Gene Sykes, chairman of the United States Olympic & Paralympic Committee, said Thursday in public what everyone who is anyone in U.S. and worldwide Olympic leadership has been saying quietly in private: the financial models that have sustained the movement since 1984 need to be reimagined.
Like, now. If not sooner.
Gene Sykes earlier this summer at another of his many top-level commitments — readying for golf’s men’s U.S. Open at the LA Country Club // Getty Images
Speaking at the USOPC’s annual assembly at the Intercontinental Hotel in downtown Los Angeles, Sykes said, “To succeed, we need to expand the commercial success of our movement while uplifting its commitment to its values. The challenges and opportunities are unprecedented. So many of the longstanding foundations of our movement are shifting.
“We need to reinvent our business models, redefine our paths to success and rekindle the unique appeal of this movement with a new generation of fans. Sports have never been more popular, and fans want to experience them in new ways – more personal, more intense and more active.
“Passive consumption,” he said, “no longer works.”
Sykes’ remarks, roughly a year before the Paris 2024 Games, though delivered to a decidedly domestic audience, mark nothing less than a worldwide call to action.
For better or worse, the USOPC arguably remains the world’s most influential national Olympic committee. U.S. television – that is, NBC’s $7.65 billion deal through 2032 – drives International Olympic Committee revenues.
A historical touch deserves mention here. It was six years ago almost to the day — Sept. 13, 2017 — that Los Angeles, with Sykes as bid chief executive officer, got the 2028 Games in a double allocation with Paris, which was awarded 2024. Sykes, co-chair of global M&A at Goldman Sachs, thereafter stepped away from the Olympic scene but is now back as USOPC chair.
Will it now be the case that, in the spirit of Peter Ueberroth, also the keenest of business minds, Sykes’ Sept. 14, 2023, keynote USOPC address sparks the next major forward existential commercial leap in the 129-year history of the Olympic movement?
Something has to move. Because the issues for the IOC, and its many affiliated entities, including the USOPC, are fundamental. All the same, Sykes’ address and the many related conversations at Thursday’s USOPC assembly underscored just how difficult the challenges ahead – finding ways to make the revenue needed to underpin editions of the Games, and the years in between – will be.
At the 1984 Los Angeles Games, Ueberroth revolutionized the way the Olympics could be financed. How? With a multimillion-dollar television deal, then with ABC, and with the notion of exclusive corporate sponsorships. Those Games turned a $232.5 million surplus. And the boom was on.
Now, though, after a reported $51 billion Games in Sochi in 2014 that altered (read: significantly scared away) western-nation taxpayer interest in the Games and three consecutive Olympics in Asia (2018, 2020/1 and 2022) that significantly depressed viewership, and despite IOC president Thomas Bach’s considerable – and in some ways, successful – reform efforts to trim Games-related costs, the movement finds itself at a critical juncture.
An array of uncertainties
The next IOC president is due to be elected in March 2025. He (or she) will be staring at an array of uncertainties:
The television landscape is changing quickly, cable giving way to streaming. Streaming, though, does not – at least yet – produce anywhere near the revenue necessary to support the likes of a $7.65 billion contract.
Fundamentally, the product the IOC has been presenting – and, in the United States, NBC has been showing – is measurably proving not that interesting. How many teenagers are freaking on Instagram to watch canoe-kayak? Or thinking, I know, I’m going to become a mega-influencer — I’m going to hype dressage?! Or, and especially in a country where, as of Sept. 13, according to the Gun Violence Archive, there have been nearly 500 “mass shootings,” tuning in to a 25-meter rapid-fire pistol shooting contest? How are teens, so many already cowering in schools, supposed to find that “fun”?
Sponsors are pulling back. Olympic insiders note with concern if not alarm that four top-level worldwide IOC corporate backers are expected to say no mas after the 2024 Games – those four bringing a combined estimated $1.3 billion in revenue.
Sykes had a bad fall at the track and field championships in Budapest a few weeks ago. Nonetheless, what he had to say Thursday was so important that, making it to the lectern on crutches, he said, “The changing habits of consumers demand a fresh perspective on our traditional marketing approaches. This impacts how we engage with commercial partners today, and what kind of marketing and promotional relationships will serve the best interests of all parties tomorrow.
“Once again, our partners want us to change.”
In London in 2012, global viewership amounted to 3.5 billion, the IOC has said. In Tokyo in 2021, 3 billion. Those are big numbers, to be sure. But down some 14% over nine years.
Here in the United States?
In Tokyo, and of course those were Covid Games with no fans and other challenges, NBC has said those Olympics averaged 15.5 million primetime viewers on the network itself and digital platforms including the Peacock streaming service. That, as Reuters reported as the Tokyo Games were wrapping up, marked the smallest audience for the Summer Olympics since NBC began broadcasting them in Seoul in 1988.
Compare, and given time zones and other variables apples to apples is necessarily imperfect, but: 26.7 million for Rio in 2016, 31.1 million for London 2012.
It’s not terribly difficult to do rough math, to see 15.5 against 31.1. That’s half. In nine years.
Sarah Hirshland, the USOPC’s chief executive, said in a separate session at Thursday’s assembly, “What used to be appointment viewing for families – you still talk to people all the time and say, ‘My family got together and watched the Olympics, right?’ We know that world is not the world of today.”
She added a moment later, “I think my son experienced the last Games probably entirely on TikTok.” The challenge of course is basic – how to monetize a Games-watching experience on TikTok when NBC is paying $7.65 billion?
‘Consumption and engagement is different now’
“We just have to recognize and acknowledge that the consumption and engagement is different now,” Hirshland said in her comments on stage. “It’s an active two-way conversation for a lot of people, and we have to embrace people co-creating that experience a little bit and allowing them to be part of telling the story through their own lens and through their own voices.
“Social media has given everyone a platform and everybody a voice, and we have to embrace that and allow people to share their experience with the Games and to share their story and to share the way they want to experience the Games, while at the same time recognizing that the anchor of driving the economics of the Olympic movement still sits in NBC’s broadcast rights and there is still an extraordinary amount of incredible storytelling happening. NBC introduces us to the characters we fall in love with. And that’s a wonderful thing. “
Wonderful, maybe. But, again – how to make money, the necessary millions if not billions, from engagement on social media?
You’re going to ask a teenager or 20-something to pay to engage on TikTok with the Games? On Instagram? That’s about as likely as me getting a date way back when at Northmont High School in Clayton, Ohio. (For the record: did not happen. So, yeah.)
This is my 13th year teaching journalism at the University of Southern California. Every year, I ask the young people how many of them are paying for cable television. Not leeching off their parents or sharing passwords with some number of other people. Themselves paying the bill? The answer is almost always zero. OK, maybe one, someone who wants to indulge in NFL Red Zone. So here is the clear dilemma: you’re now thinking you’re going to get this target demographic, college kids, who won’t even pony up for the NFL or college football, to pay to watch the Olympics?
Like, how? Under what theory?
Li Li Leung, chief executive of USA Gymnastics, said the federation is “beta testing” with NBC a “few different things” to give the network more behind-scenes access, “new tactics to be able to story-tell, to be able to provide people with a lot more insight into what’s happening with the sport so they can understand it better as well.”
All good. But, once more – where’s the money in that?
Just to complicate all this: if you’re gymnastics supernova Simone Biles, swimming golden girl Katie Ledecky or track sensations Noah Lyles and Sha’Carri Richardson, to name just a few, don’t you have a keen (and obvious) interest in monetizing all you can for yourself rather than giving over your name, image and likeness to – anyone else? Especially on social media?
It’s 2023, and soon enough 2024. Not 1984.
No easy answers. Certainly, no granular solutions came forward at Thursday’s assembly.
For his part, Sykes said the U.S. Olympic & Paralympic Foundation has launched a $500-million capital campaign. It’s aimed, he said, at “enhancing the resources” the USOPC provides in “athlete health and wellness.”
Can the USOPC foundation raise that kind of money? A national championship-caliber college football program, sure. The American Olympic and Paralympic team? Never been done.
Upside – there will be Games in Los Angeles in 2028 and in Salt Lake City, probably in 2034.
“I cannot overstate the importance of the U.S. hosting two Olympic and Paralympic Games in one decade,” Sykes said in his address. “This gives us the opportunity to enhance our connection with the American public and also to expand our influence and voice in international sports.
“… We have a renewed emphasis on international partnership,” he said. “We must be part of the most important decisions. While always keeping Team USA’s best interests at the forefront.”
He also said, referring to the USOPC, “We need to share our experiences with humility and honesty. These are objectives we can achieve, and I can tell you with conviction: the rest of the world wants us to lead.”