The high price of (Olympic) gold

If you thought you were inundated with endless advertising during any major election year, brace yourself for an Olympic onslaught that’s already underway with opening ceremonies not slated to begin until July 27.

Already, we’re seeing endless promos from NBC (provided you watch NBC). They’ve been airing prime time coverage of the Olympic trials for the past week and during those trials they constantly hype the upcoming games. After spending $4.38 billion dollars to capture the broadcast and online rights to coverage through 2020, they certainly need to do a little promoting to get back their investment.

Still, it’s probably a losing proposition. In 2010, NBC lost an estimated $223 million on the Vancouver games. But they did manage to get in a few plugs for their upcoming fall lineup of shows.

The usual corporate sponsors have signed on and their “proud sponsor” commercials are in full swing. Visa is everywhere you want to be. McDonald’s is proud to support the Olympic dreams of our fast food nation. Coca-Cola is spreading their happiness message while others like GE, Panasonic, Omega and Samsung are touting their respective Olympic tie-in stories to tout their products.

Awareness will be up but that doesn’t necessarily mean sales will also rise. Studies show that unless you are launching a new product line and that it is a fully integrated effort, that merely showing up on the airwaves will be at best a momentary blip in your sales efforts.

If you’re going to compete in the Olympics, you’ve got to go all in and stay in the race.

As for the host country, they’re all set to take a giant Olympic bath. It’s estimated that more than $37.5 billion will be spent by our good hosts across the pond to stage these Olympics. The original estimate was around $12-$14 billion but costs have spiraled wildly out of control, due in part to increased security and infrastructure measures.

When first awarded to London, the Olympics were heralded as the savior to Britain’s battered economy. In reality, these games will do a great job of continuing to land blow after blow to their economic well-being. Even as 40,000 athletes, coaches, trainers and hangers-on descend upon the Olympic Village along with a multitude of attendees, it’s estimated that tourism is expected to drop by 4% as non-Olympic-related tourists are expected to shy away from London town to avoid the gridlock and detours that the Olympics will help create.

I dug around a bit but was unable to find how much U.S. taxpayer money goes towards supporting the Olympics. In Australia, the price of an Olympic gold works out to about $15 million per medal needed in taxpayer support.

There are exceptions, but in general, from the time the first modern day Olympics began back in 1896, they’ve been a losing proposition to the host city and often to the host country. After the Olympics leave town, many of the oversized stadiums used to host some of the games go unused because they simply can’t attract the Olympic-sized crowds.

So what’s my point with all of this negativity about the Olympic games? I love watching the Dream Team, I enjoy the track and field and the volleyball and the diving. I’m all for the Olympics.

But I don’t think they necessarily inspire the average citizens of any country to work out more. I do think some of our youth see these games and pursue their dreams. But there are just as many who pursue their dreams to be doctors or teachers or scientists or NBA stars or whatever. Dreams should always be supported.

Olympic dreams carry high price tags and sharing those dreams with the world costs a lot from broadcasting them to sponsoring them and the returns are far from guaranteed.

So sit back, have a cheeseburger and a Coke and enjoy the games!