POSTED: April 26th 2011

JOHN GOODBODY: London 2012 set for Olympic gold of its own in TV cash terms

THE JOHN GOODBODY COLUMN / An authoritative and exclusive series from Sports Features Communications

LONDON, Apr 26: The news this week that television income for the 2012 Games has already surpassed that for Beijing by nearly $800m (£500m) will be particularly heartening to the Olympic Movement. Given the recession and the grievous economic situation in many countries, the size of this rise may be seen as unexpected.

However, it shows how there seems no tarnishing of the Olympic brand, no slowing down in interest from television companies as well as from international sponsors, on whose money, the Movement depends.

In 1960, the television income was only about $1.2m (£700,000). Even by Athens in 2004, it was still $1.4bn (£933m).

Most of the big-hitting TV companies have already signed agreements with the International Olympic Committee for 2012 but deals with the remaining five per cent of countries and territories are still outstanding.That figure of $800m (£500m) should still be revised  upwards (For Beijing TV income was $1,739m and for London it has just reached $2,500m from 95 percent of territories and countries).

This increased money will not benefit directly the London organisers (LOCOG) because, together with the other candidate cities for 2012, it knew even before it got the Games in 2005, what share of the finance from television and sponsorship (the Top programme) it would get. It is about £700m ($1,120m) and the money has been flowing through to the Organising Committee on a regular basis ever since.

However, this week will give London a clearer idea whether it will make a profit from hosting the 2012 Olympics. The first and most significant round of ticket sales will close at mid-night on April 26 and LOCOG will then be able to judge whether its estimated break-even target of £2 billion ($3.2 billion) may be reached or even hopefully exceeded.

Two important areas of income are already known. The first is the £700m ($1,120m) from those television fees and international sponsorship. The second major area of income for LOCOG is domestic sponsorship and this has almost reached the target of £700m ($1,120m) and there is still 15 months before the Games open.

This figure, however, is not expected to rise much because most companies have already decided their budgets for the current financial year. They are, therefore, less likely to take out new sponsorships before the Games, although it remains possible. The target for London is to beat Beijing in 2008, when it was £761m ($1,218m).

Merchandising and licensing

The two unknown incomes are merchanding and licensing, making up probably at least £100m ($160m), and secondly ticketing, where anything more than £500m ($800m) may well give London a surplus on staging the Games.

Of course, London will not really make a profit on the Games, even if these targets are met because it does not take into account such massive expenditure as the building of facilities and the renovation of such a huge swathe of East London, for which the budget, now unlikely to be exceeded, is a separate £9.3bn.

The only Olympics ever to make a profit on this basis of including everything was Los Angeles in 1984, with $250m (£156m) .This was achieved by spreading the Games over 100 miles, using existing facilities such as the Coliseum for athletics and University campuses for the Olympic Village and relying on sponsors to build some new venues, such as the pool and cycling track.

However, as LOCOG scrutinises the figures for ticketing this week, it can console itself not only how well it has done so far but also how no city will probably ever again be able to duplicate what Los Angeles did.

Television income may have risen since 1984 but so has the expectations for facilities by the world of sport, the increased need for security and, above all,  the strategy of using the catalyst of the Games to renovate cities.

** JOHN GOODBODY covered the 2008 Olympics for The Sunday Times, his 11th successive Summer Games and is the author of the audio book A History of the Olympics, read by Barry Davies, the BBC commentator. He was Sports News Correspondent of The Times 1986-2007, for whom he received journalistic awards in all three decades on the paper, including Sports Reporter of The Year in 2001

Keywords · John Goodbody · Olympic TV income · LOCOG · London 2012 · IOC

For more information contact:
Laura Walden ()

All original materials contained in this section are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Sports Features Communications, Inc the owner of that content. It is prohibited to alter or remove any trademark, copyright or other notice from copies of the content.