Back of the Envelope: How Much Might Scientology Spend on Winter Olympics Ads?

Earlier today, Tony Ortega posted an article about Scientology’s plans to air advertising in the Tampa market during the 2018 Winter Olympics.  We do a quick back-of-the-envelope estimate of the amount that Scientology will spend and the size of the Scientologist audience that cult leader David Miscavige hopes to impress. Spoiler: unsurprisingly, it’s a costly boondoggle.

This post is an example of what may develop into a series of quick analyses of narrow facts. The proverbial back-of-the-envelope estimate is the result of applying a lot of different techniques to quickly assemble a directionally correct estimate to support a decision that needs to be reached quickly. Of course, it’s less precise than the result that can be achieved with a week or two of focused work.

If this turns into a series, we’ll use a ground rule for a back-of-the-envelope analysis as 30 minutes for research and writing the initial draft, to show how much you can find out fairly quickly.  I hope you’ll enjoy learning about the thought process so you can use it in your own life, as well as gaining greater perspective on the subject.

Overall Winter Olympics Advertising Spending

NBC has said that it expects $1.4 billion in ad revenue from the 2018 winter Olympics.  It says that this number should be slightly ahead of the spending from the 2014 games in Sochi, Russia, which were not terribly popular, due in part to the comedy surrounding the preparations for the site.  In other words, it’s not going to be a huge victory for the network, which is locked into a multi-decade deal at a time when ratings for sports programming are in a state of long-term decline.

It’s important to note that the NBC numbers are for network ads, and don’t include figures for local spots, where local affiliates get most of the money. I’d estimate that this would generate another $600 million in ad spending, based on an assumption of 30% of ad slots reserved for affiliates, but at a higher rate than the discounted rate that large advertisers would pay the network for multiple insertions and for making “upfront” purchases years ago.

There’s a hint in Tony’s article that some local markets are trying to scrounge up advertisers to fill local slots, as evidenced by a tweet from a Denver ad sales rep reaching out to the cult to do a similar deal in his market.  I wouldn’t expect Scientology to take up the NBC rep on his kind offer, as there are probably fewer than 100 Scientologists in the Denver media market.

If the Denver ad rep’s tweet is evidence that ad sales are soft, I’d expect the network (and the affiliates) to price Olympics slots at full price but give significant discounts out the back for future insertions on other programming, in order to keep Wall Street from bombing the stock of NBC parent Comcast on fears that Olympics-related revenues will fall short.  The point is that I think ad rates are going to be stable for the Winter Olympics, even if demand is soft, and that the $2.0 billion ad spend estimate is reasonably solid; that number is the foundation of the estimated spend for Scientology’s campaign.

The Tampa metro area has a population of 3.0 million, according to recent census estimates.  To get the size of the media market including the rural areas outside the core metro area, let’s assume another 1.0 million people.  That 4.0 million population is almost exactly 1.25% of the US population of 322 million.  Thus, the total ad spend to reach the Tampa market during the winter Olympics is about $25 million.

Scientology’s Potential Ad Bill

NBC has scheduled 176 hours of prime time coverage over the 21 days of the games.  I’d expect this to be the focus of Scientology’s advertising.  There are also several hundreds of hours of less popular sports (biathlon, luge, etc.) on NBC Sports Network and more on CNBC.  They’re also promising 1,800 hours on streaming/internet, so no one need worry about missing any of the Croatian curling team’s matches.

If we assume that there are going to be 6 minutes per hour of advertising (consistent with the number of minutes on a prime-time sitcom), you’re looking at an average spend per spot in the Tampa area of about $23,000 per minute.  If they’re broken up into 30-second spots, you’re looking at something closer to $15,000 per 30.

Thus, if Scientology advertises once per night on a 30-second spot, they’re looking at an ad bill of around $300,000; with 60-second spots, that number jumps to around $500,000.  That will be substantially higher if they bid for premium spots, such as during the opening ceremonies, figure skating finals, etc.

The Impact of that Spending

In a blog post last week, I estimated that there are about 1,740 Scientologists in the Tampa metro area (excluding staff and Sea Org), which equals 0.06% of the metro area population and about 0.043% of the Tampa media market.

Miscavige is thus spending somewhere between $200 and $400 per Scientologist to keep up the illusion that the cult is doing great, expanding nicely, and is gaining respect in the world.   That’s a hefty bill for not much return; we can presume with all the “crush regging” that goes on in Clearwater that there’s no incremental business to be gotten from the membership there beyond what they’re already getting.

Of course, the goal is to be able to claim this “stat” at a future event to buttress the claim to the assembled multitudes, just as much as it is to mollify local large donors.

It’s interesting, by the way, that there is no plan to include the LA market, which has only slightly fewer Scientologists than Clearwater, in the ad spending plans.  It’s not clear why this is the case.  Speaking purely speculatively, it is possible that the Tampa ad campaign is in response to concerns expressed by specific individuals in that market.

Should the cult decide to do a similar campaign in the LA market, I’d expect the numbers to be proportionally higher.  The population of the “Greater LA” metro area (including Orange County, Riverside and San Bernardino counties, all a single media market) is about 18.7 million, so Scientology’s ad spend to hit that market would likely be in the $2 million to $4 million range, and it would likely reach a slightly lower Scientologist population, making it even more ineffective than the Tampa campaign.

They’re Not “Sponsoring” the Winter Olympics

Several comments on Tony’s blog have conflated advertising on Olympic programming with “sponsoring” the Olympics.  There’s a very important distinction. Sponsors, such as Coca-Cola, Toyota, GE, Intel, etc., pay millions of dollars to be able to put the Olympic logo on their ads, products, etc.  There are multiple sponsorship levels; advertisers can also sponsor the US Olympic Team overall, or can sponsor the team for a specific support (for example, the “official cough syrup supplier to the Finnish biathlon team”).

Advertising during the Olympics is not at all the same as sponsoring, though a majority of the network-level advertisers will be sponsors running Olympics-themed ads.

The term “sponsoring our programming” that WFLA uses to describe Scientology’s ad campaign is, in my view, running pretty close to the line. They’re not claiming that Scientology is an official sponsor of the Winter Olympics, merely “sponsoring” the broadcasts.  Clearly, Scientology wants to conflate this minor distinction with the real deal of official sponsorship of an Olympic entity.  I would guess that they’ll cross the line and use Olympic material in their internal promos.

The copyright police that protect the Olympics brand is ferocious. They make the Disney copyright police, normally thought of as the gold standard in copyright pit bulls, look like vascillating pansies.  If Scientology were to imply in any way that they were “sponsoring” the Olympics, including using Olympic logos on internal mailings, I’d expect the Olympic copyright police to react quickly.  Of course, if we see anything like that, dropping a dime to the 2018 Winter Olympics brand protection site might launch some amusing entertainment.

Author: John P.

John P. is a Wall Street money manager and IT technologist fascinated by irrationality in all its forms, and Scientology most of all. He's a lifelong Steely Dan fan.