[MUSIC] Hello. In this video we'll deal with Olympic TV rights philosophy and commercialization logic and their history, especially since 1980 with the starting of Juan Antonio Samaranch mandate. To those of you who are special interested in knowing in detail the evolution and the numbers of the Olympic TV rights, I recommend to you to read my article on the issue, which is available, as a complimentary material. The main source of funding of the Olympic family. Around 50% of the total income of the Olympic games comes from the TV rights. However, the TV rights sale is not only a vital economic operation for the survival and dissemination of the movement, but also a crucial element from the strategic point of view. The TV rights have to be sold but only to the television operator that offers the greatest amount of money but to those who disserminate the images of the Games to the greatest quantity of people possible too, as we will see afterwards. We can observe the fundamental role of television rights management in the Olympic Charter. According to the rule 48.1 and 2 of the Olympic Chapter, The International Olympic Committee takes all necessary steps in order to ensure the fullest coverage by the different media and the widest possible audience in the world for the Olympic Games. In addition, it is pointed out that all decisions concerning the coverage of the Olympic Games by the media rest within the competence of the IOC. Therefore, among other issues, the International Olympic Committee is the owner and direct negotiator of the broadcast right for the Olympics on television, internet and mobile devices. The TV rights are sold in exclusivity to only one operator in one territory, usually a country. Commonly, the television operator buys the TV rights and the rights on the internet platforms and mobile devices at the same time. Therefore, the exclusivity has demonstrated to be the right fomula for getting the most amount of money possible from the TV rights. Which are the long-term principles regarding the Olympic Broadcasting Partnerships according to the International Olympic Committee? To ensure improved global coverage of the Olympic Games. To promote the ideals of Olympism. To ensure the long-term financial future of the Olympic Games, and the Olympic movement. To forge strong links between sponsors, broadcast partners and the Olympic Family. To have a good insight of the TV rights' culture it is essential to review the different milestones of this symbiotic relationship. As I pointed out, in the London 1948 Olympic Games the BBC was the first in which a television company paid them money in order to acquire the TV right. More precisely, the BBC paid around 1,000 guineas for the rights to broadcast the Olympic Games. For the Rome 1960 Olympic Games, and for the first time ever, payments were jointly made for broadcast right, with total revenue of $1.2 million. For the first and only time in history, European television operators accounted for most of the 1.2 million figure. At that time, the International Olympic Committee received an insignificant amount of total revenue, between 1% and 4%, but it established the legal grounds for subsequent control of these broadcast rights, starting with Mexico 1968 Olympic Games, once the International Olympic Committee had taken legal control over a situation that had previously prevented it from even being present at the negotiations. Up until then, negotiations had been contacted by the Olympic Games host city. In 1971, the International Olympic Committee added a paragraph to the Olympic Charter, Article 21 to be precise, stipulating that only the IOC could negotiate with television operators and that it would be this body that decided on the distribution of broadcast rights. After this important change had been made, an agreement was reached for the distribution of broadcast rights and, consequently, the IOC acknowledged the high cost of the Television Center infrastructures and maintenance, that often exceeded revenue from broadcaster rights. This allowed the IOC to raise revenue from television broadcast rights by 10% up to 1980. The start of Juan Antonio Samaranch's mandate in 1980 was the turning point for the way in which the Olympic Games where marketed. He saw that there was significant capacity to raise revenue from broadcast rights sales to American television operators. Based on the change made to the Olympic Charter in 1971, he encouraged the International Olympic Committee to take control over negotiation with television operators, albeit with the presence of host city representatives in the first instance, up to broadcast rights sales for the Seoul 1988 Olympic Games. Samaranch introduced the commercial exploitation of the Olympic Movement by combining the commercial potential of American television and the public service nature of the European broadcasting model. To bring stability to revenue, irrespective of the city where the Olympic Games were being hosted, Samaranch decided to negotiate long-term contracts, and whenever possible, in advance of the name of the Olympic Games host city being known, at least seven years before they were due to be held. This allowed definitive access to NBC Universal, which had been looking for a sure-fire way of amassing large viewing audiences in a big sporting event like the Olympic Games, particularly in a multi-channel ecosystem that led to significant fragmentation of viewing audiences. Consequently, NBC paid $2.3 billion for the 2004, 2006 and 2008 Olympic Games in an agreement signed, in December 1995. In addition to the long-term contracts, the removal of free-charging agents and consultants was another of the big changes that Juan Antonio Samaranch made in the early years of his mandate. The mandate of Rogge, Juan Antonio Samaranch's successor as from July 2001, is one of competition development in bids for television broadcast rights, and of a return of consultants and advisors to Lausanne in light of the complexity of the new situation of major competition, especially in the American market where five operators have to battle things out. It is also the period that has brought the introduction of television operator's and promotion of the Olympic values and symbols. A commitment that introduces a new qualitative value in the bid to buy broadcast rights. Moreover, it is the period that has combined television broadcast rights and sponsorship: in negotiations in 2003, General Electic offered $200 million up to 2012 for its shareholders to become a TOP Sponsors. It has also been the era of increasing Olympic Games coverage, with large of multimedia groups adapting to a multi-channel environment and combining broadcasts of generalist channels with broadcasts on specialist sports channels, something that is more widespread in America, the United States of America. The introduction of true competition has helped reduce to the excessive dependence on revenue from American Television operators and increase revenue from Europe. In Europe, Rogger's mandate has also broken away from joint buying agreements from public television operators through the European Broadcasting Union and has introduced the development of a mixed model of individual agreement with television operators in big European countries, like in United kingdom, Germany, France, Italy, and Spain, and sales to Largadelle's Sport Five agency for another 40 European countries, with obligation to offer a minimum of 200 free-to-air hours for the Olympic Summer Games and 150 free-to-air hours for the Olympic Winter Games. At the end of his mandate on June 2011, Rogger's agreed with NBC Universal Group to sell the TV rights of the Olympics from 2014 and 2020 for $4.38 billion. The start of Thomas Bach's presidency, September 2013, has been marked by the long-term agreement with NBC Universal Group. On May 2014, the NBC Universal Group agreed to pay $7.65 billion for the TV rights of the Olympic Games until until 2032. More precisely, for the period comprised between, 2022 and 2032, NBC Universal will bill nearly $1.3 billion on average from every game, from 2022 through 2032. As an essential part of this of the new deal, NBC Universal also agreed to spend additional $100 million to promote Games and the Olympic Values from 2015 through 2020. This very recent IOC agreement with the NBC Universal Group will last more than president's Bach mandate. This will guarantee financial stability for the Olympic family in the long-term. On the other hand, it will allow the International Olympic Committee to explore an and improve other ways of funding. The oriental market could rise in the following years its contribution to the total amount of revenues in television rights, for example. [BLANK_AUDIO]
