Smith Brain Trust / February 3, 2022

Pandemic Protocols and Diplomatic Boycotts: Can the Olympics Survive?

Pandemic Protocols and Diplomatic Boycotts: Can the Olympics Survive?

On-site spectators will be missing Friday as athletes parade in Beijing for the XXIV Olympic Winter Games opening ceremonies. There will be pandemic-inspired protocols in place, extending through the competitions – similar to the ones adopted at the most recent Summer Games in Tokyo. And there's a diplomatic boycott in place as well, with the United States, Britain, Canada and Australia opting not to send government officials to the Games, in a show of protest against human rights violations in China. (Athletes from those countries will still compete.)

Those empty stands may call to mind the end of the most recent Summer Games, when The Atlantic asked “Is it time to end the Olympics?”

Critics at the time cited a nexus of public health (Tokyo COVID-19 cases spiked during the summer games), economics and politics. Some decried the modern Olympics as an international spectacle synonymous with overspending, corruption and autocracy.

But end the games?

“Perish the thought,” says Henry C. Boyd III, clinical professor of marketing at the University of Maryland’s Robert H. Smith School of Business. “The Olympics remains the galvanizing force that promotes world peace through shared appreciation of true athleticism.”

Boyd, who previously described how marketers nimbly adjusted their promotional campaigns to the pandemic-tinged summer games, adds: “Since its debut in 1896, the games have thrilled fans and allowed host nations to burnish their global reputations. Essentially, through the efforts of the International Olympic Committee (IOC) and host nations, succeeding generations have waited eagerly every four years to see the best in human competition.”

Boyd’s faculty colleague Roland Rust concurs, saying the Olympic brand is – and will remain – sustainable in the face of such acrimony as long as it is athlete-centric. “From the athletes' perspective, the Olympics remain the most important world competition in many sports, and given the short competitive lifespan of a top athlete, it would be devastating to those athletes to remove the Olympics from the competitive schedule,” says Rust, Distinguished University Professor and the David Bruce Smith Chair in Marketing.

Boycotts, “although politically tempting, do little to dissuade autocratic hosts – for example, Germany in 1936, and Russia in 1980 – but do lasting damage to the athletes who can't compete,” adds Rust, who leads the PR DC Elite running team, which trains Olympics hopefuls. “From a marketing standpoint, even the would-be boycotters may benefit, as can be seen from the positive publicity from the Jesse Owens victories that embarrassed Hitler in Berlin in 1936."

Fixing the Business Model

One, nonetheless, would be remiss to take on the position that the Olympic business model is above reproach, says Boyd. “Over the last five years, using the unbiased lens of forensic accounting, numerous studies have clearly shown that hosting makes no sense if a nation is driven solely by the profit motive.”

“Truth be told, on a repeated basis the Olympics is a money loser, and the host nation is often left holding the bag,” Boyd says. He notes a disturbing trend in recent host cities.

Tokyo 2020’s projected costs were $7.4 billion, but the actual costs were $25 billion. In Rio 2016, the projected costs were $14 billion, compared to the actual $20 billion costs. In London 2012, the projected $5 billion price tag was well shy of the actual $18 billion. Beijing 2008’s projected $20 billion costs also fell considerably short of the actual $45 billion costs.

Hosting the Olympics is an expensive proposition for any nation. “The necessary requirements of building sports venues, Olympic village to house athletes, and transportation infrastructure are prone to massive cost overruns,” he says. “Plus, the ability to make any profit is easily undermined by the shifting portion of television rights that flow to the IOC. For instance, in the 1990s, the IOC pulled in 4% of broadcast media revenue whereas in 2016, it retained 70% of this coveted revenue stream.”

Boyd says the “outdated business model” is in drastic need of overhaul. And IOC President Thomas Bach has “a sterling idea,” says Boyd, establishing permanent host cities to defray costs.

But end the Olympics? Boyd says, “Not at all.

“Structural change is certainly warranted to ensure the games’ survival. Perhaps Winston Churchill put it best when he observed, ‘To improve is to change. To perfect is to change often.’”

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