, that's where.
Of the 1.5 billion in costs to operate the games, 40 percent will come from broadcast rights paid for by NBC and its enclave of international broadcast partners for the event. Corporate sponsors will account for 39 percent of the Turin games' revenues. As for tickets, they will account for 6 percent of revenues, half of the amount tickets accounted for in the last Winter Olympics, set in Salt Lake City.
These monies are part of major deals signed with the International Olympic Committee, some far in advance of these games. NBC, for instance, paid 3.5 billion for the rights to 5 Olympiads, starting with the 2002 Salt Lake City games and going until the 2010 Vancouver games. 11 other major multinational companies signed similar long-term deals, to the tune of $173 million over the next 2 Olympics. In addition, 4 major Italian companies, including auto manufacturer Fiat, are kicking in 50 million each, with even more coming from other companies providing cash or services to the Turin games.
And yet, even with all of this money flowing in, the budget for the games was still in a $24 million shortfall as recently as late December. Organizers struggled to meet budget, having to seek approval to sell scratch-off lottery tickets to cover some of the costs. Still, some localities around Turin will have to pick up any remaining slack that may remain even after the lottery funds come in.
With the ever increasing pressure for Olympic host countries to outdo their predecessors, the costs of the games are becoming so astronomical, people who see these staggering numbers scratch their heads in wonderment of how so much money can be sunk into the games themselves. While it would seem that countries want to build stadiums, for instance, that could be practical afterwords and not be Olympic only venues, most structures of recent Olympics have become those "white elephants" that organizers want to avoid. One such venue from the 2004 Athens games, for instance, is now used as a weekend flea market - albeit a $400 million dollar flea market.
Do the Olympics need to be such corporate festivals? Does the excess cost really make an Olympiad that much more exciting? And, do you think the mindset for countries to out-do one another will become too uneconomically feasable to support?
