Television, sponsorship revenue could top $800 million

CBS SportsLine wire reports
Feb. 3, 1998

NAGANO, Japan -- Many people were skeptical when Olympic leaders decided to break the traditional four-year cycle and hold the Winter and Summer Games in separate years.

But the gamble has paid off, literally, in hundreds of millions of dollars.

Olympic officials say the Nagano Games have generated a record windfall of marketing revenue -- three times greater than Lillehammer produced in 1994.

Lillehammer was the first Winter Olympics held in a different year from the Summer Olympics. The intention was to give a more distinct identity to the winter event, which had been overshadowed for so long by the summer spectacle.

LILLEHAMMER WAS A HUGE success in all respects, but Olympic officials never expected Nagano would bring in so much money -- more than $800 million in television and sponsorship revenue.

"Lillehammer launched the new era of the Winter Games," said Dick Pound, the International Olympic Committee's chief marketing official. "Nagano results speak for themselves."

More than $300 million has poured in from worldwide and national corporate sponsorships, compared to $100 million in Lillehammer. Television rights sold for $530 million, including a $375 million deal with CBS.

The revenue is divided among Nagano organizers, the IOC, national Olympic committees and international sports federations.

The organizers get the biggest cut, around 60 percent.

FOR NAGANO, THAT MEANS $307 million from TV rights. In 1991, when Nagano was selected as the 1998 host city, Japanese officials estimated the figure would be only $161 million.

The 11 worldwide corporate sponsors and 26 domestic partners have chipped in more than $300 million -- 10 times Nagano's original estimate.

Television is the best barometer of the Olympics' pulling power.

While Lillehammer set a record for the number of countries tuning in, Nagano will do even better. Around 160 countries are taking the feed from Nagano, compared to 120 for Lillehammer.

"THE TRUE TEST OF INTEREST in any event is the broadcast coverage," Pound said. "The number of countries broadcasting images of Nagano confirms that the Winter Games are no longer the supporting act for the Summer Games."

Despite the marketing milestones, Nagano organizers aren't wallowing in profits.

The revenue will pay only part of the cost of the most expensive Winter Games ever. While Nagano's operating costs total nearly $1 billion, the bill soars to around $10 billion when spending for new roads, bullet train service and other improvements is included.