Ian Blunt and Beth Lawrence outline some key events in the history of the International Olympic Committee (IOC) and explain how it operates as a global brand and generates and uses its funds.
Bread and Circuses
Bread and circuses were mainstays of the domestic politics of ancient Rome: keep down the price of food and put on a good show and the masses would be happy and the emperor would have a decent chance of not being overthrown or assassinated.
The biggest of the modern global circuses do not function in exactly the same way as their Roman forebears. A deal to host a ‘mega-event’ like the Olympics or the football World Cup can bring a certain political kudos to the government concerned, but they are more concerned with profiting from, rather than placating, the masses.
There can be negative side-effects of course: a public and international spotlight on domestic social inequality, lack of democracy and so on. Commenting on the most recent World Cup, Patrick Bond, director of South Africa’s Centre for Civil Society, which ran a World Cup Watch project, said: “The elite have pulled off bread and circuses for the masses. We live in one of the most unequal societies in the world, and we’ve just seen an amplification of that inequality. The costs will become increasingly clear.” There has already been no shortage of criticism of the social and economic effects of the London Olympics, but the hope for the organisers is that the blaze of publicity once the event starts will offset such negative criticisms. Sports reporters are, after all, paid to focus on sporting records rather than human rights.
The ringmaster of the modern Olympics circus is the International Olympic Committee (IOC), which moves from city to city, imposing its demands and ensuring its members are never short of canapés or red carpets. However, while the IOC is never shy about espousing respect, excellence, friendship and so on, its history of organising the Games stands in stark contrast to the rhetoric of the official Olympic values. As C.A. Shaw, author of Five Ring Circus: Myths and Realities of the Olympic Games, says:
‘Were they ever a democratic, egalitarian organisation promoting sports for the masses? Well, no. Of nine actual or acting presidents, the IOC had put three barons, two counts, two businessmen, an overt fascist and a fascist sympathiser in its top job. With leaders like this, are the outcomes surprising?’
Some history of the IOC
A brief overview of the IOC’s management of the Olympics shows what these outcomes were:
1894 – The IOC is founded. Working class people and women excluded from the first ‘official’ modern Olympics in Athens in 1886. ‘Workers’ Olympics’ held in 1925 in opposition to the official Olympics for a number of years, in response to this exclusion.
1936 – The Berlin Games saw IOC members openly supporting fascism, enabling the Games to be a huge propaganda victory for the Nazi regime. These values continued to shape the IOC for many years, with openly repressive regimes being allowed to compete in the Games. Berlin also saw a huge effort to ‘clean up’ the streets of all ‘undesirables’ – mainly Gypsies and political enemies – who were preemptively arrested and put in detention. Hitler also used the event to install an early form of CCTV surveillance.
1968 – The Mexico City Games showed the full extent of the IOC’s hypocrisy: claiming to have progressive values while enabling widespread racism, repression and militarism. Days before the Games, the Mexican police and army killed as many as 500 student protesters in the Tlatelolco massacre. The protests were partly against the Games, due to the amount of money being spent on them while the poor in Mexico were being neglected. The IOC refused to let the massacre ‘politicise’ the Games, but the expulsion of medal winners Carlos and Smith for their black power and solidarity salutes shows the mechanics of the running of the Games trumped every other concern, social or ethical”.
1976 – The Montreal Games only attracted a very small domestic sponsorship ($7m) compared to the debt generated ($1.5bn), which took 30 years to pay off. From then on, the IOC’s funding model changed from many small national sponsors to fewer, larger international sponsors.
1978 – Richard Pound was elected to the IOC and transformed the so-called ‘Olympic movement’, better described as the Olympic industry, by striking huge sponsorship deals with multinationals, such as Coca-Cola, Kodak, McDonalds and Visa and arranging TV sponsorship deals. From then on, the Games became a multi billion dollar enterprise, spreading corporate power and imagery throughout the world.
Since the 1980s, it has been estimated the Games have displaced over three million people and contributed to massive increases in homelessness, such as in Vancouver. This has contributed significantly to gentrification, securitisation and surveillance in the host cities.
Late 1990s – corruption nearly destroyed the IOC and many people were expelled. For example, in 1999 there was widespread bribery going on in the IOC regarding the decision to give the 2002 Winter Games to Salt Lake City. An investigation lead to ten IOC members being expelled or resigning. Since this period of scandals that nearly brought down the IOC, it has improved its PR, but any issues that do arrise are pretty much left unchecked by the mainstream press.
2008 – The Beijing Games saw displacement on a massive scale and a pre-Olympics systematic round-up of political activists, involving imprisoning, beating and torturing dissenters, showing that the Games continue to facilitate and reinforce repression wherever they go, yet the IOC still pretends to be apolitical.
2012 – The London Games have seen pre-emptive arrests and evictions across London and protests being held in July against, amongst other issues, the failure of the IOC to take action against the discrimination of women athletes, corporate sponsorship, mass surveillance and the restriction of the right to protest that the Host City Contract enforces.
The IOC’s revenue streams
The main reason the IOC is thriving in the modern world is because it can sell television rights, among the world’s most sought-after commodities, on a scale that promises a massive audience for the advertising space that can be attached to the televising of the event. The Olympic Games is in effect the biggest billboard in the universe.
Television companies are thus the IOC’s biggest customers. The Vancouver Sun reported in 2007: “Television rights, according to figures released by the IOC, will generate more than $1bn US dollars from the 2010 [Winter] Olympics alone, and some $3.8bn in total between Vancouver and the 2012 London Games.” The National Broadcasting Corporation of America (NBC) alone paid $2bn for the US broadcasting rights to the 2010 Vancouver Winter Olympics and 2012 London Games.
The IOC earns more than half (53%) of its income from selling television rights with around 30% coming from sponsorships and partnerships, 10% from ticketing and the rest from direct marketing and/or licensing of products. It also gains the large fees paid by candidate cities at each stage of the bid process, which amounts to $14m for each four year period.
Overall the IOC makes around $750m a year, which is a low-end estimation. It is not possible to gain a more accurate figure, because information about the IOC and its revenue is not publicly accessible. The IOC claim it only gets 8% of this total, with the rest going to the National Organising Committees and other organisations involved in the Games, but there is no independent auditing to prove this percentage. This means it makes a minimum of $60m, which does not include their own revenues from the sale of Olympic products.
So what does the IOC do with its vast profits? Pay local taxes? No! It does not pay taxes anywhere. The Host City Contract ensures it does not have to pay tax on any aspect of the Games or Games-related profits. In many countries, such official tax exemption usually only applies to charities, non-profits and religious organisations. The IOC’s illusive status as neither a corporation as such nor a state institution, or indeed any other known category of organisation, means it manages to operate in a way that enables vast profits with few formal responsibilities.
Pay its employees well? No! Many people who work for the IOC do not benefit from the vast profits and people volunteer to work at the Olympics in huge numbers. Only the people at the top see the money.
Invest in progressive projects relating to the official Olympic values, such as ethics in sports? No! The IOC works towards the values in the Olympic Charter relating to its own protection and preservation, but only plays lip service to its other supposed values, such as promoting a peaceful society concerned with the preservation of human dignity.
Spend it on champagne and other luxuries? Yes!
As the Olympics start, the UK’s recession appears worse than predicted, with UK outputs at 4.5% lower than it was when the economy peaked in early 2008. Whether the Olympics will exacerbate this remains to be seen, with London boroughs coughing up thousands, including for the installation of new CCTV cameras, for the privilege of hosting one of the events while council budget cuts continue to take effect. In light of this it is heartening to know that resistance to and criticism of the Olympics in London has been widespread, with many community groups joining forces to get their voices heard, in the absence of any possibility of democratic representation. Corporate Watch will be following this article up with an overview of resistance from before the bid process to events during the Games and a comparison of resistance in the UK with that in other countries. This will contribute to the International Counter Olympics Network (ICON), which was launched in London the day before the Olympics started.
 C.A. Shaw, Five Ring Circus: Myths and Realities of the Olympic Games (Canada: New Society Publishers, 2008)
 Ibid. p.67
 This section is mostly taken from Five Ring Circus
 Ibid. p.63
 Ibid. p.66
 Figures from the period 2001-2004, see p.69-87 of Five Ring Circus: Myths and Realities of the Olympic Games for more detail