University of Maryland: Olympics Can Defeat Threats of Pandemic Protocols, Ballooning Costs and Diplomatic Clashes

Artful camera work couldn’t fully hide the fact that Beijing’s National Stadium was far from full on Friday as athletes paraded into the opening ceremony for the XXIV Olympic Winter Games—one of many pandemic-inspired restrictions stretching throughout the competition that mirror similar ones at the recent Summer Games in Tokyo.

And then there’s the diplomatic boycott, as government officials from the United States, Britain, Canada and Australia who would normally attend the Games stayed home to protest human rights violations in China.

Critics have decried the modern Olympics as an international spectacle of overspending, corruption and autocracy, and now that it’s overlain as well with public health risks—many Japanese blamed the games for a concurrent COVID spike in Tokyo—some question whether it’s time to end the Games altogether.

“Perish the thought,” said Henry C. Boyd III, clinical professor of marketing at the University of Maryland’s Robert H. Smith School of Business. “The Olympics remains the galvanizing force that promotes world peace through shared appreciation of true athleticism.”

Boyd, who previously described how marketers nimbly adjusted their promotional campaigns to the pandemic-tinged 2021 Summer Games, said that since the modern Olympics debuted in 1896, it’s been a bonanza for sports fans and a way for nations that might otherwise be overlooked to make an impression on the international stage through the striving of plucky athletes.

“Essentially, through the efforts of the International Olympic Committee (IOC) and host nations, succeeding generations have waited eagerly every four years to see the best in human competition,” he said.

Boyd’s faculty colleague Roland Rust concurred, saying the Olympic brand sustainable in the face of such acrimony as long as it remains athlete-centric. “From the athletes’ perspective, the Olympics remain the most important world competition in many sports, and given the short competitive lifespan of a top athlete, it would be devastating to those athletes to remove the Olympics from the competitive schedule,” said Rust, Distinguished University Professor and the David Bruce Smith Chair in Marketing.

Boycotts, “although politically tempting, do little to dissuade autocratic hosts—for example, Germany in 1936, and Russia in 1980—but do lasting damage to the athletes who can’t compete,” said Rust, who leads the PR DC Elite running team that trains Olympics hopefuls. The U.S. showing up at the games allowed Jesse Owens’ victories to take place as well—an embarrassment for Hitler and the Nazis in Berlin in 1936, Rust said.

Fixing the Olympic Games’ Business Model
But “worth saving” definitely doesn’t mean “above reproach,” Boyd said, starting with the steep cost of putting on the Games.

“Over the last five years, using the unbiased lens of forensic accounting, numerous studies have clearly shown that hosting makes no sense if a nation is driven solely by the profit motive,” he said. “Truth be told, on a repeated basis the Olympics is a money loser, and the host nation is often left holding the bag” due to frequent cost overruns in constructing the needed venues and transportation infrastructure.

Tokyo 2020’s projected costs were $7.4 billion, but the final tally was $25 billion. In Rio 2016, the projected costs were $14 billion, compared to $20 billion in actual costs. London 2012’s price tag more than tripled to $18 billion, while Beijing 2008’s projected $20 billion cost paled in comparison to the true $45 billion spent.

The ability to profit or even break even is also hindered by television rights that flow to the IOC, which in the 1990s pulled in 4% of broadcast media revenue compared to 70% in 2016.

IOC President Thomas Bach’s “sterling” new idea of establishing permanent host cities to defray costs could help the Games carry on strong far into the future, Boyd said.

“Structural change is certainly warranted to ensure the games’ survival,” he said. “Perhaps Winston Churchill put it best when he observed, ‘To improve is to change. To perfect is to change often.’”