3Qs: The business of the Olympics

The Olympics is not just another ath­letic com­pe­ti­tion on the inter­na­tional stage —  it‘s also a busi­ness that has become increas­ingly com­mer­cial­ized over the last sev­eral years. We got a first-​​hand account of the busi­ness of the Olympics from Rosanna Garcia, an asso­ciate pro­fessor of mar­keting in the Col­lege of Business Admin­is­tra­tion, who was in London for this year’s Summer Games. We asked her how the cur­rent state of spon­sor­ships and ticket sales impacts the spirit and expe­ri­ence of the Olympics, and here’s what she said.

Rosanna Garcia, an associate professor of marketing who has attended the summer Olympics since 1984, explains how the Games have changed over the last two decades. Photo by istockphoto.

You have attended every Summer Olympics since 1984. What are some of the biggest changes that have been made to the Games over the last two decades?

The biggest change I’ve seen over the years is that the Olympics have very obviously become increasingly commercial with corporate sponsors taking a more visual role at each subsequent Olympics.

This year, Proctor & Gamble was a major sponsor. Many Americans probably saw its commercial honoring mothers of Olympic athletes. As part of that marketing campaign, a P&G House was set up in London where athletes and their families could go to relax, watch the games and even get a manicure or haircut. A focus on the family instead of just the athlete is a new twist.

The 2012 Olympics is also being called the Women’s Olympics because this was the very first Olympics in which every country included at least one female athlete. And for the first time in history, the U.S. women outnumbered and out-medaled the men. This will be a boost for women’s sports worldwide.

One thing I continue to enjoy about the Olympics is how it tells a modern-day story of world events, including women empowerment, sustainability and family values, all in the spirit of athleticism.

Did you notice any new trends in terms of corporate sponsorship or commercialization of the Olympics?

I witnessed a big push for sustainability. The London Olympic committee promoted the 2012 Olympics as being “zero waste.” BP, the oil company, had a campaign that encouraged travelers to sign up to be “target neutral” where BP would pay for the carbon offset of their travels.

Another sponsor, Dow Chemical, was an important partner in building a sustainable infrastructure with Dow materials in the Olympic stadium. Dow also reportedly spent $100 million to be a sponsor. Some say these sponsorships are “sin washing” after the BP oil spill and the Dow Bhopal chemical leak. To be sure, this type of co-branding with the Olympics can certainly build goodwill.

Olympic merchandise is even influenced by sponsorships: Visa was a big corporate sponsor and was the only card accepted at the Olympics. The only reason I have a Visa card is so I could  buy souvenirs. My collection of more than 300 Olympic pins includes many corporate pins. The Day 8 pin of the Summer Olympics was sponsored by Coca Cola and became popular because it was the day the UK won its most gold medals.

How did the attendance at the London Games compare to that of past Summer Games? Were tickets in high demand?

This may have been the most well-attended Olympics in history. An estimated six million people attended the Games, compared to roughly three million in Beijing. Many people complained of unavailability of tickets, but there were many empty seats at nearly every event.

This dichotomy could mean that more people are attending the Olympics, but it could also be a result of prosecution of scalpers or “touts,” as they are called in the UK.

Previous Olympics have allowed a secondary market, where individuals sold tickets on the street to each other, or ticket offices were set up around town to return unused tickets. If your country’s team didn’t make it to the finals, you could sell the ticket to another person whose team did.

This no longer is allowed to happen, so the so-called “black” markets pop up. People pay many more times the face value of a ticket on services like eBay because it is the only way to get certain tickets. When this secondary market is practically nonexistent, prices increase as officials repress supply.

If the spirit of the games is to be taken into consideration, it is my opinion that the resale market should be allowed to thrive on its own, especially with individual-to-individual sales. This puts more tickets into the market, lowers prices, fills the stadiums and delivers a better Olympic experience for all. Ticket revenue sales directly to the International Olympic Committee would likely increase if people knew they could easily resell the ticket if they couldn’t attend an event. The IOC needs to look at this issue from both a marketing and economic perspective for future games.

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