Fireworks explode over Maracana Stadium during the opening ceremony at the 2016 Summer Olympics in Rio de Janeiro, Brazil.
AP Photo/Felipe Dana
They go in all directions.
ZERO-SUM GAME

Corporate executives, in their own words, on the Rio Olympics’ impact on business

By David Yanofsky

The Olympic games can be a huge driver of business, in a variety of industries.

Considering the hundreds of millions of people that watch the events, it’s easy to see the opportunities. From television advertising to happy hours at local pubs, the Olympics bring in a lot of cash the world over.

But attention can also be a zero-sum game. One company’s Olympic success is likely to hurt the business of another.

Here’s what corporate executives at some publicly traded companies told investors and analysts during earnings conference calls over the last few months about the impact the Olympics would have on their businesses.

There will be a drop in new subscribers to Netflix

David Wells, CFO:

…with an assumption of a hit from the Olympics, which largely affects us in the past on gross adds or on new subscribers coming in, that that’s going to affect in terms of a year-over-year trend. We expect that to be a meaningful—small but still meaningful impact on the quarter. Negative impact.

Coca-Cola is hoping for the Olympics to turn around its business in Brazil

James Quincey, COO:

Additionally, [in] Brazil, the challenges there are well-understood and we think will continue for the remainder of the year; however, we are focusing on key affordability packages and activating a strong Olympic marketing campaign in the coming weeks and months.

Host Hotels & Resorts is expecting “spectacular” results

Gregory Larson, CEO:

Latin America drove much of the international growth with the constant dollar RevPAR increase of 5%, primarily from continued pre-Olympic business in Rio. Due to the upcoming Olympics this summer, we expect Latin America to have a spectacular third quarter.

Discovery Communications moved Shark Week to accommodate the Olympics—and got bit

David Zaslav, CEO:

Well, first, Shark Week was down this year…Part of that I think is, we made a mistake. We moved it too early. We did it for two reasons. One, we wanted to get out of the way of the Olympics and two, we thought it could be helpful to us to align with the July 4 weekend, but I think in retrospect, doing a lot of the research, I think that it was too early.

Andrew Warren, CFO:

The Olympics, as they always do, suck advertising dollars out of the market.

American Airlines will get a Brazil bump

Scott Kirby, president:

Well, usually the Olympics, World Cups, conventions are a negative for revenues because business travelers just stay away because they can’t get hotels, because they’re worried about the crowds. And so business travel dries up. We’ve seen that in all the other Olympics. We’ve seen that at the World Cup. In this case, Brazil is so bad that there is no business traffic or close to no business traffic. And so, this year, I think it will be a positive just because Brazil has fallen so much before.

But there’s no beer-bottle bump for Owens-Illinois … because the drinks are coming in cans

Andres Lopez, CEO:

Yeah, when we look at the Olympics, we don’t expect a major change in position of demand in the country. Normally in Brazil, normally, what happens is because of the short-term nature of this, the overflowing demand goes to cans, and that’s what happened with the World Cup, too.

Fogo de Chão’s sales are getting beefy

Anthony D. Laday, CFO:

Brazil comparable sales posted a 2.3% increase…the increase was driven by the strength in the Rio market, where we have benefited from an increase in tourism, and the halo effect of the Olympics, driven by pre-planning events.

Under Armour has upped its game in Rio

Kevin Plank, chairman and CEO:

Our presence will be significantly higher than it was in London in 2012, with four times as many athletes representing national governing bodies from more than 30 different countries competing in Under Armour apparel or footwear, and in some cases, utilizing our great Connected Fitness platform to measure their performance.

In addition, we sponsored some of the visible icons in Rio like Michael Phelps, recent Wimbledon champ, Andy Murray, and the U.S. gymnastics team. We also have a great story in Olympic gold medal winner, Natasha Hastings, who will be running the 400 this summer in Under Armour footwear.

Comcast is expecting a lot more advertising money

Stephen B. Burke, NBCUniversal CEO:

Think of what someone gets when they advertise in the Olympics. We have three times the combined ratings on any given night during the Olympics of ABC, CBS, and Fox. So that kind of appeal, if you’re marketing an automobile or a beer or a car, it’s just a tremendous value proposition

So, for the first time since we’ve been here, we hit our advertising budget for the Olympics three weeks before the start of the Olympics. Normally we would hit the budget right about the time the Olympics started or shortly thereafter. And our budget was about a 20% increase from London. So we’re very, very happy with how we’re doing in terms of Olympic sales.

We made $120 million or thereabouts in London, and we are going to make a lot more than that in Rio.

HBO parent Time Warner is shelving original shows until the games are over

Howard Averill, CFO:

At the same time, we’re going to air significantly fewer hours of original programming across our domestic entertainment networks, and that’s partially an effort to stay out of the way of this year’s summer Olympics. The third quarter is also our lightest quarter for sports inventory.

At local TV-station owner Tegna, there’s no risk in carrying the olympics

David Lougee, president Tegna Media:

What we find is the more news and noise about the Olympics, all it does is raise the interest and there’s been nothing to scare away advertisers.

Gamers might play more Electronic Arts games

Blake Jorgensen, CFO:

In terms of the Olympics…I think oftentimes, if there are sports going on that we have games associated with, there’s a lot of positive. As you see with the FIFA Ultimate Team, numbers relative to the Euro and the Copa America. We didn’t have programs directly linked to those, but people engage in those because their favorite players are playing on new teams or in new tournaments and that drives them in. So I think in general, athletics bring people back to athletics. If they’re watching on TV, they’re oftentimes going to try to imitate that somewhere else and that may benefit some of our games.