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Growing sports revenues demand strategy, vision

By Karolos Grohmann

BUENOS AIRES (Reuters) - Sports federations refusing to modernize and professionalize operations will be doomed to fail as the global sports business experiences unprecedented financial growth, the Olympic sports federations' umbrella organization said on Thursday

The 26 federations which took part in the 2012 London Olympics will divide up more than half a billion dollars in International Olympic Committee money, the largest amount ever dished out by the Olympic body.

They shared less than $300 million only four years earlier at the Beijing Olympics, Andrew Ryan, general director of the Association of Summer Olympic International Federations (ASOIF) told Reuters on Thursday.

"This is a very significant increase," Ryan said. "In Barcelona in 1992 that figure was less than $30 million in total and federations divided up about $1.5 million each."

After what Ryan said was the "phenomenal success" of the London Olympics last year, federations, split in four groups, made no less than $14 million and as much as $47 million for athletics.

Rankings have been recalculated for the Rio de Janeiro 2016 Olympics, placing 28 sports - including new ones golf and rugby - into five groups.

"Sport is growing globally and international federations (IFs) see the same growth in their own revenues as in the revenues from the Olympics," Ryan said.

"The IFs are ramping up their revenues."

GROWING INCOME

He said income distributed from the Rio Games would again be in the $500 million range due to the long-term TV deals that have been agreed years before, the main source of the federations' Olympic revenues.

But as Olympic revenues grow every four years so will international federations earnings.

Broadcasting revenues alone, the biggest source of income for the IOC, are predicted to top $4 billion until 2016.

"The future for federations is to think ahead, have a strategic plan. There will be casualties... those who fail to understand and modernize," Ryan said.

One of the federations that failed to read the writing on the wall was wrestling which lost its spot in the 2020 Olympics in February.

The federation jumped into action, overhauling the sport and its administration in the past seven months to make a shortlist along with softball/baseball and squash for inclusion back in the Olympics and the Games's financial gravy train.

"One of the consequences (of this growth) is that the gap between Olympic sports and non-Olympic sports is growing," Ryan said.

An Olympic exit is certain to severely curtail a sport's popularity, funding and reach. It means a cut in funding and a drop in overall broadcasting revenues, equipment sales, membership numbers as well as government funding in many countries and far less exposure.

"Every year by just being an Olympic sport it brings in hundreds of millions of dollars," Ryan said. "It is serious. It is not just the few millions (in Olympic revenues), it is the hundreds of millions they would lose by being out of the Games."

(Editing by Ed Osmond)

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