Olympic committees strike unusual sponsorship deals

With many economies spiralling downward and sponsors running away faster than Usain Bolt, the Olympics needed money. Big money. And fast. So, leaders of Olympic organizations started thinking outside the box, peddling their famous rings to new companies, selling multimillion-dollar sponsorship deals to pretty much anyone willing to pay the price. In the past few […]

With many economies spiralling downward and sponsors running away faster than Usain Bolt, the Olympics needed money. Big money. And fast.

So, leaders of Olympic organizations started thinking outside the box, peddling their famous rings to new companies, selling multimillion-dollar sponsorship deals to pretty much anyone willing to pay the price.

In the past few weeks, the International and U.S. Olympic Committees have announced a flurry of deals—a long-awaited sign that big-money sponsors are returning to the rings. The deals, however, have made for some strange bedfellows—a handful of partnerships that, at first blush, don’t look like natural fits:

The U.S. Olympic Committee signed a $24-million, six-year deal with BMW, making the German automaker the replacement for General Motors as the federation’s automobile sponsor.

The International Olympic Committee, which has long prided itself on sustainability and “green” initiatives, agreed to make Dow Chemical its official “chemistry company” in a deal believed to be worth $100 million or more.

Officials at the IOC, USOC and the London 2012 Organizing Committee came out in strong support of continuing a relationship with BP, which previous to the Gulf Coast oil spill had signed sponsorship deals with the USOC to the tune of between $10 million and $15 million and with London 2012 worth $58 million.

The Olympic movement also receives sponsorship dollars from McDonald’s, Coca-Cola and other companies that aren’t always immediately synonymous with sporting, active lifestyles. Experts say that while deals like these, in many circles, have become so common they don’t raise eyebrows, they also could leave the Olympic movement vulnerable.

“With the Internet and the ability of somebody or some group to create a stir or draw attention to these kind of things, you can get magnified so you are exposed,” said Kevin Lane Keller, a marketing professor at the Tuck School of Business at Dartmouth. “If people think about them more deeply, the connections might cause concern, and they may not create a positive impression.”

Canadian IOC member Dick Pound, who used to handle the committee’s sponsorship negotiations, said deals of these magnitude are all scrutinized internally before they’re signed.

“We would look at any sponsorship from the perspective of, ‘what this does for our brand and what it might do to it,'” Pound said. “You’re always thinking, ‘OK, what is the messaging here?’ You can have this concern with almost anyone.”

Pound said he found the USOC-BMW partnership a bit odd: “Not that it’s not a great company. It is a great company,” he said. “It’s upscale. Good product. But it’s not America.”

In a news release touting the deal, the USOC emphasized BMW’s 42-year history of selling cars in the U.S. market and the fact that BMW has 7,000 U.S. employees—all valid points, but certainly not ones that would need to be made if General Motors had continued on with the USOC.

In much the same way, the deal with Dow Chemical also doesn’t seem like a natural fit at first glance. For nearly 20 years the IOC has made a major point of pushing environmentally friendly efforts, yet Dow has been a target of criticism by activist groups.

IOC marketing director Timo Lumme said the Olympics and Dow might have more in common than you’d think, calling Dow a company that thinks a lot about sustainability and “has very strong beliefs that what it is doing has to be for the betterment of mankind.”

“Every industry has it’s challenges and any area of life has its challenges,” Lumme said. “But ultimately, what’s important is that you look at where companies want to get and what positive contributions they want to make.”

That was, in some ways, the intent of the USOC and the London Organizing Committee when they signed separate deals with BP. The LOC had good reason to bring on a big-money sponsor with headquarters in its hometown.

And when the USOC was scrambling for sponsors after a rough 2008, it welcomed an alliance with BP, as well.

Luc Bardin, BP’s chief sales and marketing officer, said the USOC deal was a chance to become a “natural member of the Olympics. There is a lower-carbon, greener dimension to this.”

Then came the Gulf oil spill.

While BP’s investment in Olympic sponsorship is insignificant compared to the expenses it will incur for the spill’s clean-up, the accident has left the Olympic movement exposed—to possible protests, to the possible loss of the funding if BP goes belly-up and to the loss of an active partner.

Since the disaster unfolded, Olympic executives have shown effusive support for BP and refused to speculate publicly on possible problems that might come up.

“British Petroleum are our partners. They supported us during the bid. They have a pre-eminent track record particularly in supporting the creative arts in the U.K. They are our premier partner in the delivery of the Cultural Olympiad,” said organizing committee president Sebastian Coe. “We have a world-class business that shares our vision, are a fabulous partner and will be our partner right the way through.”

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