The London 2012 Olympics were, for the most part, a success for many of the parties involved (not NBC). The city of London had good weather, an athlete without legs got to run, and the whole world enjoyed spectacular competition from more than 10,000 athletes. Let's focus on the important part of the Games, the money.

London 2012 featured some incredible performances, many of which will end up paying the athletes involved incredible sums of money (Gabby Douglas, Michael Phelps, and Usain Bolt all have large paydays incoming -- more on that next week). But instead of paying attention to the athletes, why don't we look at the sponsors of the Olympic Games and see how they performed?

Professional athletes are some of the highest paid people in the world. Yes, they even make more than bankers. Why? Because their abilities are in high demand. Athletes are needed not just by sports leagues and teams, but also by marketers, non-profit organizations, and fans. A player's pay is determined by two things, performance and personality.

The highest paid athletes are able to leverage both of these traits when signing contracts. A Tim Tebow who is atheist, shy, and mean is not worth nearly as much as the friendly religous Tim Tebow we know and love (or hate). Let's look at at Tiger Woods, earning $59.4 million last year. $55 million of that was from sponsorship and endorsements. These companies are using Tiger as an advertising campaign. Why? Because even if he is doing bad, Tiger will be talked about. Some of the largest crowds at golf tournaments aren't following the leader, they are following Tiger. His personality (which has something to do with his prior ability, and sex scandal) brings in the crowd, and the crowd brings in the money.

Andy note: Post from mid July, but still very relevant today now that the games are going on.

With the London Summer Olympics rapidly approaching, and the torch lit over 2 weeks ago, I thought it would be interesting to do some additional research on the Olympic Games. I’ve received some decent education on the subject of the business of the Olympics through two classes: Sports Economics and The Business of Sport in Europe.

During my Business of Sport in Europe course, my professors made an excellent point, ”You probably would not be studying here in Barcelona if the 1992 Olympics were held elsewhere.” Wait, why not?

Barcelona was not on the map of major tourist destinations (especially to American’s) before the Games. With the Olympics, miles of beaches, hotels, restaurants, clubs, parks, and stadiums were built. With the design of many facilities to give stunning backdrops of the city, viewers on TV got a show. The Olympics gave Barcelona a wow factor (check out photos of Barcelona’s Olympic Diving events for proof).

The cost of hosting the Olympic Games varies widely, from Barcelona’s 10-15 Billion dollar bill to Atlanta’s 2 billion to Beijing’s 40 billion. Recent estimates on the cost of the London games are somewhere around $40 billion.

But do the Olympics really create lasting economic impact?

Tonight, we will look at the different types of fans. This post will focus more on psychology of fandom and less on the economics of sports. I hope this information is new to you, and that it opens your eyes to a new way of thinking about being a fan. Most of the source material comes from class notes from the course "The Business of Sport in Europe," so I apologize for the lack of relevant articles.

What makes you, the guy in a business suit with club level seats at Madison Square Garden, different from the guys in row five, who wear varying styles of costume and paint to every game?

How do professional sports teams make money? If you think about it, teams make money from their players , from their fans, and from their stadiums. For the next three weeks, I will discuss these three topics. Today, let's focus on the most tangible of these money makers, stadiums.

Since the development of professional sports in the early 1900's, the stadium has evolved into a megalith of modern culture. Stadiums are designed to inspire, to make people say "wow." They are designed to get as much money out of our bank accounts as possible.

Is your team really losing money?

"Every year in the building we've lost money aside from last year.." Micky Arison, owner, Miami Heat.

Like the owners of a majority of professional sports teams, Arison made his money in industry, and then bought a sports franchise. The best words to describe a team owner are "business mogul." Many outsiders believe that these men bought teams to serve as toys, just something to have fun with (lets focus on NHL, NBA, NFL, MLB...not international soccer and not Manchester City). This is something that certain team owners, like Arison, would want you to believe. "This is a hobby of passion, it's not a business," Arison said. It is not uncommon for owners to claim that their team loses money in certain years (or in Arison's case, nearly every year). Would sucessful businessmen really pay hundreds of millions of dollars for an "unprofitable" franchise?

It is hard to find anyone who doesn't enjoy watching some form of professional sports. Be it Football, Hockey, Baseball, Basketball, Soccer, or Cricket (thanks to India, cricket just might be the world's 2nd most popular sport), millions of people in the US, and billions of people worldwide identify with a specific team.

These fans drive revenue. This revenue ends up paying the best players millions of dollars per year (and the "worst" $350,000, in the NFL). Despite the enormous salaries earned by players, the owners of teams reap benefits worth even more. The most valuable teams are worth billions of dollars. This series of posts will attempt to explain why. By the end of this series, I hope you can all answer questions like the ones below.

What is the most valuable sports team in the world?
What range of valuation multiples do teams typically see?
How do teams generate revenue?
Why are the Cleveland Browns worth $1 Billion if they can't even maintain positive EBITDA?

I read a very interesting article from one of my favorite bloggers, Nir Eyal, the other day. In The Morality of Manipulation Nir explores products, and the type of manipulation used to sell them.

He uses a manipulation matrix, which is categorized by the yes/no answers to two questions.
1) Will I use the product myself?
2) Will the product help users materially improve their lives?

We are nine days away from the 4th of July. The 4th is probably my favorite holiday (after my birthday, of course). Sunshine, cold beer, fireworks, and a flaming grill, four things that make any day better. So while your MD is heading to his house in the hamptons, and you are stuck in the office running comps, take a moment to daydream.

If you had the entire day, and could do anything, what would you do?

In the past few months, we have witnessed a rise in the questioning the stability of the eurozone. Much of the focus has been on Greece and the June 17th elections (which have led to more confusion). The winner of the Greek elections, pro-euro New Democracy, has the next two days (give or take) to form a coalition government. New Democracy wants Greece to stay in the euro, but it isn't that easy. Any government that forms in Greece will face a massive debt burden (~$16 Billion due in next three months), a high unemployment rate, a contracting GDP, and a populace that is struggling to meet austerity measures. There is good reason to believe that Greece will be forced to exit the eurozone in order to deal with its debt and economy. Many fear, that when Greece exits the eurozone, problems will hit larger economies such as Portugal, Italy, and Spain.

Spain is the latest in a line of countries to receive bailout funding. The June 9 announcement of a 100 billion euro bailout of Spanish banks has done little to give investors confidence. Today, Spanish bond yields rose to over 7.1%.