How Much Money Do The Olympics Make? In 2018, Empty Stands Aren’t Actually The Issue
Organizers have worried that the sometimes under-filled stadiums in South Korea at the 2018 PyeongChang Winter Games could be a bad sign for the financial health of the games, given that ticket sales make up a portion of the revenue stream. But income sources for the Olympics — and any potential profit — are much more complicated. How much money the Olympics makes depends on a lot, and the amount varies widely for host cities, the International Olympic Committee (IOC), and the athletes competing at the games.
Economic papers have shown that for the host cities, the Olympics make little financial sense. Construction costs and necessary infrastructure improvements in roads, train lines, and airports send budgets soaring, especially in regions and countries that are not well developed.
The money that is made on the games comes from a few different sources. The biggest is television broadcasting rights. The U.S. broadcasting rights from 2021 to 2032 were sold to NBCUniversal. They paid the International Olympic Committee $7.65 billion, for example.
If we look at the years 2009 to 2012, the Council on Foreign Relations estimated that the games had revenue of $8.05 billion. That time period would include the 2010 Vancouver Winter Games and the 2012 London Summer Games. Summer games tend to make more money as they draw more international tourists. Of the $8.05, $5.2 billion was from the London games.
Of that $8.05 billion, the biggest source was TV rights at $3.85 billion. Next was domestic sponsorships at $1.84 billion. Ticket sales came third at $1.24 billion. Another $950 million was from international sponsorships, and $170 million from licensing.
This is why ticket sales are not of concern to everyone benefiting from the Olympics. Scott Minto, director of the sports business management program at San Diego State, told The Los Angeles Times that the people in the stands aren't so vital. "It would be nice to have all these cowbells clanging as skiers go down the hill," he told the paper. "But from a business sense, these games could be on the moon and people would still tune in."
The tricky part is how the revenue is split up. Much of the money made from things like the broadcasting rights don't go to the host city. It's split between the IOC, sports federations, and national Olympic committees. Even if the organizers of the games declare there was a profit, like in Sochi in 2014 (organizers said they made $53 million), that doesn't take into account all the investments made for the games.
In South Korea, nearly $13 billion was estimated to have been spent in preparation for the games, and upkeep of structures and facilities will cost money for decades to come. Even if they brought in, say, 5 billion dollars — and all of it went to the host — that would still fall far short of covering costs. In the past, the IOC has stepped in to cover deficits, but that's not guaranteed.
The IOC does quite well financially, more than covering their expenditures despite passing on the vast majority — 90 percent — of Olympics revenue.
In addition to the hosts and the IOC, the other group to take into consideration are the athletes themselves. Some will make money from winning an Olympic medal. For Team USA in 2018, the gold will net $37,500, the silver $22,500, and $15,000 for bronze. That's tax free if the athlete's total income is under $1 million.
Any other money that the athletes make is from sponsorships or from grants given by their sports federation or national Olympic committee. Some athletes even have to get part-time jobs to fund their Olympic dreams.
There's lots of money wrapped up in the games, but not everyone's getting rich.