① For the Centennial Olympics itself and the market participants involved, this year's Paris event was an important “gamble”; ② Faced with heavy pressure, the organizers were quite bold in their design, and global companies from all walks of life also increased their investment; ③ Obviously, not all bets paid off, and so did investing in the Olympics.
The 2024 Paris Olympics are about to be unveiled, and the world is focusing not only on sporting events, but also on economic opportunities. This series will explore the impact of the Olympics on the economy, uncover the clues behind the Nuggets Olympics, and witness the glorious moments of Paris together.
Financial Services, July 23 — Earth's civilization, where political, economic and social differences have continued to expand in recent years, will welcome a positive sign on Friday — the official opening of the 2024 Paris Olympics. Due to the popularity of the Olympics themselves, compounded by the fact that the current Olympics have returned to the gold level in Western countries after a lapse of eight years, companies around the world are planning to expand their investments in order to receive the glorious blessing of the Olympic Games.
Although there is some preliminary information that the tourism industry in Paris, the host city of the Olympics, is not showing a “full” boom, as the event slowly unfolds, a wider range of positive economic effects are gradually showing.
Questions Paris needs answers
The Paris Olympics represented an important watershed. After the 2016 Rio Olympics in Brazil, counting the Winter Olympics, the next three Olympics were held in Asia. The reason for the time difference has also caused consumers in some regions to continue to lose interest in the Olympics.
Take the US market as an example. The National Broadcasting Corporation (NBC) has the right to broadcast the Olympics in the US until 2032. During the Tokyo Olympics three years ago, primetime ratings dropped 27% compared to 2016. The TV broadcasting rights agreement has been an important source of revenue for the IOC for many years, but this huge amount of money has not always been secured.
The TV station still lacks a clear judgment on this situation: is the audience not interested in traditional Olympic events? Or is streaming dampening TV ratings? Or is it just the impact of the pandemic?
Because of this, this heavy questioning prompted Paris to take a series of bold steps, including moving the opening ceremony to the Seine. Skateboarding, 3v3 basketball, and breakdancing, which were newly added to this year's Olympics, are all scheduled to be held at the famous attraction Concorde Square.
At the same time, as the IOC changed the way it bids for the Olympics in recent years, the Paris Olympics will be a turning point — most of the next 6 Olympics/Winter Olympics (Paris, Milan-Cortina, Los Angeles, French Alps, Brisbane, and Salt Lake City) will be held in European and American countries. Looking at the 2036 Summer Olympics now, it is possible to return to Asia.
At the same time, the ancient Olympics are also undergoing a new transformation and challenge — in mid-July, the International Olympic Committee and the Saudi Olympic Committee announced that they had reached a 12-year agreement to host the first e-sports Olympics in 2025.
(Source: International Olympic Committee)
Therefore, Paris bears the heavy responsibility of “making the Olympics special again.” From IOC officials to advertisers, TV broadcasters, and social media companies eager to try it out, they are pinning their hopes on the next few weeks. If Paris were to “live” like this, it would not be able to arouse the enthusiasm of the spectators for the Olympics, and the pressure on the successors would only increase.
Global companies step in
As the Paris Olympics gradually take over the focus of public opinion over the next few days, it is naturally also the focus of the efforts of leaders in all walks of life around the world.
US media giant and Olympic copyright broadcaster NBC Global announced in April this year that it will raise the premium subscription program for its streaming platform by $2/month — starting July 18, the subscription fee for premium members (which still need to watch ads) will increase from $6/month to $8/month, and the more advanced subscription plans (which basically don't need to watch ads) will increase from $12/month to $14/month.
Compared to traditional live streaming, NBC Global also emphasized that celebrities, social media influencers, and generative AI content will also be introduced this year to attract users who don't watch live broadcasts and prefer to watch online videos.
$Alphabet-A (GOOGL.US)$Its streaming platforms Youtube, instant messaging apps Snap, and TikTok are also investing heavily in the Olympics to organize creators to go to Paris to launch “first-person” coverage. This strategy has become a “hot trick” in the global content market. Executives of these platforms believe that even if today's young people don't watch TV, they still have a strong interest in the Olympics.
On occasions like the Olympics, too$Nike (NKE.US)$,$Coca-Cola (KO.US)$,$Procter & Gamble (PG.US)$A “must-fight place” for sportswear and FMCG manufacturers.
Soft drink giant Coca Cola announced that it will host events centered around the Paris Olympics in more than 70 cities around the world, using pop-up stores and other forms to attract consumers.
Faced with the “encirclement” of emerging consumer brands, Nike, which had to plummet once in recent quarters, revealed that the company's spending on the current Olympics has reached a record high and is looking forward to reviving revenue. As one of the world's largest advertisers, P&G's promotion focus this year will also shift from the “P&G” brand to Pampers diapers, Gillette shavers, and Blue Wave detergent.
Bed and breakfast rental platform$Airbnb (ABNB.US)$(Airbnb), on the other hand, said that the company's supply in the Paris market has increased by 40% and has seen a sharp increase in bookings during the Summer Olympics. Travel platforms$Uber Technologies (UBER.US)$In order to cope with traffic pressure during the competition, a “boat calling” service was launched in partnership with a cruise on the Seine. Users can also book a one-day tour with champagne tasting on the “Uber Bubble” platform.
Also focusing on the Seine are financial institutions.$JPMorgan (JPM.US)$Its subsidiary Chase Bank (Chase Bank) and payment giants$Visa (V.US)$Together, they set up a floating lounge on the Seine for high-end credit card holders. Similar to an airport lounge, cardholders can enjoy French cuisine, live music, and Olympic views on both sides of the Seine. Financial institutions also believe that as cardholders actively display “Paris benefits” on social media, they will attract more people to apply for this credit card with an annual fee of 550 US dollars.
Other than those companies that are strongly associated with the consumer scene, a series of Olympic suppliers may not be that prominent, but they are also beneficiaries of the Olympic cycle.
France-based Atos (Atos) has been a technology partner of the International Olympic Organizing Committee for the past 20 years — providing IT software, cybersecurity services and cloud services. According to estimates, in addition to showcasing technology, the contract value for Olympic network operation and security services will reach tens of millions of euros. Of course, compared to last week's$CrowdStrike (CRWD.US)$In the event of an IT failure at the scene of the incident, Yuanxun's stock price will inevitably be affected.
French power battery manufacturer Forsee Power is also gaining prominence in this Olympics, along with Japan$Toyota Motor (TM.US)$The partnership provided nearly 250 short-haul shuttle buses to be used as the main shuttle vehicles in the Olympic Village and competition venues. Compared to revenue, the main significance of the Olympics is to provide the company with a platform to showcase its ultra-thin modular battery technology.
The Olympic concept reflects China's capital market
For the Chinese capital market, which is thousands of miles away, the Olympics will also be a market hotspot with a high degree of certainty in the next few weeks.
GF Securities said in a report released in early July this year that from a transactional perspective, sports footwear industry leaders (in short-term deals) had a higher winning rate during the Olympics over the years. In the long run, the Olympics are also expected to drive a national fitness trend, which will also help industry leaders with better technology accumulation and cost control to gain a higher market share.
Similar to foreign companies, domestic sports brands are also expected to achieve brand exposure through the Olympic window, further increasing attention and short-term sales. For example, during the current Paris Olympics, Anta continued to provide prize-receiving equipment for Chinese athletes.$LI NING (02331.HK)$,$361 DEGREES (01361.HK)$They will also perform in Paris, and the Chinese national breakdancing team and the national golf team will use them separately$XTEP INT'L (01368.HK)$,$Biem.L.Fdlkk Garment (002832.SZ)$equipment.
Not everyone who comes with the “Olympic concept” can benefit
From a global perspective, most industries closely related to the Olympics can reap a wave of “Olympic dividends” to a greater or lesser extent. However, there is a special situation this year — due to Paris' concept of hosting the Olympics in deep integration with the city, concerns about on-site traffic, prices, etc., it has also caused many international travelers to have a cold attitude about going to Paris to watch the games and travel.
The tourism department of the city of Paris expects the Olympics to attract 11.3 million visitors, but only 10% of them are from abroad.
Because of this, popular competition concept stocks such as shipping and hotels seem to have fallen to a low point this year. According to media reports last week, global travel data providers$CoStar (CSGP.US)$According to statistics, the occupancy rate of Paris hotels during the Paris Olympics was only about 80%. Compared horizontally, the occupancy rate in London in 2012 was 90%, while the occupancy rate in Rio 2016 was 94%.
According to the luxury travel company BlackTomato, the number of reservations to Paris this summer has decreased 15% year over year.
Carolyn Addison, the company's product director, said that the company has a large number of orders from customers who need to participate in the Olympics, and for those who are just traveling, the price increase and minimum occupancy requirements make them hesitant. Even within France, Provence or Nice are more popular with travelers than Paris.
More intuitive alerts come from the airline. Air France (Air France KLM Group), the “official partner” of this year's Olympics, has warned that since visitors seem to actively avoid plans to go to Paris during the Olympics, the company expects to face a negative revenue shock of 0.16-0.18 billion euros during the fiscal season from June to August this year, and it is expected that the shortfall will quickly recover after the Olympics end.
USA$Delta Air Lines (DAL.US)$It has also been warned that the company could lose 0.1 billion dollars due to tourists “actively avoiding Paris.”
edit/emily