What’s shaping the future of the Olympics?

Hello and welcome back to PITCHSIDE MONITOR, your ultimate source for exclusive club management insights!

In this week's edition, we delve into the intricate world of the Olympics, and also feature insights from Olivier Jarosz and Adam Metelski on the compelling realm of sport geopolitics.

First up, a space where expertise meets excellence – our dedicated Club Management Insights section.

Major sporting events this summer are arriving in rapid succession, much like the proverbial buses. Following a football-intensive start to summer 2024 with the Euros and Copa America, we now transition to a multi-sport spectacle with the opening of the XXXIII Summer Olympiad in Paris later this week.

The games are returning to the birthplace of the modern Olympic movement, fuelled by the late 19th-century European drive to integrate sports into society. During that era, France, particularly Paris, was a vibrant centre of activity, hosting the creation of the International Olympic Committee – IOC and being driven by influential figures such as Pierre de Coubertin and Demetrios Vikelas.

Exactly 130 years later, the Olympics have evolved from an audacious dream into a complex global socio-political and economic phenomenon. Originally a relatively small international event with 14 nations competing in 10 disciplines, and featuring only 241 male athletes, the Games now play a pivotal role in shaping the development of sport on a global scale.

Business Model

Until a few years ago, the trajectory of Olympic host projects closely mirrored the Olympic movement's own motto: "Citius, Altius, Fortius" – faster, higher, stronger. In the context of hosting, this translated to more expansive, larger, and increasingly costly undertakings.

The 1984 Los Angeles Olympics is often heralded as the benchmark for a commercially successful Games, uniquely achieving profitability due to a combination of factors. Foremost among these was the minimal need for new infrastructure investment, as existing facilities were largely sufficient. Additionally, early breakthroughs in generating broadcasting revenue played a significant role in the financial success of the event.

Since then, when considering the balance of costs and revenues, the Olympics have typically struggled to generate a direct profit due to budget overruns and infrastructure costs that far exceed the revenue potential of a relatively short, intensive event. This lack of direct profitability has led proponents of Olympic projects to highlight the transformative benefits that accompany such large-scale events: the creation of short- and long-term jobs, tourism boosts, and even successful urban regeneration, as seen with Barcelona in 1992.

Another significant, albeit difficult to quantify, benefit is the enhancement of a city or country’s brand image through its association with the Olympics. However, this aspect has also generated controversy, leading to the politicisation of the Olympic spirit and concerns about over-commercialisation and "selling out."

Olympic Trends

Examining the key performance indicators (KPIs) for the Summer Olympics in the postmodern era (since 1992, following the fall of the Berlin Wall), reveals several notable high-level trends:

Participation in the Summer Olympics has notably increased, driven initially by the emergence of many newly independent nations following the collapse of the USSR and Yugoslavia. More critically, the world has become a more globalised environment, and access to sport has become much more universal through corporatisation. National sport governance systems now reach the farthest corners of the globe, supported by the IOC and other governing bodies, particularly in commercially successful sports. This has enabled even smaller nations, which previously may have been deterred by prohibitive costs or a lack of athletes, to achieve a higher level of presence at the Games.

An emerging trend of note is the rising number of disciplines and events within the Olympic framework. While it is typical for sports to fluctuate between Olympic cycles—some entering the fold and others retiring—each iteration of the Games reflects a varying degree of ambition in introducing new disciplines. Nevertheless, the overall trajectory towards an expanded range of sports is unmistakable.

The Olympic "seal of approval" serves as a mark of legitimacy, differentiating between Olympic and non-Olympic sports. However, securing a place in the Olympic Games represents just the beginning. Numerous sports are recognised by the IOC but are not included in the events programme for various reasons, including their level of popularity. This results in a two-tier system even among sports deemed legitimate by the IOC's standards of governance.

Additionally, this recognition mechanism reinforces the traditional European hierarchical approach to sports governance, ensuring its continued influence. There is often a significant delay between the emergence of new sports and their inclusion in the Olympic roster—take breaking, for instance, which, despite being hailed as the cutting-edge sport of 2024, originated in the urban landscapes of New York in the 1970s and 80s.

Furthermore, some modern sports may encounter challenges or choose not to join the Olympics due to the restrictions imposed by the Games. In summary, while the Games may see the addition of new disciplines to attract a younger audience, substantial increases in the number of sports are unlikely. Moreover, some established sports may be phased out, leading to a more modest overall growth in the programme compared to the significant expansions of the past three decades.

A final significant trend to note is the increasing participation of female athletes across various sports. The inaugural modern Olympics in 1896 did not include any female competitors, but by Paris 2024, we will witness the culmination of a century-long journey towards achieving gender parity, with a balanced 50/50 split in participation.

Have the Olympics Peaked?

Considering the evidence presented, can we conclude that the Games, as currently structured, have reached their peak? This includes the scale and ambition of host cities in surpassing previous editions, the expanding number of sports and athletes, and the ongoing efforts to ensure equality in competition.

While the current landscape suggests that we may have witnessed the last of the grandiose Olympic projects marked by monumental construction and costly white elephants, the future of the Games appears to be shifting towards more sustainable models. Upcoming Olympic ventures are likely to focus on utilising existing infrastructure to manage costs more effectively. This shift will undoubtedly impact future bidding processes, determining which cities and countries are best equipped to meet the evolving demands of hosting this major event.

Maximising revenue remains a significant challenge for Olympic organisers. Despite the grandeur and scale of the Games, they are inherently short-term events with limited longevity. As a result, finding additional revenue streams beyond broadcasting and sponsorship deals proves to be a complex endeavour.

Ticketing and hospitality are key revenue streams, yet recent summer Olympics have generally achieved strong sell-through rates. However, accommodating large spectator numbers brings challenges such as overcrowding and logistical issues, which can negatively impact both public perception and individual attendee experiences.

The Olympics differ markedly from single-sport mega-events such as the FIFA World Cup or the UEFA European Championship. With a significantly higher number of athletes—recent Summer Games host approximately ten times more participants than a World Cup featuring 48 teams and squads of 26 players—organising the Olympics involves managing a vast array of events across numerous specialised facilities. This breadth can lead to disparities in the commercial appeal of different events, with some being more challenging to promote or equip for a contemporary viewing experience compared to others that attract less global attention.

Addressing these challenges is expected to yield some solutions. However, current measures, such as Paris increasing public transport fares during the event, illustrate the somewhat contradictory approaches being adopted.

In this edition’s “Football Talks” segment, we engaged in a conversation with Olivier Jarosz and Adam Metelski , who together, recently co-edited a publication on sports and geopolitics. We asked them a few questions, and here are their insightful responses.

1) As we witness the opening of the Paris Olympics followed by the Paralympics, is sport today more driven by politics than by business?

The influence of politics in sports has become increasingly evident, but it’s not a new phenomenon. For instance, the Ottoman Empire boycotted the first modern Olympics in Athens in 1896. However, beyond the Cold War and the consolidation of globalisation post-1989, it's worth noting the recent vote on the Olympic Truce at the United Nations General Assembly. This has been a practice since 1993, but unlike previous years where there was consensus, this time there was an actual vote. Out of 193 member states, only 118 voted in favor. Significantly, both China PR and Russian Federation abstained from voting. This shift indicates that political considerations are playing a more substantial role in international sports, overshadowing the values promoted by the International Olympic Committee (IOC), which are increasingly perceived as Western ideologies and part of the geopolitical landscape. Obviously, it is also a It’s incredible to see the increase in the value of broadcasting rights for the Olympic Games. Over the past 60 years, revenues have skyrocketed from $1.2 million to over $3 billion.

2) How would you define geopolitics and its influence on sport?

I like the definition of Singaporean diplomat Kishore Mahbubani, who describes geopolitics as the strategic interaction between global powers that shapes the international order. He highlights significant shifts in global power dynamics, particularly the rise of Asia and the relative decline of Western dominance. This is particularly interesting in sports, as Europe has hosted over 50% of all Olympics so far, but there is a noticeable shift towards other regions.

3) How has sports become a tool of international strategy, and why are major sporting events so highly contested on the global stage?

Sports have evolved into a powerful tool of international strategy due to their ability to draw global attention and foster national pride. Major events like the Olympics and the FIFA World Cup are not just athletic competitions; they are platforms for countries to showcase their culture, capabilities, and influence on a worldwide stage.

A few years ago, Professor Joseph Nye elaborated on the concept of soft power, which has since evolved into smart power. Soft power uses attraction and persuasion rather than coercion. Sporting events attract billions of viewers globally, providing countries with an unparalleled opportunity to be in the global spotlight, with around 4 to 5 billion viewers, making these events some of the most-watched worldwide. More nations are represented at the Olympics than at the UN or the World Cup, where less than one-fifth qualify.

Hosting or participating in these events allows countries to make political statements and foster diplomatic relations. For instance, it's impressive to see the Louvre gathering that President Macron is planning to host for many heads of state. Sports can unite a country internally, fostering national pride and cohesion in certain cases and successful sporting events and achievements create a sense of shared identity, which governments often capitalize on to strengthen their domestic political standing.

Besides politics, there are economic and developmental goals. Hosting large sporting events often leads to significant infrastructure development and economic investments like Saint Denis area in case of Paris, aimed at long-term benefits for the host country. However, these events are rarely financially profitable; they serve as intangible tools for state branding and investment drives.

Personally, I think we need to honor Pierre de Coubertin, who had a genuine vision of peace. Unlike football, which is immensely popular but limited in scope regarding participating countries, the Olympics represent almost all nations. This inclusivity makes the Olympics a unique platform for global representation and competition, emphasizing international unity and diversity.

All in all, sports have become a multifaceted tool in international strategy, blending politics, diplomacy, national pride, economic development, and universal representation. The intense competition to host and succeed in these events underscores their significant role in shaping a nation's global standing and internal unity.

4) After Cortina and Los Angeles, who will organise the Olympics next?

There is growing interest from various locations, including Doha, Ahmedabad, Jakarta or Astana for the summer OG. This indicates a shift towards other regions. We are likely to see fewer individual cities hosting the Games and more regional collaborations, similar to the upcoming Winter Olympics in the French Alps and Switzerland. If the Youth Olympics in Dakar in 2026 are successful, we may witness the emergence of an African bid, potentially from Morocco. In Europe, Poland has expressed interest in launching a bid, as mentioned by authorities last year.

In this edition's football insight, we aim to provide an overview of the operating structure of the Olympic movement. See the infographic below.

Prepare for the forthcoming season with LTT Sports! Our bespoke club assistance is tailored to seamlessly guide you through the upcoming challenges.

Choose from our Zoom In proposal, offering expert remote consultations with guaranteed hours of Zoom-based exchanges and access to our analytical help desk.

Alternatively, opt for our comprehensive Zoom Out package, which includes an on-site 360 quality assessment, club identity sampling, strategy implementation verification, and a comprehensive club health & functional check report conducted by a minimum of two experts over a day.

Looking for more? With Zoom Out+, you can customise your package with additional features to precisely meet your requirements. Elevate your club's performance with LTT Sports today!

For more details on these proposals, please see here.

Our team member Anne-Marie Itoua , who is actively engaged with the Paris Olympics, will be providing on-site updates and insights. Concurrently, Olivier Jarosz will be delivering stories and coverage throughout the Games.

Stay tuned via our channels for the latest updates and exclusive behind-the-scenes content from the Paris Olympics.

That brings us to the end of this week’s newsletter. We hope you found eye-opening insights from our content this week. Each week, we will be curating exclusive content for you from the club management ecosystem. So, stay tuned for more and don’t forget to subscribe to our newsletter here!

We have recently started a WhatsApp Channel. Join our community of football enthusiasts and industry professionals today. You can join the channel by following the link here.

LTT Sports is an advisory firm focused on connecting football strategy and operations based on experience, analysis and a strong network. At LTT Sports, we have created a set of services for football organisations, providing transversal solutions at any level of the professional football pyramid – to boost performance off the pitch, directly impacting on-pitch results.

*** Disclaimer: LTT Sports is an independent think tank aimed to be a platform of discussion amongst football stakeholders. The answers received for our interviews are personal views of the interviewee and/ or the organisation he or she may represent and strictly do not represent our views on the subject matter.

Contributors to this week's newsletter: Olivier Jarosz, Konstantin Kornakov