to the world in a way they've never experienced before.

(dramatic music)

We will host the world.

- [Narrator] These brands paid

hundreds of millions of dollars

to be associated with the Olympics.

And all this money goes

to the International Olympic Committee or the IOC,

which runs all the marketing programs for the Olympic Games.

But it takes more than marketing.

The IOC powers one of the most valuable sporting events

in the world through media deals.

- The International Olympic Committee

has tried to monetize these games

since the very first Olympics back in Greece in 1896.

And they've evolved every time

to get more TV broadcasters, for instance,

and other sponsors.

- [Narrator] So how does the IOC generate

billions of dollars in revenue from these rights?

And what do companies get in return?

This is The Economics of The Olympics.

The IOC generates billions in revenue

through the sale of broadcast and sponsorship rights.

It made a total of about $4 billion

from the 2006 and 2008 games,

over $5 billion from 2010 and 2012,

and almost $6 billion from the 2014 and 2016 games.

In comparison, FIFA, which runs the World Cup

made about $4 billion from the sale of television rights

and marketing rights for the 2014 World Cup.

In London in 1948, the IOC awarded broadcast rights

for the first time to the BBC.

Today, the sale of broadcast rights makes up nearly 75%

of the IOC's total income.

This year, the Beijing Olympics is being broadcast

in more than 220 countries.

China Media Group is airing the games in China.

Discovery is airing it across Europe,

and CBC is airing it in Canada.

Since 1997, North American companies have paid more

for broadcast rights than the rest of the world combined,

according to IOC data.

NBC has televised every Olympics since 2000

and every Summer Games since 1988.

- I've come to associate NBC

as being the channel of the Olympics,

and I'm sure many other Americans do so as well.

- [Narrator] In 2014, NBC entered into a $7.75 billion deal

to secure exclusive broadcast rights in the US through 2032.

That means the company will pay an average

of over $1 billion for each Olympics.

The deal covers all media platforms, including TV,

internet, and mobile rights,

and also restricts other media from broadcasting

the opening and closing ceremonies

and athletic competitions.

- When it comes down to getting these broadcasting rights,

it comes down to one thing which is money.

- [Narrator] These multi-year broadcast deals

include both Summer and Winter Olympics.

For example, NBCUniversal made

about half a billion dollars more in revenue

from the 2016 Summer Olympics

than it did from the 2014 Winter Olympics,

according to the company's financial statements.

- The Summer Games are a lot bigger

than the Winter Olympics.

There's about 200 countries

that compete in the Summer Games,

about only 100 in the Winter Games.

There's a quarter of the athletes in the Winter Olympics

compared with the Summer ones.

- [Narrator] After broadcasting rights,

brand partnerships are the next income driver for the IOC.

The Olympic Partner Program, which was launched in 1985,

grants exclusive marketing rights

to a select group of corporate sponsors.

There are currently 13 top tier sponsors in this program.

- So you have companies like Coca-Cola, been around forever.

♪ So give me a Coke with a smile ♪

♪ And I promise ♪

♪ To pass it along ♪

- But you also now have tech companies

like Airbnb and Alibaba in China who have signed up

in the past decade for these multi-year deals

to be one of the elite sponsors.

- [Ad Voiceover] Alibaba believes in the power of small.

We are proud to be the worldwide partner

of the Olympic Games.

- [Narrator] According to the latest IOC data,

top tier sponsors collectively paid around $1 billion

for the 2014 and 2016 Olympics.

So what do these brands get in return?

- They get to use the Olympic logo

so the iconic rings, the five interlaced rings

are probably the best example,

but also there's an official logo

for the Beijing Games and the Tokyo Games,

and all that, too.

- [Narrator] But buying sponsorship rights

is just the first step.

- They spend a lot of money,

tens of millions of dollars per Olympics

just to get the rights to use these Olympic logos.

And then they gotta spend even more money,

maybe triple that, to tell everybody

that they have these rights via TV advertising that say,

"Hey, look, we're helping to put up these feel good games

that brings the world together."

Or if you're Coca-Cola, they might want an athlete

to go around drinking a Coke at the Olympics.

And it also costs money just to put the rings

on a can or a bottle of Coke.

- [Narrator] These brand partnerships are multi-year deals,

often spanning four or five Olympics,

which means the IOC doesn't have to scramble

to find a new sponsor every two years.

- Airbnb just a couple of years ago, signed a 10-year deal.

So that'll take them

through the 2028 Olympics in Los Angeles.

- [Narrator] This year, several Olympics sponsors

are keeping a relatively low profile

around the Winter Games in Beijing

due to escalating tensions between the US and China.

- In a normal Olympic year, these companies

that already spent a lot of money

to be a top Olympic sponsor

would be normally be bragging about it.

The 100-day countdown is usually a big thing.

- [Narrator] For example, ahead of the 2018 Games,

Coca-Cola put figure skating star Nathan Chen

on a billboard in Times Square

to mark the 100-day countdown to the games.

And Visa, which sponsors athletes

through its Team Visa program tweeted about its athletes

and promoted its wearable payment devices

in the weeks leading up to the 2018 Games.

- [Ad Voiceover] You dream of amazing.

We dream of amazing ways to pay.

- [Narrator] Companies make million dollar investments

in these sponsorship deals.

But this year, sponsors may risk

missing global marketing opportunities

that money bought them.

US officials, some Western lawmakers,

and human rights activists have said

Beijing's years long campaign

a forcible assimilation against the mostly Muslim minorities

in Xinjiang amounts to a form of genocide.

Beijing denies the allegation and has protested

what it calls attempts to politicize the games.

- These top tier Olympic sponsors

are trying to balance their business in China on one hand

with their reputation in the rest of the world on the other.

And they think the smartest thing to do right now

is to just not bring any attention

to the fact that they're sponsors outside of China.

- [Narrator] Coca-Cola, for example, hasn't done

any major advertising campaigns related to the Olympics,

except in China, according to a company spokesman.

He declined to say why the company made that decision.

Visa and NBC didn't respond to requests for comment.

The IOC says it recognizes and upholds human rights,

but it takes no position on the political structure,

social circumstances, or human rights standards

in the host country.

The committee says it must remain neutral

on all global political issues.

Looking ahead, NBC is promoting

its streaming service, Peacock,

especially as more and more people ditch cable,

and TV ratings for the Olympics

continue on a downward trend.

In January, Comcast said over 9 million people

were paying to watch Peacock.

The company said it would spend $3 billion this year

on content for Peacock, double what it spent last year.

The Beijing Olympics are an important opportunity

for Peacock, which has been called out by analysts

as being slow to gain traction.

Viewers have also complained

that Peacock didn't have enough live coverage

during the Tokyo Summer Games.

This time around, NBCUniversal said

the entirety of its Olympic broadcast

would be available live on Peacock's premium tiers

for the Beijing Games.

- Next step will be to see

whether these online broadcasting services like Peacock

are gonna become a bigger part

of Olympic deals in the future.

(bright music)