Scandal Concerns Sponsor

In the first breach of sponsor solidarity tied to the Olympic corruption scandal, Johnson & Johnson has pulled back from a $30-million deal to help underwrite the 2002 Winter Games in Salt Lake City.

The New Brunswick, N.J.-based health-care giant, a longtime supporter of the U.S. Olympic team, said it backed away primarily because of internal disagreements about how to unite the company’s many brands under a single sponsorship for the Olympics. But the corruption scandal, the worst in the 105-year history of the Olympics, played a role.

“Of course it was the backdrop,” company spokesman John McKeegan said Sunday.

The scandal broke in December with the first reports that Salt Lake City boosters had showered $4 million to $7 million in cash, gifts and services on International Olympic Committee members. Since then, 10 IOC members have resigned or been expelled.

In addition, several sponsors have made plain their unhappiness--but none of the IOC’s 11 corporate “partners,” each of which pays about $10 million annually for the advertising bang of the five interlocking rings, has pulled out.

Johnson & Johnson is not one of those 11 companies. However, it has long supplied products to athletes through the U.S. Olympic Committee and had signed a letter of intent to “explore further sponsorship”--in all, $30 million between 1999 and 2004, a source said--when the first allegations of bribery surfaced in Salt Lake.

A few weeks later, company officials “indicated to us that they had decided to put their sponsorship decision on hold,” said John Krimsky, deputy secretary general of the USOC and chief fund-raiser for the 2002 Games.

“We indicated we understood,” Krimsky said, adding, “There was no particular reason for either [the company or the USOC] to make a statement at that point.”

Johnson & Johnson intends to keep supplying its products--everything from athletic tape to pain-relieving pills--to U.S. athletes, McKeegan said. And the door may yet be open for 2002 because company executives have since met with Mitt Romney, the newly named head of the Salt Lake Organizing Committee.

Johnson & Johnson has bought considerable advertising time on television for recent Olympics, and Krimsky said he understands the company intends “to be significant broadcast buyers for Sydney,” meaning the 2000 Summer Games.

Krimsky’s marketing project, Olympic Properties of the United States, must raise about $300 million in cash, goods and services to meet the organizing committee’s $1.45-billion budget.

He said Sunday he’s optimistic.

In recent days, he said, some sponsors have begun to express the “feeling that Salt Lake and the USOC have moved forward, moved closer to full closure. We now expect significant discussions [with potential sponsors] and hopefully we’ll get the marketing program back on track--people will be less distracted with the daily headlines and we’ll get closer to the number we need to fund the Games.”