Innovation in the Context of World Sports Development

Abstract

The imminent development of competition system has determined over time a shift from amateur sport, practiced by passion and for health reasons, to the promotion of its professional component. But throughout the centuries, changes have been essential. Innovation is one of the actions that have marked the development and transformation of world sports in general and Olympic Games in particular. The types of innovation found in the organization, equipment, technology during more than 100 years are: product innovation, process innovation, market innovation, organizational innovation. As regards sports at a global level, innovations in the timekeeping system in different disciplines (athletics, swimming, horse riding, skiing, biathlon, cross-country skiing, bobsleigh, luge, skeleton) have determined the ranking order to be decided by thousandths of a second, and the cases of ties among many competitors to become very rare. Research conducted in great laboratories of the world to change materials used on the competition grounds (from the athletics track, the floor and the vaulting table in gymnastics to the system of freezing the tracks of bobsleigh, luge, skeleton) has led to achievement of performances thought to be impossible one century ago. Studies have been made about the effect of modern equipment on sports performances, and research in the field has become even more important than the talent of an athlete. In this study based on bibliographical research, we are trying to demonstrate that innovation in the TV broadcasting field has provided global population access to information, having a direct contribution to promoting sports.

Keywords: Sports, innovation, Olympic Games, TV broadcasting

Introduction

Regarded as a global phenomenon, sport has a huge impact on the entire human life. Throughout the

ages, it has exerted an influence on both the social or cultural and economic planes. The imminent

development of competition system has determined over time the shift from amateur sport, practiced

by passion and for health reasons, to the promotion of its professional component. But throughout the

centuries, changes have been essential. Sport has become one of the characteristics of contemporary

life, “an extremely important manifestation of modern world” (Kirițescu, 1964: 478). Moreover, sports

values, besides being characteristic to physical activity field, also bear other specific types of values:

economic, theoretical, professional ones, and not only (Epuran, 2013: 44-45).

Major changes have also been triggered by the initiative of Pierre de Coubertin to revive the Games

in 1896, the Olympic contest starting from what the Olympics represented in ancient times and current

reality. This spectacular evolution hugely depended on innovation, an action that has marked over time

the development and transformation of world sports in general and the Olympic Games in particular.

According to the Agencyof Intellectual Property in Romania (AGPITT), innovationrepresents a

sequence of activities carried out by a company in order to develop new products and services intended

for sale. At the same time, the category of innovation processes also includes the activities aimed to

expand the markets, improve the supply functioning, production processes, equipment maintenance,

distribution channels, services and, last but not least, perfect administrative and managerial activities of

the company” (Bogdan, 2003).

In this study, the “company” is represented by all entities involved in the organization of

competitions, development of sport or technologies used in this field.

The types of innovation found in the organization, equipment, technology during more than 100

years are:

Product innovation; Process innovation; Market innovation (implementation of new marketing methods that involve significant changes); Organizational innovation (Bogdan, 2003).

In terms of technology, for all disciplines in the Beijing Olympics programme, computerized means

were used for timekeeping and providing scores, rankings, etc.

The 2012 Olympic Games were the first “digital Olympics”, viewers having the opportunity to

watch live the sports events on iPads and smartphones. In 2010, just before the Vancouver Winter

Olympics, Steve Jobs announced the iPad launching. Within the next two years, progress was rapid and

about 1 of 5 viewers in the United States watched the Olympic Games on the computer, laptop or

tablet. Before the start of 2012 London Olympics of 2012, BBC advertised on the possibility to watch

interactively and live 2,500 hours of Olympic broadcasting. On some days, the variety was so great that

one could choose among 24 different sports events. Due to some applications downloaded on

smartphones, it was possible to receive in real time the result of a competition or the newest

information. For the media, web pages presenting sports, athletes or participating countries were made

available (Basulto, 2012).

Innovations in the timekeeping system in different disciplines (athletics, swimming, horse riding,

skiing, biathlon, cross-country skiing, bobsleigh, luge, skeleton) have determined the ranking order to

be decided by thousandths of a second, and the cases of ties among many competitors to become very

rare. Research conducted in great laboratories of the world to change materials used on the competition

grounds (from the athletics track, the floor and the vaulting table in gymnastics to the system of

freezing the tracks of bobsleigh, luge or skeleton) has led to achievement of performances thought to

be impossible one century ago. Studies have been made about the effect of modern equipment on

sports performances, and research in the field has become even more important than the talent of an

athlete. The countries where research is at a very high level, where substantial investments are made

(Germany, the United States), are also the countries whose athletes dominate the international

competitions. In the following lines, we shall strictly refer to innovation in the TV broadcasting field.

Innovation and television rights

According to Epuran (2013: 268-269), television has destroyed the sport, turning it from an art into

a circus, in the same time with its increasingly higher audience at a global level.

We agree to the opinion mentioned, relying on several statistical data. If in 1912, at the Stockholm

Olympics, 500 journalists were accredited, information being exclusively provided by newspapers and

magazines, the beginning of their recording and broadcasting to different environments dates back to

1936. The Berlin Games, where the Olympic flame was first lit, did not represent only the topic of a

movie directed by Leni Riefenstahl, “Olympia”, but also the competition where, for the first time, live

images of a large multi-sport event were filmed and broadcast by a closed-circuit television network.

Twelve years later, BBC had a live broadcast at Wembley Stadium, but it covered only the London

area. The Organizing Committee requested the sum of 1,500 British Pounds to broadcast the event.

The 1956 Winter Olympics organized in Cortina d’Ampezzo, Italy, was the first edition of the

Games to be broadcast to an international audience. But in Melbourne, Australia, many broadcast

networks from the United States and Europe boycotted the competition, pretending to be exempt from

fees just as radio broadcasts and newspapers, because it was about news, not entertainment. Under

these circumstances, the International Olympic Committee (IOC) has established new rules, through

which the Organizing Committee can sell the rights with the IOC agreement. And from then until now,

the progress of technology has been unimaginable.

Table 1 illustrates some moments that have marked the history of Olympic television broadcasting.

In 2011, the American NBC television network signed a $4.38 billion contract with the IOC to

broadcast the 2014, 2016, 2018 and 2020 Olympics, being by far the most expensive television rights

in the Olympic history. The Japanese Consortium, which includes NHK (Japan’s national public

broadcasting) and the Japan Commercial Broadcasters Association, bought the rights to broadcast the

2014 Sochi Olympic Games and the 2016 Rio de Janeiro Olympic Games on all media platforms,

inclusively on the television, internet and mobile phones.

In the last 50 years, the broadcast rights fees have increased due to latest technologies in the

exponential media field. If in 1960 television provided only 1 of every 400 dollars of the cost for

hosting the Summer Olympics, in 1972, in Munich, 1 of 30 dollars was from television, in 1980, in

Moscow, the ratio was 1 of 12 dollars, and in 1984, in Los Angeles, 1 of every 3 dollars of the Olympic

host costs were paid for from the television revenues (Real, 2014).

The rising cost of broadcast rights constrains the televisions to recover their expenditures through

commercial agreements: the higher the audience level, the larger the sum stipulated in the respective

agreements. In its turn, the audience level is high when performances are increasingly better and try to

reach the human limits.

As the television role has increased in the worldwide sports in general, but particularly in the

Olympic broadcasting, the number of professional athletes on the Olympic scene has also increased

and at the same time the doping phenomenon has been escalated. And even if, in 1980, the IOC

President, Juan Antonio Samaranch, stated that he would never tolerate commercialization of the

Olympic Games, which would remain the only sports event in the world with no advertising in the

stadia or on the athletes’ vests, the IOC Marketing Department created the legal framework for this by

founding, in 1982, The Olympic Partners (TOP) Programme that, in cooperation with the International

Sports and Leisure (ISL) Consortium headed by Horst Dassler of Adidas, started attracting sponsors

who contributed with large amounts to support the IOC. For instance, in Barcelona, sponsorships

accounted for 30% (more than $120 million) of the total budget and the television rights accounted for

28%. Four years later, in Atlanta, sponsorships represented a historical record, exceeding the sum of $1

billion (Real, 2014).

In Lillehammer, in 1994, broadcast and marketing programmes generated more than $500 million,

an amount of money that broke almost every major marketing record for a Winter Olympics, and 6

years later, in Sydney, domestic sponsorship programmes generated even more revenue ($492 million

extra money) than in the 1996 Atlanta Games, where it was 15 times lower. The increase was

exponential compared to the 1952 Helsinki Olympics, for example, where some local companies

provided goods and services to the participating athletes (International Olympic Committee, 2014b).

Table 2 highlights the cost evolution for the television broadcast rights in North America and

Europe, the two continents with the greatest number of viewers, as well as the expense ratios compared

to overall costs.

In 1971, a paragraph has been added to the Olympic Charter, stipulating that only the IOC can

negotiate with television operators (International Olympic Committee, 2014a; Pena, 2014). The first

consequence was that this allowed the IOC to raise revenue from television broadcast rights by 10% up

to 1980, the financial evolution having an upward trend until today.

For the amounts invested, sponsors claim not only the right to use the Olympic symbols, but also to

be associated with the world sports stars. If in 1912, in Stockholm, the Amateur Athletic Union decided

to withdraw Jim Thorpe’s amateur status retroactively and later that year the IOC decided to strip

Thorpe of his gold medals for pentathlon and decathlon and declare him a professional, since 1973,

with the Varna Congress, a new modern era of the Olympic Games has started. The IOC President,

Lord Killanin, endorsed the decisions of the Congress participants and, from that moment on,

professional athletes have been given free way to win Olympic medals. Excluded from the 1924

Olympics programme, tennis has returned in 1988. In Seoul, Steffi Graf has become the first and until

now the only female tennis player to win the “Golden Slam”, by adding the Olympic gold to her

collection of 4 Grand Slam titles won during the same year. In 1992, the NBA basket players

participated in the Barcelona Games, and Earvin “Magic” Johnson, Michael Jordan and their

teammates won the Olympic gold for the Unites States. Discussions about professionalism in sport

were existing long time before that period, the athletes from socialist countries being considered

professionals due to their status: they were practicing performance sports, were employed on other

positions and were receiving salaries, their duty being to get trained, participate in competitions and

win medals. With the Olympic television broadcasting, the role played by the financial component has

increased and finally has become extremely important. Fabulous awards and advertising contracts have

appeared and the top athletes could “sell” their image. The increasingly larger amounts invested and

the desire for achieving performances have triggered research in the field of sports equipment and

materials, but also of medications and technology used to enhance performance or for the promptest

recovery possible.

Perspectives in the field

In the last half century, an interval that definitely covers the period to which we are referring in this

paper, the role of media in general and of television in particular have increased exponentially. There is

a bi-univocal connection between sports and television. Due to sports, new TV channels have been

launched, some of them specialized in this field, subscriptions to cable television have increased in

number and satellite sales have been influenced too. In its turn, television has contributed to increase

revenues generated by sports, meaning that stars from diverse disciplines, especially football, athletics

or golf, have become millionaires thanks to their advertising contracts. Selling the rights to broadcast

some sports events has determined the clubs, the organizations (inclusively the IOC and SportAccord,

to which we make special references in this paper) to correlate the starting time of a competition with

the programme of the television that has negotiated the rights, to change the athletes’ equipment and to

adapt advertising packages to the typical features of each competition (Andrews, 2000: 140-141).

Given that the costs of the Olympic Games have continuously increased, as well as those related to

producing and broadcasting the competitions, it is interesting to see where this will go to, under the

conditions in which, on the world market, a SportAccord “player” who has reached maturity tries to

attain the IOC prestige and globalization. At the same time, the desire for performance maximization

has determined the expansion of professionalism in almost all sports disciplines. Both organizations

allow professional athletes to compete in the events organized under their auspices (SportAccord,

2014; International Olympic Committee, 2013).

While, at the Olympics, the IOC awards only medals for the achieved performances (financial

incentives coming from advertising contracts and government funding), SportAccord intends to

organize, in 2017, the first edition of the Reunited World Championships, where the athletes will be

awarded, besides the trophies, substantial cash prizes.

At the press conference organized on 15 April 2013, Octavian Morariu, former President of the

Romanian Olympic and Sports Committee, a permanent IOC member, declared that between the

International Olympic Committee and SportAccord there is no competition, but synergy. As the

Olympics keep remaining the biggest sports event, SportAccord, together with the Association of

National Olympic Committees, tries to occupy niches that are not covered by the Olympic sports and to

lead thus to a global sport. There are new sports embodying the youth’s aspirations, there are variations

of the Olympic sports, and the IOC cannot encompass all of them. The IOC remains the coordinator

and leader of the Olympic and Sports Movement at a global level, but one should take into account the

world’s evolution and the fact that two strong organizations come to support the IOC, to cooperate and

encourage the development of sport (Morariu, 2014).

The rights to broadcast the Olympics represent the main funding source of the Olympic Movement,

being an important part of a system that involves the broadcasters, the sport’s sponsors and also the

IOC. Their commercialization during the last three decades has played a major role in the development

of modern Olympic phenomenon.

It is interesting to see how the market will evolve, in terms of television rights, given the emergence

of New Media and the global expansion of the internet (Pena, 2014).

Although the amounts paid for the exclusive ownership of the television rights increased more than

1,000 times in the period 1972 to 2008, in the near future it will be more and more difficult to stop the

online distribution of images from the most important sports competitions organized globally: the

Olympic Games and the World Football or Athletics Championships (Andrews, 2000: 140-141).

Discussions and conclusions

The history of Olympic Games reveals that these sports events present the highest interest for the

media, their implications being equally economic, social, cultural and, last but not least, political. We

tried to demonstrate that the television development has provided global population access to the

Olympics, directly contributing to promoting sports.

It is to interesting to see how the IOC will manage to “mediate” between the television rights

holders, who pay large amounts to broadcast the Olympics, and the increasingly large opportunities for

the youth to access New Media, in their interest. The questions that arise are: where will the television

broadcast rights go to, in financial terms, and will there be a winner in the dispute between the athletes

and the economic factors?

As long as the competitions organized under the sign of the 5 circles continue to involve tens of

thousands of participants, there will certainly be cities willing to bid for hosting the Games in the

future, normally in the context of innovation and sustainable development.

Even if the organizers of the Montreal 1976 Olympic Games finished to pay their debts only in 2011

(35 years later), the financial or image-related success of other editions have encouraged the

politicians, mayors or sports people to wish to organize the most important competition on the planet:

the Olympic Games. Almaty and Beijing have already bidden to host the 2022 edition of the Winter

Olympics and next year the cities for the 2024 Summer Olympics will enter the scene. From the

research made by now, but also from the experience of the journalist who effectively participated in

four editions of the Games (Sydney, Beijing, Vancouver and London), we agree to both the

conclusions of Alice Wnorowski (2011), who thinks that the bids to host the Olympics represent a

success, even if the respective city (country) does not win the right to organize the event, and of Jill

Haynes (2001), who considers that the Sydney Olympics represented a social and economic success,

the results achieved by Australian athletes also contributing to it.

As a future research direction, we aim to approach the expenditure structures of the Rio Olympics,

by taking into account that partial investments have already been achieved for the organization of the

2014 World Football Championship, as compared to Barcelona 1992 or London 2012. At the same

time, we want to see if the Olympic Games in Rio are to be organized in accordance with sustainable

development and innovation, considering that the economic crisis has reduced the budget of the

organizing committee by 30 percent.

Acknowledgements

This paper has been financially supported within the project entitled “SOCERT. Knowledge society,

dynamism through research”,contract number POSDRU/159/1.5/S/132406. This project is co-financed

by European Social Fund through Sectoral Operational Programme for Human Resources

Development 2007-2013,”

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