Time zones and money — Why the next three Olympics will be held in Asia

The 2016 Olympic games in Rio have gone very well for the United States so far. Michael Phelps has beaten his own record as the most decorated Olympian. Simone Manuel won the first gold medal for an African-American woman in swimming. The US is dominating the medal count, and even NBC is having a record breaking year.

This is great for everyone back home in the US who has been watching the games live, but not so great for everyone in Europe who hasn’t been staying up to watch the prime-time events. What then, is the best location to host the Olympics? There are many ways to answer this question. An athlete centric view would try to minimize the travel time of all of the athletes globally, or favor whatever country is able to produce the best facilities. From a sustainability perspective, the games should never rotate between cities, but should instead reuse facilities year-over-year. However, as much as what happens on the Olympic podium matters, what really influences the world and guides the Olympic movement is dependent on how many people are watching at any given point in time and how willing advertisers are to pay fees that further fund the Olympics. If you start optimizing around this set of variables, you begin to understand why the next three Olympics are headed to Asia.

The Olympics are a live event. As much as replays matter in the Olympic world, few people are going to seek out the early swimming heats to watch over and over again. To put it simply, time zones matter, and maximizing prime-time viewership is key. The following image shows the distribution of the global population by approximate time zones[1], with the darker shades of blue representing a larger share of the global population.

Population distribution by approximate time zone (Source: CIA World Factbook)

Unsurprisingly, the time zones that contain China and India contain the highest concentration of the world’s population. This is one of the main reasons that the next three games (Pyeongchang, Toyko, and Bejing) will be held in East Asia, however it is not the only reason. India would act as a fantastic population bridge between Europe and East Asia, potentially maximizing the live viewership. Surprisingly though, India is not even in the running to host the Olympics any time soon.[2] However, if you take the same filter and look at the world GDP by time zone the picture makes more sense.

GDP distribution by time zone PPE (Source: IMF)

Because India has a much lower GDP per person, the time zone actually has a much smaller advertising potential. While the US is still the world’s largest economy, its output is spread out over four time zones as opposed to the one standard zone in China.

The IOC undoubtedly looks at both of these charts when making a decision about where to locate the next games. By locating the next three games in Asia, the games will be able to maximize their exposure and revenue. For those of us located in the western hemisphere, let’s make sure to enjoy the rest of these games. It will be a long time before they’re back.

[1] There are actually 27 unique time zones in the world. For simplicity, time zones were rounded. For example, the majority of India maintains a time zone of +4:30 UTC. This zone has been rounded up to +5:00 UTC.

[2] There are many reasons for this, not least of which is a recent corruption scandal among the India Olympic Association.