Summer Olympics: USOC Revenue Deal Leaves Questions About US Bidding for Games

Avi Wolfman-ArentCorrespondent IIMay 24, 2012

INNSBRUCK, AUSTRIA - JANUARY 22: In this handout image supplied by the International Olympic Committee,  IOC President Jacque Rogge on the closing press conference for Innsbruck 2012 Youth Olympic Games on January 22, 2012 in Innsbruck, Austria. (Photo by Xu Liang/IOC via Getty Images)
Handout/Getty Images

The Associated Press is reporting today that the U.S. Olympic Committee and the International Olympic Committee have reworked their contentious revenue-sharing deal, opening the door for American cities to bid on future Olympic Games.

The USOC had previously imposed a moratorium on Olympic bids while both sides came to an agreement.

The new deal includes significant concessions from the USOC and left me with a whole host of questions.

For example:


Does this mean the U.S. is favored to land the 2022 Winter Olympics (the next Games on which it can bid) or the 2024 Summer Games?

It's possible the IOC feels some debt after having denied the U.S. for so long. Or perhaps this agreement comes with some tacit assurance that the USOC will win a bid in the not-too-distant future.


If the USOC hadn't renegotiated, would the IOC have eventually caved and granted a U.S. bid?

American advertising dollars and American television viewership are a huge chunk of the Olympic revenue pie. Mad as the IOC was at the USOC, at some point it has to answer to the companies and sports fans who can take their business elsewhere.

The embargo ran two ways, and I wonder if the IOC could have kept it up much longer.


How valuable is an Olympic bid to the USOC?

Consider that the most-watched Olympics ever—both in terms of global viewership and American viewership—took place four years ago in Beijing, 12 time zones away from New York City.

As those Games proved, the USOC can grow the Olympic brand and generate abundant revenue even when when the competition takes place across the globe.

Yet the USOC seems to feel quite strongly that it needs a home-soil Olympics to improve its bottom line; else it wouldn't have made this significant trade-off.

I wonder what the economics say.

How much extra revenue is generated for the USOC when it hosts the Games?

And is that margin shrinking in an Internet age where people can feel just as connected to an event 4,000 miles across the ocean as they do a block party?

Which leads to my final question...


Does the USOC overvalue Olympic bids?

Because that's the only thing the USOC gets in return here—a chance to host the Olympics in the future.

It's a rather vague proposition considering the very tangible concessions the USOC just made. And if the Beijing Games are any indication, the correlation between hosting and viewer interest is suspect.