Sports Biz with Darren Rovell

Chicago Should Win Olympic Bid

Chicago Olympic Candidate Flag

I'll start by saying that trying to handicap what city will win the Olympic Games is an idiotic exercise. Not all of the 106 voting IOC vote with rationale and sometimes the winner is a product of the order in which cities get eliminated and how those votes are passed on.

But Chicago makes more sense than Rio, Madrid or Tokyo and it has nothing to do with President Obama showing up in Copenhagen for the presentation early this morning.

It also doesn't have anything to do with Chicago's presentation, for that matter, which mentioned the word LEGACY more than 10 times, but didn't mention any of the three most important words: MONEY, TV RIGHTS, ADVERTISING.

That's why Chicago should win.

Because history has shown that the winning bid for the US TV network is traditionally 10 times that of the rights fees paid by other countries. Brazil's TV network's winning bid for '14 and '16 games was $210 million. Spain's? $100 million. NBC, of course, paid $2.1 billion for the 2010 and 2012 games.

The recession caused the IOC to wait on the US television rights bid and that means that it allows the bidding networks - NBC, ABC/ESPN and possibly Fox - to decide how much the games are worth based on what city is pitched in the second half of the package - the 2016 games. Bidding wars are bidding wars, but insiders tell me that a Rio win over Chicago would cost the IOC about $250 million in rights fees from the winning US bid. That's a high cost to give South America its first games.

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None of the bidding parties have said this publicly yet, but the choice of Sochi, Russia for the 2014 games has devalued rights for the US networks. The eight-hour time difference is cumbersome and it's not the easiest venue to set up shop in.

Then comes the corporations. While it's nice to think that US-based companies that dominate the IOC's top tier of sponsorship want to market around the world, the reality is that they'll spend much more if the games are in Chicago. The money coming from Coca-Cola and McDonald's , the latter based in Chicago, is not only important to the IOC, it's also important to the networks who are going to bid a certain dollar figure based on what they think they can get back in advertising. So how much more will the American companies spend in the 2016 games are in Chicago?

Between 30 and 50 percent more, according to Tony Ponturo, former vice president of global media and sports marketing for Anheuser-Busch and now chairman of Leverage Agency, a New-York based sports marketing firm. Ponturo says that it's not only a matter of marketing return, but also a matter of company pride if the games are hosted in the company's homeland.

What will happen today? I can't tell you. This is, without a doubt, the strangest process in all of sports. What I can tell you is that if Chicago loses, a lot of money was left on the table.

Questions?  Comments?