On July 2, 2003, Vancouver was elected the host city of the XXI Olympic Winter Games in 2010, becoming the largest city ever invited to host the Winter Games. It was the first time a Winter Olympics had been held at sea level, and with an average February temperature of 4.8 °C, Vancouver was also the warmest host city on record. For these reasons, Vancouver was bound to attract added interest from winter sport enthusiasts worldwide.
Although Winter Olympics attract fewer viewers than Summer Games, the Vancouver 2010 Games benefitted from the fact that the Beijing 2008 Summer Games were the most watched Games in Olympic history, with action delivered to viewers around the world via television, the Internet, and cell phones.
Ever since the London Summer Games were first broadcast into homes around the world in 1948, the Olympic movement's greatest source of revenue has come from broadcast partnerships negotiated by the International Olympic Committee (IOC). Television broadcasting rights contribute approximately 50% of the total IOC revenues. (Corporate sponsors account for 40% of the total, and ticket sales and merchandising activities account for the remainder of total revenues.)
Over 30 years, the global broadcast revenue for the Olympic Winter Games increased from C$21.7 million for Lake Placid in 1980 to C$1.339 billion for Vancouver in 2010. And then, in 2014, the Sochi Winter Games reached almost C$1.5 billion.
The IOC manages the broadcast program and distributes 90% of Olympic marketing revenue to organizations throughout the Olympic movement to support the staging of the Olympic Games and to promote the worldwide development of sport.
The chart below depicts the exponential growth in broadcast revenue for the Olympic Winter Games for the past 34 years. (All figures are expressed in Canadian dollars.)
Olympic Winter Games Broadcast Revenue (C$)
Lake Placid1980............................................................21.7 million
Sarajevo 1984..............................................................107.5 million
Calgary 1988.................................................................340 million
Albertville 1992...........................................................305.5 million
Lillehammer 1994.........................................................369.3 million
Nagano 1998...............................................................573.4 million
Salt Lake City 2002......................................................772.4 million
Turin 2006.................................................................869.7 million
Vancouver 2010...........................................................1.339 billion
Sochi 2014.................................................................1.496 billion
Source: Data retrieved from www.olympic.org on November 22, 2015.
Questions
1. How much money did the IOC retain to cover operational and administrative costs as a result of the broadcast revenues generated by the Sochi Winter Games?
2. Answer Question 1 again for the Vancouver Winter Games and express your answer as an exponent in millions of Canadian dollars.
3. Estimate the total IOC revenues for the Sochi and then the Vancouver Winter Games in billions of Canadian dollars. Express each answer as an exponent in millions of Canadian dollars.
4. Calculate the annual rate of growth in broadcast revenue since Lake Placid. There are 34 years from 1980 to 2014. Use the following equation: Annual Growth Rate in Broadcast Revenue = (1.496 billion/21.7 million)1/34 - 1.