On July 26, an estimated 1 billion people globally will watch the opening ceremony of the Paris 2024 Summer Olympic Games.
Let that sink in. This means approximately 1 in 8 people around the world will be watching over 10,000 athletes from more than 200 countries parading on boats down the River Seine in Paris, passing iconic landmarks before culminating in the lighting of the Olympic flame. Roughly 325,000 spectators will line the riverbanks to watch the ceremony in person. And over the following 16 days, these same athletes will compete in 32 sports encompassing 329 events across 39 venues captivating 2.5 billion viewers worldwide and 10 million spectators in Paris alone.
The Summer Olympic Games is not just a sports event but also a colossal business venture involving billions of dollars and significant economic impact. As Paris prepares to host the 2024 Games, an exploration into its business aspects reveals extensive planning, financial implications and anticipated economic benefits.
Budget and financial planning
The projected budget for Paris 2024 is approximately $8.2 billion, divided into two main parts: the Organizing Committee for the Olympic Games budget of $4.4 billion and a non-OCOG budget of $3.8 billion. The OCOG budget is primarily funded by the International Olympic Committee contributions, sponsorships, ticket sales, hospitality and licensing agreements, with 96% coming from the private sector and a minimal 4% from public funding for the Paralympic Games, while the non-OCOG budget covers infrastructure projects 100% funded by public authorities.
Revenue streams
The financial model of the Olympics relies on diverse revenue streams:
Broadcasting rights: Broadcasting rights constitute the largest portion of Olympic revenues. The International Olympic Committee’s agreements with major broadcasters, such as NBC and Eurosport, contribute significantly. For instance, NBCUniversal’s deal for U.S. media rights through 2032, which includes two Summer and two Winter Games, is valued at $7.75 billion, with Eurosport acquiring European rights for approximately $1.45 billion over four years. As of April 2024, NBC reported $1.2 billion from domestic ad sales for the Paris Games.
Sponsorships: Corporate sponsorships are another vital revenue source. The IOC’s The Olympic Partner program includes 14 major corporations such as Coca-Cola, Visa and Toyota, who paid between $100 million to $200 million per four-year Olympic cycle for exclusive global rights and association with the Olympic brand. These sponsors will spend an additional $100 million to $200 million from their own budgets on activation (integrated marketing campaigns, athlete endorsements, hospitality programs etc.) in an effort to see a return on their investment. Additionally, Paris 2024 has secured significant sponsorship deals in categories that don’t compete with The Olympic Partner sponsors, generating $1.23 billion from domestic sponsorships alone.
Ticket sales: Ticket sales are anticipated to contribute around $1.34 billion to the Paris 2024 budget. With over 10 million tickets priced from $24 to $980, the goal is to create an inclusive and engaging spectator experience.
Hospitality, licensing and merchandising: Hospitality at the Games is especially important with corporations and governments hosting customers, VIPs and dignitaries. Licensing and merchandising are crucial as well with official Olympic merchandise ranging from apparel to memorabilia. Together, these sectors are expected to generate $1.5 billion in revenue, driven by the global appeal of the Olympic brand.
Despite the operational and security challenges along with the high costs of hosting the Olympic Games, cities continue to vie for the opportunity due to the prestige and potential economic impact. Paris expects several economic benefits from hosting the Games.
Economic impact on Paris
The economic impact of hosting the Olympics on Paris is multifaceted:
Infrastructure development: Major infrastructure projects were developed, including the construction of the Olympic Village and new sports facilities. These projects are expected to leave a lasting legacy, providing housing and amenities long after the Games conclude.
Tourism boost: The influx of visitors during the Olympics is projected to boost Paris’ tourism sector significantly. The 2024 Games are expected to attract around 15 million visitors, providing a substantial increase in revenue for hotels, restaurants and local businesses. Positive word-of-mouth and broadcast exposure is expected to further increase future tourism.
Job creation: The Games are set to create thousands of jobs, both temporary and permanent. From construction workers and event staff to hospitality and security personnel, the employment opportunities generated by the Olympics are extensive.
Urban regeneration: The Games are a catalyst for urban regeneration, particularly in areas like Seine-Saint-Denis, one of France’s poorest regions. Investments in public transport, housing and sports facilities are expected to improve the quality of life for residents and promote long-term economic development.
The business of the Olympic Games represents a multifaceted global enterprise that blends sport, commerce and culture on an unprecedented scale. As one of the world’s largest sporting events, the Olympics attract significant investments from corporate sponsors, broadcasters and host cities alike. These partnerships fuel the extensive infrastructure development, marketing campaigns and logistical operations necessary to stage the Games.
Beyond the spectacle, the Olympics generate substantial economic impact, stimulating tourism, job creation and local business opportunities in host regions. Ultimately, the business of the Olympic Games underscores its role as a global phenomenon that blends athleticism with economic dynamism, leaving a lasting imprint on both the sporting world and the communities it touches.
George Perry is an instructor of management and marketing at Christopher Newport University’s Luter School of Business. He is the former director of sponsorship marketing with International Olympic Committee global sponsor Visa.
