2012 Games sponsors sold on logo no-go areas

[Fiona]

By Matthew Syed

IMAGINE trying to raise £500 million in commercial sponsorship for an event at which the sponsors are not given a square inch of brand visibility. No perimeter advertising, no branding on the sportsmen’s clothing, not even a merchandising stand to sell products to the punters. Sounds like the toughest sales pitch since the proverbial optimist went to the Eskimos with a lorry-load of freezers.
So, is Keith Mills, the man tasked with raising this cash on behalf of the London 2012 Olympic Games, seriously stressed? Is he out there pounding the streets of the City with a clipboard in his hand and a salesman’s rictus grin on his face? Not a bit of it.

The marketing guru, who has been a key figure in the 2012 team since he was appointed as the bid’s chief executive, is sitting by the telephone. “It is starting to ring already,” he said. “The Olympic Games are unique. Companies see this as a once-in-a-lifetime opportunity to sponsor an event that inspires people from all walks of life. They are not put off by the prohibition of advertising at the Olympic venues because they recognise that simply being able to state that they are an official sponsor is hugely beneficial.”

It is a tribute to the enduring strength of the Olympic brand that it retains its cachet despite the ritual embarrassment of doping and other scandals. The Olympic logo runs rings around all other corporate symbols, with a global recognition rate that makes the Nike swoosh seem niche. Hard-nosed marketing executives are prepared to dig deep because they know that the Olympics mobilise consumers. Mills believes that the ban on advertising actually enhances their commercial value.

“The fact that the Games are ‘clean’ elevates the Olympics above other events, making it a more enticing proposition,” he said. It is a prohibition that is taken mighty seriously. When I competed in Barcelona and Sydney, I was hauled into a room before each match so that an official could measure the size of the logos on my clothing and equipment to ensure that they did not breach IOC rules.

The problem for the Games is that their commercial potency also attracts sharks looking to cash in without coughing up — ambush marketing. Nike, for example, saved the $50 million (about £28 million) that it would have cost to become an official sponsor of the Atlanta Olympics in 1996 and instead plastered the city in billboards, handed out branded banners and erected an enormous Nike centre on the edge of the Olympic Park. Many of those questioned in the aftermath thought that Nike was an official sponsor. Nike had done nothing improper but Reebok was furious.

This is why the advertising section of the Olympics Bill passing through the House of Commons is so vital. Without the protection of the law, potential sponsors will be spooked by the likelihood of ambush.

Recently I went up to the top floor of Holden Point to look out across the area of the Olympic park, at present a building site but soon to become a futuristic cityscape of gleaming buildings, waterways and state-of-the-art sporting venues. It is impossible to be unmoved by the prospect of the 17-day street party now less than seven years away. But it should be borne in mind that national euphoria will give way to mass despondency if Great Britain fail when it comes to winning medals.

This is why the present negotiations with the Treasury are crucial. Based on a report produced by Peter Keen, from UK Sport, the Department for Culture, Media and Sport is lobbying for the additional funds needed by domestic athletes to propel Britain to fourth place in the medals table. It is anticipated that this money will come on stream in April 2006, but there is a fear that the Treasury will penny-pinch.

So, while one feels confident that Mills and his team will raise the sponsorship revenue to add to the funds being used to deliver the Games, there is a concern about whether Gordon Brown will provide the cash necessary to deliver the medals. If the Chancellor fails to do so, the technical merits of the Games will be irrelevant — London 2012 will be remembered as a national failure.

RAISING THE STAKES IN LONDON

-- The London Organising Committee for the Olympic Games expects to raise £500 million from local sponsorship towards the estimated £1,487 million needed to deliver the Games (at 2004 prices)

-- Other sources of income will include ticket sales (£496 million), licensing (£55 million) and cash from the International Olympic Committee (£510 million)

-- The IOC contribution is drawn from the sale of television rights and The Olympic Partner (Top) sponsorship programme, which provides worldwide rights to the summer and winter Games

-- 90 per cent of Top sponsors renewed their contracts after Athens. The sale of television rights generated £1,493 million in 2004 and it is estimated that this will rise to £1,706 million for Beijing in 2008

-- In total, the Olympic Movement generated more than $4,000 million (about £225 million) during the most recent quadiennium (2001-2004)

timesonline.co.uk