Where Does Olympics Money Go?

[Karl-G]

Just curious. NBC paid $674 million for broadcast rights; admission to events like opening and closing and figure skating and speed skating and hockey (at least) are very expensive; all costs of construction of buildings and roads are borne by host country; room and board are provided to all athletes by host country; volunteers seem to provide all the go-fer work. Where does the money go? Joey Cheek's generous donation provided a glimpse. At least for U.S. athletes (does this apply to all?), winners of medals get $25,000, $15,000 extra. Do all athletes get paid something? Are their traveling expenses paid? Are the traveling expenses of family members paid? The Kwan family must have made plans very late and then returned home immediately; the Hughes family had only a couple of days to make reservations; Plushenko went home to Russia after his competition but flew back for the skating gala; Shaun Miller may also have flown home after his competition and then come back for the final ceremony. Making plane reservations at the last minute is usually a very expensive proposition.

[OneFinger]

Great question and I hope someone knows the answers on athlete benefits. I suspect some travel costs and living expenses are paid by sponsors. But, not everyone had a sponsor (especially if they were a "dark horse" for winning a medal).

 

But I "thought" some of the money goes to the Organizing Committee for the next games. In 2002 when the Olympics were held in Salt Lake City the SLOC (Salt Lake Organizing Committee) had a lot of full-time employees (my guess is 100-150 people). Probably the most visible SLOC employee was Mitt Romney (now Governor of MA).

 

SLOC was in-place and operational 12-18 months BEFORE the actual games. They were the ones to ensure construction was accomplished on time, selection and coordination of volunteers, arrangements for transportation and transportation plans, security, drug testing facilities, selection of judges, coordination of media (including 50-100 individual TV studios and hundreds of satellite link-ups), etc.

 

In addition, about 50 SLOC memebrs remained on staff for about 3 months after the games to tie up loose ends.

 

I'm guessing salaries alone for the Organizing Committee staff would be at least $5M per year. (At 150 employees thats only $33K per year/person.) In addition there is G&A costs for office space, telephones, fax, computers, travel, etc. Some of these services are partially covered by sponsors or are provided at significant discounts.

 

While Salt Lake City did bear some costs, there is no way the city or state could handle everything. I'm positive SLOC received funds from the Olympic Committee.

 

-------------

"We need to have more respect for each other. Things have just gone really crazy, out of control. ... We're on a very weird kind of cycle." Stevie Wonder

[curious2000]

674 million dollars seems like a staggering amount of money for NBC to pay for the broadcast rights,but it seems to be true according to this article:

 

http://www.npr.org/templates/story/story.php?storyId=5232275

 

I don't see how advertisers could make up that amount of money to NBC to make it worth their investment, but maybe they do. The article does not say who the money actually goes to and how its spent, but it's an excellent question. Someone in the Olympic organizaition is getting vastly rich.

[vabballfan]

You have to remember that facilities have to be built (like speed skating ovals, bobsled/luge/skeleton track, ice rinks, ski jumps, etc.) to run the sports, transportation has to be provided, many times roads have to be built to support the increase in traffic, medals have to be minted (and from what I understand, they are not cheap), press facilities usually have to be built, the athletes and workers have to be fed, etc.

 

Security has to be paid for, additional law enforcement expenses, salaries have to be paid, judges probably have to be paid for judged events (at minimum their expenses must be covered) - it all adds up. Many times the city hosting the games loses money on the games and hope that it will be made up by additional tourism revenue and tax revenue received by spectators that attend the games.

 

There isn't as much profit in the whole thing as you might think. Remember, there is a tremendous amount of money spent long before the games including the money spent to bid on the games.

[Guest john1927]

> Someone in the Olympic organizaition is getting vastly rich.>

 

I am sure all the expenses, royalties etc. are honestly laid out in their financial statements. lol

One would hope that the Olympic financial statements are as transparant and honest as those of our gay organizations.

[Karl-G]

You are quite right about all the expenses, but almost none of these are paid by the Olympics Committee, which is why I had the question. The host country/city pays for all the construction of competition sites and new roads, housing for athletes, public transportation, etc. The Olympics Committee and NBC don't contribute anything toward those expenses. In the case of Athens, what was supposed to cost $6 billion apparently cost them $12 billion, which they cannot pay or afford. (One might ask why anyone in their right mind would want to host an Olympics. I think the Los Angeles event was the only one in history to make a profit.) The Olympics Committee (and NBC's money) doesn't pay for any of this. They may pay judges and for medals, but that seems to be about it. They may spend a lot on administration in pre-competition times, but this would be interesting to see laid out. $674 million is a lot of money for planning and organization, sort of sounds like those charities for orphans where 95% of the donations/income goes for administration.

 

NBC announced today that it made a $60 million profit on the Olympics despite a drop of 37% in viewership since Salt Lake; I don't understand these things.