Television revenue is the biggest contributors to the host city's total revenue and has enjoyed steady growth over the lifespan of the Winter Olympics. Host countries are entitled to approximately 60% of the television rights fees according to Denis Oswald of the IOC Executive Committee. Selling the rights to the broadcast produces enormous profit and, as technology has developed, broadcasting has been able to reach increasingly large television audiences. In the IOC's
Olympic Marketing File from 2014, the broadcast revenue is given for each of the Winter Olympic games since 1960 in Squaw Valley.
The revenue is given in millions of US dollars and represents the total worldwide network commitment of rights fees. These fees include both cash and technical service components. Lillehammer, in particular, saw $352.9 million in revenue. It is important to note, however, that the service components are typically defrayed by the host nation (paid by the country not the television network) and that the broadcast revenue is not always paid in lump sum and can be divided into payments designated in long contracts with the television network.
Using the data from before the Sochi games, I created a short-term forecasting model using Holt's method to identify any trends in the data and forecast Sochi's eventual revenue. Below is a graph comparing the observed and forecasted data points in each city since 1960. The broadcast revenue enjoyed a spike for coverage of the Sarajevo Games in 1984, kickstarting an exponential growth trend that continues today. This growth is probably due to increased numbers of viewers because of rising broadcast technology. My model predicts $1.257 billion in broadcast revenue for Sochi and judging from the graph, that number will probably be a slightly lower than the observed value for 2014.
*The actual broadcast revenue figure for Sochi ended up being $1.26 billion which was slightly higher than my model's estimate but extremely close.
