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February 12, 2022

Will this Olympic index deliver gold?

The eyes of the world will turn to Vancouver tonight to see who comes home with the gold.

But long before the top athletes hit the podium, it looks like the major sponsors of the Games are already coming out way ahead of the pack.

If you’d like to join them, keep an eye on the Dow Jones Summer/Winter Games Index, a collection of publicly traded partners, sponsors and suppliers of the Vancouver Games. 

While the event may be global, the current index is anything but. Having dropped the Chinese names that drove it leading up to the Beijing Games, the index is now heavily tilted towards North America, with roughly 60 per cent allocated to the U.S and 30 per cent to Canada. 

But does it make money? Well, so far it has. As of today, the index is up 36 per cent since December 2008, when it was modified to reflect the Vancouver 2010 Games.

And there’s lots of research to suggest that sponsorship of big sports events like the Olympics can pay off when done correctly, says John Davis in his book, The Olympic Games Effect.

But the problem for major sponsors like NBC -- which paid $820-million for the rights to broadcast the Games in the U.S. -- is that they negotiated their deals when the economy was humming, points out MSN columnist Michael Brush. On the upside, he acknowledges, major sponsors will get to use the Olympic rings in advertising for years.

Looking back, the economic impact of the Games seems to come primarily from the lead up to the big event, tailing off a bit after the initial 10 days – which suggests that the smart money may be selling on strength during the next couple of weeks.

Do you see the Olympics having any impact on your portfolio?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...