03 Mar 2014
Farewell Sochi
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The Sochi Games (aka the Putin Olympics) have ended. How should they be assessed? Harvard Business School professor Emeritus Stephen A. Greyser, an expert in marketing and communications who has studied the business of sports for decades, offers his post-Games commentary and analysis.


Legacies

For Russia and the International Olympic Committee (IOC), a safe experience in Sochi was the most important legacy. For Russia, add outstanding medal-winning performances, greatly expanded resort facilities for potential future tourism (albeit facilities inconvenient to reach), and national pride bolstered not only by an impressive array of Russian athletes (the disappointment of the hockey team’s elimination notwithstanding) but the successful staging of the country’s first Olympics since the 1980 Games in Moscow (boycotted by the United States and many of its allies).

Alas, not everything went smoothly -- the costs ($51 billion) were bloated, some hotels were not fully ready at the start, the snow competition sites were at less than Alpine firmness, and most significantly, the human rights issues that dominated much discussion during the months preceding the competition sustained a negative image for Russia and Putin – an image exacerbated by the events in Ukraine not long after the light of the Olympic torch went out. Looking ahead, the public investment in prospective new housing and transportation in Sochi will likely be of little benefit to the average Russian, unlike the London Olympic experience, where part of that city benefited significantly from development projects associated with the Games. And unlike after the Beijing Games, important new business relationships and development in collaboration with western companies will be at best a modest consequence for Russia.

Where Were the US Star Athletes?

In a departure from most Olympic scenarios, few US stars emerged to gain viewership for NBC’s networks and endorsement gold for themselves. Figure skating (the most popular Winter Games sport) generated attractive newcomers such as Gracie Gold (who had two visible major endorsements with VISA and Procter & Gamble, with undoubtedly more to come), but only ice dancers Meryl Davis and Charlie White stood atop the podium, and they are said to be retiring. Skier Mikaela Shiffrin, who won slalom gold at age 18 and wants to compete in multiple events four years from now in South Korea, certainly has the potential for significant endorsements. But overall, London’s swimming and gymnastics stars far outshone Sochi’s US performers. In short, several key elements for hitting the endorsement jackpot were not strongly present for US winter competitors – a gold (or at least a medal) performance and participation in a very popular sport. (A third factor, an unblemished personal reputation, was not relevant for these Games.)

NBC – Solid but not Tops

For NBC, average viewership was the highest ever for a non-North American Winter Games, with more than 21 million viewers. But that number was less than for 2010 in Vancouver (24.4 million). Again, the thin ranks of individual star performers in popular events (the winless speed skaters come to mind immediately) was one cause – standout athletes in these events are draws, even when the site is many time zones away, and some people already know the results when the sports are aired in prime time. The experience of London demonstrated that for the US audience, knowing who won – if it was an American – did not diminish the number of prime time viewers, reflecting the power of social media when good news is the topic. People still want to see the competitors in action.

Overall, NBC had many big wins. It dominated the other networks’ offerings, especially on weeknights. Also, via a cascade of promotions in the first week of the Games, it successfully introduced new Tonight show host Jimmy Fallon. Early viewership was aided by the IOC’s addition of several X-Games sports (aimed at drawing younger audiences) and the inclusion of team-figure skating on the first weekend, which showcased top performers in each skating event competing for a group medal.

These Olympics also built viewership for the NBC Sports cable network, NBCSN, which carried live daytime figure skating and hockey games. Most significantly for future Olympics (and other events held many time zones away), live streaming generated record simultaneous viewership – led by 2.1 million for the US-Canada men’s hockey game and 1.2 million for the US-Canada women’s final. Data from the London Games showed that individual hours of viewership increase meaningfully with the use of mobile and other platforms beyond the TV set.

Time zone distance will remain a big problem for NBC in the 2018 games in South Korea. But at this point NBC is not looking ahead that far. Its full-page “Gold and Glory” thank-you ads presaged its next set of big Olympic moments: “We’ll see you in Rio 2016,” where the mere two-hour time difference, at least for the East Coast, will be much more felicitous for prime-time viewing.

IOC Concerns

The IOC, however, has some worries. Concerns have already arisen regarding the 2016 Rio Summer Games (and Brazil’s 2014 World Cup) – public protests over excessive spending, accidents at construction sites, slow progress in infrastructure preparations, and inflated costs. Granted, the IOC and FIFA, which oversees the World Cup, select host cities intent on broadening the continental reach and geography for their prime events. But still, one might ask why the IOC ignored human rights problems in China and Russia, and why FIFA didn’t worry about the prospect of social unrest in Brazil. The leaders of both bodies might benefit from some soul-searching.

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