Winner takes all

The competition in Atlanta wasn't only about bronze, silver or gold - the Games' sponsors were fighting for glory by association
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The Independent Online
No one looked on with more tension and anticipation than the world's corporate elite as the Olympic competitors awaited the signal to lunge for the Gold. Long before the first ball bounced and the first javelin flew at the Atlanta Games, while the athletes were still training in Manchester, Mombassa and Minneapolis, companies were preparing for their own Olympian efforts. The top 10 sponsors alone have invested an estimated $1.5bn (pounds 1m) in the quadrennial sports spectacular, making them potentially the most triumphant winners and, in some cases, the most devastated losers.

In the early 1980s the modern Olympics seemed about to face the same fate as Pheidippides, the first marathon runner, who collapsed and died after delivering his war report in 490 BC. The citizens of Montreal, whose mayor told them that the 1976 Olympics could no more have a deficit than a man could have a baby, will be paying for the miraculous birth well into the next century. With national governments withdrawing funding, only one city, Los Angeles, bid for the 1984 Games. Before they opened there were dire warnings from pundits that the movement would not survive to see this, its centennial year.

But the LA Games were a financial success, largely because Peter Ueberroth, later to be commissioner of major league baseball, persuaded companies to foot the bill. The International Olympic Committee (IOC) was slow off the mark, but caught up on the back stretch. By 1988 - with the help of ISL, the Swiss company that owns the marketing rights to the World Cup - it had put together a sponsorship programme, TOP (The Olympic Programme), that all but guarantees that it will remain in the running. Over the last four years TOP has raised $400m, compared with $7m in Montreal two decades earlier. But for the sponsors, despite a rigged field, there are risks, and there are grumbles that might soon erupt into the type of on-field tantrum that makes sports journalists drool.

The biggest complaint about Atlanta was the congestion on the streets. But Olympic sponsors, who pay for exclusivity, felt they too were being squished. More than 40 companies were signed up by the Atlanta Committee for the Olympic Games (ACOG), on top of the 10 IOC sponsors and hundreds that are backing national teams, particular sports within each country and individual athletes. Simon Clegg, deputy general secretary of the British Olympic Association,

says his organisation raises 30 per cent of its pounds 13m budget from 25 sponsors, including Cadbury's,

Midland Bank, Royal Mail and British Sugar, all of which can use the lion and rings logo - though only in the UK. Probably the most important sponsor is Delta Airlines, which flew 1,000 BOA athletes and officials to the US - an operation that probably cost it about pounds 1m.

The proliferation does not stop there. American retailer The Home Depot passed on its rights to 30 of its suppliers, helping to increase the number of Olympic-linked brands in Atlanta to almost 200. The big international sponsors complain that the ACOG, which had only US rights to sell, budgeted too much money for sponsorships, and when it couldn't sign up a few big companies, opted to recruit a large number of smaller ones.

"We predicted there would be a fire sale in the last year and that's what happened," says David D'Alessandro, senior executive vice-president of TOP sponsor John Hancock Mutual Life Insurance. "They ended up with dilution of the Atlanta marks. None of the TOP sponsors was amused by the naivete and arrogance of the Atlanta crowd in saying, 'We'll set a price and everyone will pay it.' No one down there is a marketer."

In the Olympic Village, McDonald's has six restaurants serving 7,500 free meals a day. But above them, stealing the glory, floats the Burger King hot air balloon. The IOC calls it parasite marketing and tries valiantly to stamp it out. Last year it insisted that the British Parliament pass an act protecting the Olympic symbols because the IOC is not satisfied with mere trade mark registration. The anti-piracy campaign has had mixed results. While many continue to exploit loopholes, others, such as American Express, have backed off for fear of being seen as un-American.

Lesa Ukman, editor of the Chicago-based IEG Sponsorship Report, describes the IOC's campaign as propaganda. "It's an insult to call them parasites," she says. "They're just trying to protect their market share. Visa should stop being a cry-baby and just run better ads." No matter which side one is on, there must be some sympathy for the ex-patriot Greek businessman in every host city who has for years been innocently trading under the name Olympic Restaurant and Bar - until the ring and torch police start walking the beat.

The objectives of being a sponsor vary widely. There are no direct advertising benefits, no hoardings at the edge of the stadium that will be seen on TV shots. So any benefits have to be generated by the sponsors themselves. For many companies it is straightforward consumer marketing. Put the symbols on your product, run some competitions and lots of television ads, then analyse your sales figures. Some take a longer-term view, taking the opportunity to treat important clients and potential clients to good seats and the chance to mingle with the world's best shot putters and gymnasts. John Hancock invited prospective policyholders to bring their sons to sport clinics run by members of the US team. For other companies the goals are more intangible.

UPS, the courier company, is using its involvement to weave together the worldwide staff it has built from scratch or acquired from other companies over the last eight years. "We didn't say: 'we expect to get X per cent return on investment,' " says Susan Rosenberg, the company's Olympic spokeswoman. Instead the company set up 20 employee schemes to get them involved in the project, including one for the 15 staff who had Olympic dreams of their own. The company even produced bubble gum-style trading cards picturing its athletes and their jobs at UPS.

Time-Warner's involvement is even odder. The media company's main presence in Atlanta is through Sports Illustrated, America's dominant weekly sports magazine. The investment is covered by the sale of advertising for Olympic supplements, something it could do - and undoubtedly would do - even if it were not a sponsor. It also published the official programme and a daily 44-page magazine.

But, bizarrely, none of its special Olympic editions mention its part as a sponsor except when its role as both backer and

independent chronicler might be seen to be in conflict. Art Berke, the magazine's communications director, says its involvement has not compromised its editorial independence, noting that one recent issue linked a prominent IOC executive with Cuban dictator Fidel Castro. When pressed, Mr Berke admits that one key reason for being a sponsor is to ensure that no other sports magazine is able to capitalise on official Olympic connections. "If we weren't official publication sponsor Newsweek or somebody else might do it."

Even with the best of time-keeping devices from SMH Group, maker of Swatch, the winner of the corporate medals race would be hard to judge. While the Games themselves revolve around competition, sponsorship abhors it. Carefully defined categories are supposed to ensure that none of the companies that have staked up to $40m each for the rights to use the five rings symbol are in the same line of business. It is as if Linford Christie was the only runner in the 100-metre sprint, while Carl Lewis was the sole competitor in the long jump.

Still, industry insiders have their favourites. Coke has home turf advantage, and has been in training for more than half a century. Its marketing is heavily geared towards youth and sport, and the Olympics is the one event that its customers around the world all enjoy. Visa, too, is expected to do well. Its contract is considered most favourable, barring any competitor cards from being used by the public to purchase tickets. Typically, the charges racked up on Visa's credit cards rise by 12 per cent during the Games.

"It was a PR nightmare," says one executive on the Olympic sponsorship team. IBM's computers proved incapable of coping with the flow of results from 40 simultaneous events. It took an agonising 10 days for its technicians to solve the problem. Meanwhile the company had to pull television advertisements touting its technological edge - replacing them with spots emphasising its involvement in the 2000 Sydney Olympics.

IBM was not alone in using the Games to showcase its know-how. Xerox supplied document processing, while Kodak handled all the pictures produced by the army of press photographers. Panasonic used the 1992 Barcelona Olympics to successfully launch its new professional video-recording system. Done correctly it can be a marketing coup. But the glare of publicity also highlights the errors.

Sponsorship can backfire in ways outside the sponsor's control. When a bomb went off in Centennial Olympic Park, executives of American brewer Budweiser found their name and logo on news programmes around the world. They would never be so callous as to whine about the bad publicity while 111 survivors recovered from their injuries and the friends and relatives of one victim grieved. But the images of death, destruction and fear were the exact opposite of those that beer companies like to associate with their products.

Sport is cool, so are Ray Ban sunglasses. Yet Bausch and Lomb, the manufacturer of the latter, is not renewing its sponsorship for 2000. "We'll still have a link somehow," says David Archer, the company's director of Olympic marketing, "but not through TOP." Ms Ukman says the company hasn't done enough to leverage its investment. The initial outlay of $40m or so buys only the right to be associated with Games. Coca-Cola has spent another $300m on activities related to the Games, from $25m on hospitality to $100m on television advertising during NBC's airing of the events. Bausch and Lomb is not alone. UPS only became a TOP sponsor after the withdrawal of its arch rivals Federal Express and the US Post Office.

Ironically, one of the biggest losers appears to be the com-pany that rescued the Olympics from a financial quagmire a decade ago. ISL, the Swiss company set up by the late Horst Dassler, founder of Adidas, is being muscled aside by Games organisers who feel they can run their own show more efficiently. Sponsorship for the next two Olympiads will be sold by ISL, but the IOC will handle other dealings. After the 2004 Games are arranged, ISL is expected to be sent to the locker room.

Roger Marment, an ISL vice-president and general manager of US operations, is professionally calm about the loss of the contract. The company raises about $1bn for various sporting events over a four-year period. Although ISL gets more profit from the World Cup because it owns the rights, the Olympics is its largest agency contract. And it is not the only one to have been lost. The BOA severed its links with ISL 18 months ago. Sponsors want to deal directly with event organisers, and as the latter become more sophisticated in marketing, the day of the intermediary may be passing.

As the final medals are handed out today, and athletes, spectators and hangers-on return to their native lands, the Olympic sponsors will begin a long process of evaluation. Tangible benefits, such as increased sales, will be toted up, while intangible gains will be debated at length.

Most of the TOP sponsors have already decided to sign up for another four years. Some of the latecomers enlisted by ACOG may join the Sydney bandwagon earlier, others will write Atlanta off as a lesson learned. And, at the very least, they will be able to boast to their clients that they were part of the Centennial Olympics.

Winning words

WHEN Roger Black hangs his spikes beside his silver medal for the last time it will not be the end of his relationship with big business. Unlike most Olympians, Britain's 400 metre star has a promising career ahead of him making speeches to corporate executives, middle managers and sales reps.

In America, and to a growing extent here, the single-minded drive demonstrated by athletes is seen as exactly what companies need.

But just being able to string a few words together is not good enough, argues Jon Holmes, managing director of Park Associates, an athletes' agency. Many contestants now employ media coaches to help with post-event interviews.

Mr Holmes' star client is former England rugby captain Will Carling, who runs a motivational speaking business which brings in pounds 500,000 a year.

When the Olympics were gatherings of amateurs, competitors expected nothing more than the glory. Donald Thompson, who won the Gold and set an Olympic record in the 50,000m walk at Rome in 1960, is now a gardener, says Mr Holmes. But today, even lesser athletes can cash in.

The demand for past athletes was best illustrated in Atlanta when hordes of Hollywood stars were eclipsed by retired competitors. At the Xerox tent, Mark Spitz, the US swimmer who took seven golds at the 1972 Munich Olympics, led a team of 100 ex-sports stars - many of them long since forgotten by the general public.