Commercial Interests and the 2016 Rio Olympics

This essay explores the commercial interests and financial success of the 2016 Rio Olympics. It discusses the various global sponsors and TV companies that invested billions of dollars in the event, as well as the impact of the Olympics on Brazil's real estate market. The essay also highlights the role of commercial partnerships in funding the Olympic Games and generating revenue. Overall, the Rio 2016 Olympics proved to be a lucrative event for Brazil, attracting significant commercial interest and financial investment.

Commercial interests and the 2016 Rio Olympics
Rio de Janeiro hosted its first summer Olympics in the year 2016. It was an international
multi-sport event, which took place in the month of august, where more than 11,000 athletes
took part from 205 National Olympic Committees and countries (Smart, 2018). The Rio 2016
Olympics was the first Olympic Games to ever hold in a South American country and second
to be held in a developing nation after Mexico City Olympics in the year 1968. As it was the
firstOlympic to be held in South America, the country gained a lot of commercial interest and
became the richest games in all of the Olympic history. There were various TV companies
and channels that paid more than $4billion for screening the 19 day sports eventand around
11 global sponsors bankrolled the whole event at the market value of more than $1.5 trillion
(McGillivray, et al., 2019). The global sponsors at the Rio Olympic 2016 were using that
financial opportunity for lavishing more money at the event as the games were expected to
bring over $9.3 billion in marketing revenues.
The Rio Olympics was one of the successful events organised by the Brazilian government
and the government expected to generate significant amount of money for the government
and country itself. Brazil being a developing nation was faced with many difficulties but the
commercial interest of the event like Olympics always kept the flame burning with
enthusiasm. Rio 2016 has been positive for the Brazilian government. As discussed above the
event gets number of sponsors and partners which acts as the lifeline of the organisation and
also helps the event to be effectively completed. The Olympic Games have had an overall
impact on Brazil especially on Rio. For instance, the real estate market of the city received
high enthusiasm when many people from outside the country and itself from the country
showed willingness to buy property (Allen, et al., 2018). Apart from the Brazilian
Government directly contributed towards the real estate market taking significant amount of
land from the owners and the companies to develop infrastructure. As stated by many
scholars and media groups the 2016 Olympics is by far the richest by the measure of
government spending and commercial interest shown by the different brands which clearly
show that Olympics still has the interest of people from all across the world. The Media
organisations especially the broadcasting organisations have paid significant amount of
money for showing the sports in their respective channels. Around $ 4billion have been
invested by them for 19 day action which clearly shows that with time the sponsorships and
partnerships get bigger and bigger and the interest in sports for people have risen significantly
(Duignan, et al., 2019).

The commercial partnership plays a very important role in everyOlympic Games, according
tothe International Olympic Committee orIOC; it is like financial lifeblood that helps in
generating revenues that accounts for around 40% of all the Olympic income (Coburn and
McCafferty, 2016). The commercial partners of the game are subjected to provide morevital
funds, technical services along withproduct support in order to make sure that the Olympic
Games become operational and sporting success for the year. The IOC has the rights for
managing the broadcast partnerships. They are responsible for sponsorship the top worldwide
programmes,licensing programmes along with the official supplier for the games (Gaffney,
2016). Thelocal organising committees under the IOC are responsible for handling the
domestic sponsorship,ticketing as well as licensing the programmes in the host country.
During the preparations of the game, the domestic sponsorship programme arescrutinised it
serves as both a pointer of the local organiser’soperational aptitude along with theindicator of
thefinancial success of the event (Barr, et al., 2016).
The marketing plan of the game begins from the timeOlympics are awarded to a city.
Theorganising committee for Olympic in the Rio 2016 started developing its marketing plan
for the commercial gains in the early 2010. It started withwinning the bid for the games and
followed up to several commercial interests among the corporate sector in Brazil (Simon and
Braathen, 2019). The timeline for the commercial interest of the games from 2010 till 2016
includes several pioneer partnership relationship such as partnering ofBradesco and
BradescoSeguros in 2010, a Mexican multinational telecoms groupAméricaMóvil in 2011,
American Maggie Sanchez in 2011, partnering with Nissan min the automotive category in
2012,BrasilFoodsin 2013, EF Education First and Nielsen in 2014, Aliansce Shopping
Centres in 2015,TAM Airlines and TAM Travel in 2015, partnership between four Brazilian
media conglomerate like Globo network, Globosat, Infoglobo and SistemaGlobo de Rádio in
2015, Airbnb in early 2016 and other such commercial partnership interests (Toresdahl, et al.,
2016).
In the November 2010, Brazil closed its deal with Bradesco and BradescoSeguros, its first top
tier partner for the Rio 2016. They invested aroundUS$350 million for the domestic
sponsorship programme for taking the rights in the finance and insurance service categories
within the country. Soon in 2011, a Mexican multinational telecoms group
calledAméricaMóvil joined Bradesco companies for receiving the rights for the
telecommunications, mobile operator and cable services categories in Brazil with the help of
its three subsidiariesEmbratel, Claro and NET (Ward, 2016). These particular deals closed

their rights deals for broadcasting the event in the domestic platform while being funded by
the international organisation. The money invested for the domestic sponsorship programme
not only helped the country to reach out to its national spectators in the broadcasting format,
but they were also presented with the deals which revolved around the cable services and
mobile operators. This particular commercial interest helped in gaining monetary profits for
the country during the time of the events.
In February 2012, an automobile company called Nissan was set with the deal of obtaining
exclusive tier one rights in the automotive category (Duignan, et al., 2019). The whole
negotiations took more than six months to close the final deal as the company ensured to not
onlyprovide the committee withconsistent mix of products and services but also financial
backing to the country. The Japanese automobile organisations closed the deal by promising
toprovide 4,500 ethanol and electric-powered vehicles for the games along with opening
manufacturing plant in Resende, Rio de Janeiro by the year 2014. The company was
supposed to provide Brazil at least 5% of the market share and theRio 2016 Games were the
perfect opportunity for Nissan to achieve its target (Allen, et al., 2018). Although, they did
not made the agreement with the Nissan public, the initial goal for the country to generate
US$1.2 billion through domestic sponsorship was achieved. Nissan is an internationally
recognised automobile brand, which provided the marketing committee of the Rio 2016
Games in Brazil a fair chance to generate profits. The whole deal profited the commercial
value of the Brazil not only during the Olympic event but also for its future value and the
Nissan was planning to open a manufacturing plant in the country. This would help the
country to gain profit in further years in the automobile sector as well.
The next commercial success for the country during the Rio 2016 Games were there tie up
with thesecond tier company called Ernst & Young Terco firm that provided professional
services and support to the officals. The marketing heads of event were satisfied as they
country has already bagged best partnership interests in the top five tier company slots
(Hutchins and Sanderson, 2017). After filling out the top 5 tier slots, the committee started to
show interest in the nextcommercial preparations which would impact the event greatly. They
had an agreement with theBrasil Foods in 2013, which was the next big deal after the
committee’s collaboration with Nissan. It was also because the marketing head of the
Olympic committee for Brazil found selling the sponsorship challenging as well as difficult
in between the economic climate of the country. The country has been sectored as a
developing nation that was holding one of the biggest events held in the entire continent. The

corrupted background and foreground of Brazil created several problems for the country
while preparing for the Olympics games.
The next big top tier partnership for the country was with Correios, a Brazilian state owned
postal service. The company became the official logistics provider of the Games in Brazil as
well as many parts of the South America (Zimbalist, 2017). TheCorreios was already backing
up theseveral Brazilian sports in the nation and then it was put to be responsible for
deliveringmore than 30 million items to the Olympics and Paralympics events. The
commercial value for this deal was reported to beUS$128.4 million in cash with several other
privileges. This particular deal in the Rio 2016 turned out to be very beneficial for the
country economic development as it forecasteda Brazilian company in an international
platform. This deal also benefited the country during the Fifa World Cup as it led the official
marketing committee of the event to crack some other small scale deals in thesupply
arrangements with organisations likeEF Education First and Nielsen.
In the midst of the soccer the World Cup, the marketing committee for the Games signed
around seven deals in 30 days. Signing of so many deals in such short period of timehelped
the country to take sponsorship income for the Games to approx. RS$2.6 billion, which is
almost 85% of the total target set for the event (Rekow, 2016). The committee for the Games
closed the deal or has an agreement with several brands and organisations such asEstácio,
Technogym, CTS Eventim and 361°, a Chinese apparel company all in 2014, which further
build the commercial interest as well as programme for the country. All these deals helped
the commercial and marketing committee for the Rio 2016 Games to get recognised after
being overtly criticised for the budget concerns during the preparation of the even in the
critical stage.
By the year 2015, the marketing and commercial committee for the Rio 2016 Games
surpassed a record total ofLondon 2012 Olympics’ US$1.1 billion that it had generated from
the sponsorships (Broudehoux and Sánchez, 2016). The Brazilian marketing committee was
able to do it despite not being able to secure any deal with the some of the largest companies
of the nation and in sectors which produces the biggest games deals in Brazil. Some of the
biggest and largest supporter of the traditional sport sponsorship in the country includes few
prominent sectors like mining and agriculture firms that were missing from thecommercial
programme presented by the committee (Schallhorn, 2019). Some of the majorutility

companies and airlines also did not support the event by backing up the Rio 2016 financially
or commercially.
Next up was alliances which agreed to support the event by demanding some commercial
values in return. For example, Aliansce Shopping Centres that promised to provide at least
thousands of car parking spaces that was closer to theGames venues. However, they
demanded thein-store marketing rights for closing the deal (Grady, 2016). Then there
wasLocaliza, a Brazilian car hire company that agreed to provide a fleet of 150 Nissan
vehicles in order to assist in running the pre-Games torch relay, but their demands for the
closing of this agreement were specific branding rights for the events. Then there are deals
with TAM Airlines, TAM Travel along with the Brazilian media conglomerate GrupoGlobo
that wanted its four media companies namesGlobo network, Globosat, Infoglobo and
SistemaGlobo de Rádio to be in charge of developing themarketing activities around the
event. These deals played a major role in the whole commercial and marketing committee for
the Rio 2016 as they were the supporter level deals (Rocha, 2017). These deals were not with
the big international organisation or the first and second tier companies that will be able to
generate profits and branding values with their big investments and taxes, instead it was a
series of deals with the local and domestic companies that need to earn their profits by
demanding a support level for providing services to the event.
When the main event approached its due dates, the focus of the organisers and committee
members shifted toother aspects of the Games for generating revenue and commercial values
such as ticket sales, test events and other such things. Theorganising committee then bought
some companies to meet challenges arising in thelocal market. It was during this time
whenAirbnb made itsfirst substantial venture into sport by cracking a deal to provide 20,000
rooms for the events (Varma, et al., 2016). However, it was not enough for the Games and
the organisers shifted to sign a contract with the California based online private rental portal
for the increment in thesupply of accommodation. The Airbnb, itself provided affordable
rooms for around 380,000 foreign visitors during the peak of the Games, making the
company renowned in the Brazilian hospitality sector.
The Rio 2016 Olympic game was a historical event for Brazil as well as for the rest of the
world. Being a developing nation, Brazil was able to make Rio 2016 the richest games in its
120 years and commercial successful.This essay helped jotted down as well as analysed the
development of the commercial and marketing plan for the Rio 2016 from 2010 till 2016. It

took this country six years to crack some of its biggest deals with the largest international
companies for generating a commercial interest in the sport sector of Brazil.

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