How the 2012 Olympics Are a Triumph of Capitalism

Corporate money, freely spent, can benefit both athletes and spectators.

As a New Yorker whose home city’s bid to host the Olympics that will begin this week was defeated, it’s tempting to greet the arrival of the Olympic flame in London with at least a touch of derision. The whole enterprise is spoiled by biased, anti-American judges from countries like Cuba and North Korea. The Greek fiscal crisis that is dragging down the entire world economy arguably had its roots in the costs of the 2004 Athens games. Some of the sports, like badminton or modern pentathlon, are obscure enough that they verge on the ridiculous, or at least that few people are interested enough to watch them when it isn’t the Olympics.

Get past the sour grapes though, and what is about to unfold in Great Britain — 10,490 athletes competing in 302 medal events, for which NBC and its affiliates plan a record 5,535 hours of television coverage — is an awesome spectacle. For the splendor of it, the world can thank not Baron de Coubertin, the avatar of amateurism who founded the modern Olympics, but capitalism.

The Athens example notwithstanding, after all, the money that funds the Olympics comes largely not from governments but from the private sector. NBC (not a Cuban or North Korean television company but an American one) agreed to pay a reported $4.38 billion for the rights to broadcast four Olympics, a sum that is itself made possible by NBC’s sale of commercial sponsorship time to advertisers. Even “broadcast” is now a misnomer, as the games are streamed on the Internet and available on cable channels. Another nearly billion dollars in Olympic funding comes from worldwide marketing sponsors like GE, Coca-Cola, McDonald’s, and Visa.

Critics will carp that by sponsoring the Olympics, companies like Coca-Cola and McDonald’s are misleading their customers. Wash down enough Big Macs with enough Cokes and your body won’t look like that of an Olympic athlete.

It’s not just fast-food chains and soft drink companies that see golden opportunities in Olympic marketing, though. The Wheaties cereal box has featured medalists like Olympic decathlon champion Bruce Jenner, gymnast Mary Lou Retton, and swimmer Michael Phelps. The swimsuit manufacturer Speedo paid Phelps a $1 million bonus for winning eight gold medals at the Beijing games in 2008. Sportswear and athletic shoe brand Nike will reportedly sponsor the U.S. Olympic basketball team.

It wasn’t always this way. The Washington Post reported the other day: “The monetization of Olympic athletes is a relatively recent phenomenon, said Prashant Malaviya, associate professor of marketing at Georgetown University. Until the 1970s, competitors were prohibited from accepting endorsements and payment for commercial advertising. Competitors were required to be amateurs. It wasn’t until 1986 that professional athletes were allowed to take part in the Olympics.”

Rather than corrupting the games, as some had feared — international Olympic documents still list as an objective “To control and limit the commercialisation of the Olympic Games” — the influx of advertising and sponsorships has led to games that engage and enthrall wider audiences as athletes perform at ever-higher levels of excellence. Sure, plenty of athletes from small countries in obscure sports do so with little if any hope of a big financial payoff. But surely, too, income from corporate sponsorships, or even the potential of such a jackpot, helps to make it financially possible, even enticing, for athletes to spend long hours training and practicing in pursuit of a long-shot dream.

Mitt Romney has been mocked for his role in organizing the 2002 Salt Lake City winter Olympics. Bloomberg News reported over the weekend that some Romney presidential campaign advisers balked at the Republican candidate’s plans to attend the London games, fretting that his wife’s horse “could draw more attention” to Romney’s wealth. Romney reportedly decided to go anyway.

Good for Romney. The Olympics show Americans winning in global competition, they show individual and team achievements that are the result of talent and hard work, and they show that corporate money, freely spent, can benefit both athletes and spectators. These are all fine campaign themes.

If Romney were to show up in London and say that in President Obama’s ideal Olympics, the gold medal winners would be taxed at higher rates so that some of the gold in their medals could be redistributed to non-medal winners, and that in this same Obama Olympics, corporate sponsorships would be banned via a constitutional amendment that reverses what the left calls the misguidedCitizens United decision, the former Massachusetts governor would probably be criticized for politicizing the summer games, a sin second only to commercializing them.

So let me say it, instead. When the Olympic telecast goes to a commercial break, don’t get annoyed. And when it returns to show corporate logos on the shoes or outfits of the athletes, don’t get mad, either. The multi-billion-dollar interaction between business and sports is a big part of the reason the show is so lively.

Ira Stoll is editor of FutureOfCapitalism.com and author of Samuel Adams: A Life. 

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  • ||

    How the 2012 Olympics Are a Triumph of Capitalism
    Corporate money, freely spent, can benefit both athletes and spectators.

    Don't forget all that taxpayer money going to fund stadiums used for 14 days and then abandoned, Ira. Maybe if the word Crony had been used to modify Capitalism, this article would be spot on. But otherwise, the Olympics are a blight on a city, what with the new traffic patterns, increased security, and major municipal spending that amount to nothing more than 2 weeks of jerking off for the world to see how "great" the place "could be".

  • Anonymous Coward||

    Don't forget that the Olympics are, for many of the cities that host them, a massive, shit-dropping, white elephant.

  • ||

    It's also worth considering that almost every country in the world engages in sports socialism.

    So, of course, does the USA. It's just that our sports socialism is pretty much limited to helping out zillionaire team owners rather than paying salaries to athletes, recruiting athletes from foreign countries and arranging accelerated citizenship etc in order to build squads that will bring home gold.

    NPR reported a few years ago that Australia spent something like $A3M per medal for the 2004 Olympics.

  • mybarber||

    There's only two major sports I can think of that doesn't recive hunge government payouts and favor,NASCAR and pro golf.Look at the NBA,NFL ,NBA and the tax exempt collage cartel NCAA.The olypics demands huge amounts of pulic funds from a host city.Here's hoping it stays out of this country.

  • ||

    European soccer leagues, particularly the EPL, though there are several teams fighting over getting the Olympic stadium after the Olympics.

  • Mo||

    NASCAR tracks frequently get taxpayer funds.

  • anon||

    Are they federal taxpayer funds though?

    I know it appears to be a minor distinction, but it matters a lot to me. If it's County or State funds that a track gets, it's far easier to avoid paying for a NASCAR track than it is if the Fed. Govt. is subsidizing the track.

  • Mo||

    Do federal funds subsidize the NBA, NFL or MLB? As far as I know, it's no. Also, the military does sponsor a NASCAR cars (as well as advertising during other major sporting events).

  • SIV||

    I wouldn't call purchasing advertising a subsidy. Unless you are advancinga "you didn't build that" argument to all endeavors supported in part by commercial advertising.

  • Mo||

    Well, government advertising is a bit different. They'll definitely only pay for ads on favored organizations.

  • UneasyRider||

    I think it's safe to say that the Army advertises through NASCAR because they see the fans as a fertile recruitment field.

  • RFID||

    The Olympics is(are?) a useless spectacle of nationalistic dickwaving that happens not nearly seldom enough. Hopefully the time will come where no one will watch the Olympics, so no one will pay for ads, so no one will bother to host the idiocy.

  • ||

    Amen.

  • Mo||

    And yet it requires more than £12bn in public funds. The last Olympics in London cost all of £600,000 total.

    If the Olympics are a triumph of capitalism, NPR is a Randian superman.

  • ||

    Agreed. Look, we all obviously like capitalism or else we wouldn't be reading Reason. There's no need to force a narrative that isn't there.

  • Mr. FIFY||

    Morning Sedition is fun to listen to, though.

  • Hugh Akston||

    Exactly. Let's save associations with the free market for something that actually merits it.

  • Hugh Akston||

    Also, let's not sully the good name of capitalism by associating it with something as boring and pointless as the Olympics.

  • Pro Libertate||

    That's right. The one thing pure capitalism has going for its "cool" factor is prostitution and drugs. Two things.

  • anon||

    And bitches. Never forget the bitches that capitalism brings about. Or at least that's what every rap video I've ever seen has taught me.

  • Pro Libertate||

    I'm surprised they don't just use bitches instead of cash.

  • anon||

    Perhaps it has been tried, and that's why so many rappers die without the killer ever being identified?

  • GILMORE||

    NBC agreed to pay a reported $4.38 billion for the rights to broadcast four Olympics, a sum that is itself made possible by NBC’s sale of commercial sponsorship time to advertisers. ... Another nearly billion dollars in Olympic funding comes from worldwide marketing sponsors like GE, Coca-Cola, McDonald’s.."

    All well and good.

    But I'd point out that the Athletes - the ostensible raison d'etre of the whole spectable - get none of it. Maybe the 1% that win medals get short term sponsorship...but nothing for actually providing all that great TV.

    I read a story a few weeks about griping about how American olympic athletes dont even recieve much of anything to subsidize training, transport, etc. compared to other nations. ... I went looking for it, and instead, came across 1985's "Athletes: Unpaid Volunteers in Olympic TV Bonanza"...

    http://news.google.com/newspap.....212,223370

    Then again, if there really were a 'free market' in olympic sports... I think you could probably kiss many events goodbye. There'd be a really Awesome MMA tournament tho'. Also = nude female mud-wrestling. Fencing... TO THE DEATH! Actually, I'm starting to warm up to the idea...

    Also, what above guy said about Taxpayer-funded stadiums.

    I've always thought of the Olympics as a gigantic government-funded economic boondoggle...? I seem to recall one never going by without there being some sordid scandal with the IOC....

  • Mo||

    But I'd point out that the Athletes - the ostensible raison d'etre of the whole spectable - get none of it. Maybe the 1% that win medals get short term sponsorship...but nothing for actually providing all that great TV.

    Sure they get it. They get promoted by the network to get a whole bunch of viewers for them to play a sport that no one gives a shit about. The sponsorship is their payment. The NBA sponsors the Olympic teams to get more worldwide viewership of their sport. The Dream Team is one of the greatest marketing coups ever. It cost the NBA next to nothing and basketball is now the second most popular sport in the world. The LA and SLC Olympics prove that you can have an Olympics generate a profit. But why do that when you can get by with public funding of the graft?

  • ||

    But why do that when you can get by with public funding of the graft?

    Yep, and this is why the World Cup was not awarded to the U.S. when the last one hosted here was the most profitable and most attended ever. We already have the stadiums and the infrastructure. No room there for anybody to get a cut.

  • Mo||

    I've lived on blocks with more people on them than you can find in all of Qatar.

  • Anonymous Coward||

    In the spirit of the true Olympic games, gold medalists should be exempted from all taxes by their home country for the rest of their lives.

    And screw MMA in the Olympics. I would hate to sully the good entertainment of two glass-chinned tomato cans (90% of most MMA fights) beating each other bloody.

  • UneasyRider||

    I don't understand why they even need new venues. There were plenty of facilities in London prior to this. Perhaps they would have had to spread things out a bit more, but it's absurd to build new stadiums just to use them for a few weeks. The thinking seems to be that since the games will revitalize any economy and since it is necessary to have new facilities in order to win the Olympics, it is worth any expense no matter how ridiculous in order to get the games. The whole thing is a boondoggle. Most of these athletes are used to competing at college facilities, make them use these.

  • allen||

    "Free enterprise" dammit.

    Karl Marx has caused enough damage, he doesn't need to leave his stain on free enterprise by hanging his meaningless sobriquet on an important natural phenomenon.

  • anon||

    sobriquet

    That's the most obscure word I've seen all day.

  • Pro Libertate||

    No, no, it's a great term. Our ism, it's capital!

  • SIV||

    "For the splendor of it, the world can thank not Baron de Coubertin, the avatar of amateurism who founded the modern Olympics, but capitalism Leni Riefenstahl and HITLER."

    fix'd

    As George Santayana said:
    Those who cannot remember the past are condemned to repeat it. Every 4 years

  • affenkopf||

    Because of shit like this article people confuse corporatism with capitalism.

  • Anonymous Coward||

    Forget all of this nonsense about the Olympics and capitalism, there is a serious question that needs answering:

    Olympic Pole Dancing, yay or nay?

  • anon||

    That question doesn't need to be asked. The only question is do we judge by firmness of erection or on athletic ability?

  • 16th amendment||

    The Olympics is far less capitalist in other countries. It is a triumph of nationalism and socialism.

  • ||

    Links referencing sports socialism in Canada and Australia.

  • GILMORE||

    It is a triumph of nationalism and socialism.

    I thought it was "the Will"? I saw a movie once...

  • cw||

    It's where Hitler came up with National Socialism!

  • GILMORE||

    Apparently the Olympics are also a triumph of anti-capitalist jingoistic protectionism =

    http://www.forbes.com/sites/st.....-in-china/

    ..also, a triumph of Head-Diapers =

    http://www.examiner.com/slides.....c-uniforms

    That should intimidate our opponents! Make our athletes look like... effeminate French yuppies on their way to the yacht club.

  • VG Zaytsev||

    Fuck the Olympics.

  • cw||

    Corporate money, freely spent, [...].

    Ha, right next to a banner loudly demanding: OVERTURN CITIZENS UNITED.

  • genericuser||

    The Olympics are to sports what the U.N. is to politics, a corrupt bureaucracy with self preservation as its prime function. They sacrificed the ideals of amateur competition on the alter of prime time dollars. The vile fascist Samaranch is joyously dead and gone, but the Euro-aparatchiks are still in firm control of this money-milking gaggle of ath-elitists. Bribery, cheating, doping, all business as usual at the I.O.C. I'd wish it on N.Y.C. though, y'all deserve it.

  • Custom Beats By Dre 2012||

    How the 2012 Olympics Are a Triumph of Capitalism. I personally think this is a worldwide victory

    Welcome to our custombeatsbydredanmark.com and purchase your favorite custom beats by dre!

  • jason||

    The Olympics is a big event and lots of money spent on the opening ceremony hope it will get successive.

  • brushtom||

    i have never heard anything like this before, it is beautiful. best of luck with your posts.
    oakley polarized sunglasses
    cheap sun glasses

  • mad libertarian guy||

    Because having roving bands of compliance thugs wandering around event locations, making sure that certain areas of England only have "Olympic Approved" advertising (or anything that could be perceived as advertising by the IOC) is capitalism. A clothing business cannot advertise "Summer Sale" if it's too close to a venue. A jewelry shop can't advertise "Get in on the Gold!" as part of a campaign if it's too close. And all of this is mandated not by the IOC, but by British fucking LAW, spurred on and essentially written by members of the IOC. You know, in good true "capitalist" style.

    Ira Stoll is full of shit, and this article stinks.

  • Jesus H. Christ||

    I was hanging out over at BoingBoing and they were bemoaning the corporatism of the olympics. Seems like no ones ever happy :(

  • Dan Clore||

    Something I wrote about the Olympics a few years ago:

    http://www.nolanchart.com/arti.....mpics.html

  • Gladstone||

    Most of the "sports" in the Olympics are totally arbitrary activities. It is beyond reason to determine why anyone should care which of the national champions involved perform better at them. A few of them do have æsthetic value, such as ice-skating, but even these have many arbitrary rules imposed on them

    Damn rules. In libertopia the winner is whoever smokes the most dope and gets the biggest boner and longest orgasm.

  • ||

    How convenient? Olympics is the triumph of capitalism. Commercial sponsorships are small potatoes when compared to the money poured into by nation states. It is not hosted by a commercial for profit entity, by rather by the tax payers of London. Each nation, at least the rich ones pour tone of money into sport programs in the hope of winning medals; for the glory of the state. How is this capitalism? The vast majority of the sports do not have for profit leagues, thus only supported by states funding. Each athlete receives a salary from the state to represent the state in sporting events. Then, the nation states fund the travel and other expenses for these athletes. To motivate athletes they award prize money. Libertarians should stop pretending that all things they seem to like are result of capitalism, when in this case it clearly is not. If we want a limited government, hiding its role does not help. To be consistent with the libertarian logic, this is one more area where government should not be involved in any way, shape or form.

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