David Owen

I find myself writing this in the last days of a dying decade; so it feels almost obligatory to take a look ahead to what the coming 10 years might bring.

In the field of Olympic finances, it already looks as though significant change is in prospect.

Indeed, the main change I am thinking about might already have happened.

This looks set to be the decade when sponsorship takes over from broadcasting as the Olympic Movement’s biggest source of funding.

I say this because over the past couple of years, the question-marks hovering over the broadcasting rights gold-mine that has enriched "Big Sport" since the 1980s have become increasingly pressing.

At the same time, the appeal of the Olympics as a sponsorship partner for "Big Business", keen to clothe itself with the stardust and wholesomeness of the Games, has never been more evident.

This is not to say that the International Olympic Committee (IOC)’s broadcasting dollars will dry up overnight: it already has a deal covering its most lucrative market - the United States - right through until 2032.

But the days of explosive growth seem to be over.

Television deals are still a lucrative source of income for the Olympic Movement but its growth is set to slow down in the future after years of providing mega-bucks for the IOC ©NBC
Television deals are still a lucrative source of income for the Olympic Movement but its growth is set to slow down in the future after years of providing mega-bucks for the IOC ©NBC

When it comes to sponsorship, by contrast, Tokyo 2020 will obliterate all records.

It was announced last June that the next Summer Games had exceeded $3 billion (£2.3 billion/€2.7 billion) in domestic sponsorship - a stunning figure.

Demand is also strong for membership of the IOC’s worldwide sponsorship programme.

It will be a while before we know for sure, but an IOC insider first hinted to me as long ago as 2015 that, in the most favourable circumstances, this might generate as much as $2 billion (£1.5 billion/€1.8 billion) over the four-year cycle culminating with Tokyo 2020.

This would be up from fractionally more than $1 billion (£760 million/€893 million) in the quadrennium leading up to Rio 2016.

Broadcasting rights for 2017-2020 are expected to produce somewhere in the region of $4.5 billion (£3.5 billion/€4 billion), up from $4.16 billion (£3.15 billion/€3.7 billion) in the Rio 2016 cycle.

So if worldwide sponsorship rights yield more than about $1.5 billion (£1.1 billion/€1.3 billion), then sponsorship will indeed have outstripped broadcasting in the 2017-2020 period, without even taking into account domestic sponsorship from the Pyeongchang 2018 Winter Games.

Whether this pattern will be replicated in 2021-2024 is uncertain.

Tokyo 2020 is set to smash the Olympic record for domestic sponsorship ©Tokyo 2020
Tokyo 2020 is set to smash the Olympic record for domestic sponsorship ©Tokyo 2020

If Chinese demand for domestic sponsorship packages proves anything like as strong as that experienced in Japan, however, then it probably will be.

This impending change in the Movement’s financial model has some potential knock-on effects that bear thinking about.

First, sponsorship funding is only part cash: the rest takes the form of sponsor-produced goods and services - "value-in-kind" in the jargon.

This may be useful for putting on Olympic and Paralympic Games, but is not ideal for redistribution around the International Federations and National Olympic Committees (NOCs) that comprise the sports movement.

 Second, most domestic sponsorship proceeds are just that - domestic.

The money largely remains in the country in which it was generated, helping to fund the apposite Olympic Organising Committee.

Third, if the bonds between the Movement and "Big Business" beyond the broadcasting sphere get stronger, is there a risk that the positive symbiosis in which lies part of sponsorship’s appeal will go into reverse?

In other words, is there a danger that instead of helping multinational industries to become associated with the positive qualities of Olympism, the Olympic Movement might see itself linked to the negative traits of "Big Business"?

There is a danger that the Olympic Movement could harm its reputation even further if it is linked too closely to major international companies ©Coca-Cola
There is a danger that the Olympic Movement could harm its reputation even further if it is linked too closely to major international companies ©Coca-Cola

You might argue that some of the criticism levelled at the Games and the IOC in recent years suggests that something like this is already beginning to happen.

That could obviously be extremely damaging, especially if broadcast income does eventually start to dwindle.

In this context, I wonder if one of the great challenges of the new decade we are embarking on - global warming - might not present both sides, sponsors and sponsored, with an opportunity.

It is becoming increasingly evident that we all need to do more to try to slow the pace at which our planet is heating up.

And there can be no better vehicle for getting this type of message across than one of the few happenings that genuinely attracts the attention of the world, albeit in a disjointed and rather solipsistic way, for two weeks once every four years.

Framing Olympic sponsorships around a green theme, as some already are, might be a relatively effective way of countering the negativity and cynicism of the age.

But it will need to be more than window-dressing.

Olympic projects and the money-making ventures of all sorts of multinational enterprises can be profoundly damaging to the environment if gone about in the wrong way.

Global warming will almost inevitably be a focus of attention in Tokyo, at least until the actual sport gets the better of us, given the sweltering summer weather everyone is likely to have to operate in.

Taking environmental issues seriously - and being seen to do so by appointing a specialist to oversee a new programme - could help negate negative publicity for the Olympic Movement ©Arup
Taking environmental issues seriously - and being seen to do so by appointing a specialist to oversee a new programme - could help negate negative publicity for the Olympic Movement ©Arup

This being so, there may be a case for a "Green Olympic Czar" to be appointed, to offer independent advice, and periodic assessments, on all aspects of the Movement’s activities from an environmental perspective.

Such an appointment would only be worthwhile if it were someone of genuinely international stature and credibility, prepared to speak out when circumstances demanded.

Perhaps it is a role soon-to-depart Bank of England governor Mark Carney might consider as part of his new responsibilities at the United Nations?

Happy New Year - and new decade - to all.