Olympic Sponsors Say They’re Staying Put

For big companies that will pour an estimated $443 million into Olympic Games sponsorships and advertisements during 1999, the looming question is how badly the Salt Lake City bribery investigation will tarnish the Olympic rings that already have endured terrorism, Cold War boycotts and the dulling impact of performance-enhancing drugs.

But, so far, many corporations that pay dearly for rights to use Olympic logos and athletes in advertising say they’re not ready to abandon the highly effective international marketing tool.

“We can either look at the Games themselves and the spirit behind them, or look only at the scandal and begin wringing our hands,” said Burke Stinson, spokesman for AT&T;, whose sponsorship of the U.S. Olympics Team runs through the 2002 Games in Greece. “We’ve chosen to take the long view. It’s an awkward time for the Games, and by inference the sponsors, but it’s a time for sponsors to close ranks, not kick someone when they’re down.”

Similarly, Coca-Cola Co., an Olympic sponsor since 1928, “isn’t going to discard that relationship,” said spokesman Ben Deutsch. “This is a serious issue and a cause of great concern for us. But we’ve expressed our concerns to the organizing committees and the IOC, and we’ve been assured that they will take swift steps to bring the situation to a positive closure.”

But while big corporations aren’t likely to abandon the popular worldwide Games, corporate executives frustrated by the skyrocketing costs of sponsorship fees undoubtedly will try to use the scandal as leverage when contracts are renegotiated. “Make no mistake about it, the scandal and the flap surrounding it are not helping the Olympic brand,” said Lance Helgeson, senior editor of Chicago-based IEG Sponsorship Report, which tracks corporate sponsorships.

In 1996, Olympic sponsorship dollars totaled $290 million, according to IEG, compared with $433 million this year.

During a Friday speech in New York, U.S. Olympic Committee Marketing Director John Krimsky acknowledged that “we have been bruised” by the scandal. The troubled International Olympic Committee already has hired public relations giant Hill & Knowlton Inc. to try to restore its image.

NBC, which holds broadcast rights to upcoming Olympic Games, maintains that advertising, which is sold in multiyear packages, isn’t being hurt by the influence-peddling scandal. “We’ve seen absolutely no impact on Olympic advertising, and we don’t expect any,” said NBC spokesman Ed Markey. NBC continues to superimpose the familiar Olympic rings on sports programs, but it has pulled the rings from news shows that are covering the scandal.

Some potential sponsors reportedly have decided not to sign final marketing agreements with the troubled Salt Lake City Organizing Committee until investigators determine the breadth of that city’s problems. But other companies are moving ahead with Olympic sponsorships.

Visa International, a major IOC sponsor of the 2000 Summer Games in Sydney, Australia, is “still in discussions” about a possible corporate sponsorship of the Salt Lake City Games. And, as allegations of vote buying spread Friday to Australia, the Visa spokesman said the credit card company “continues to work toward a successful marketing and hospitality effort in Sydney.”

Denver-based US West Communications, as previously reported, this week reversed a decision to withhold a $5-million sponsorship check from Salt Lake City. The telecommunications giant said it sent the payment after Utah Gov. Mike Leavitt pledged to reform the organizing committee. “The governor has made major progress in pushing forward an open investigation,” said US West spokesman Davie Beigie. “He’s cleaning things up, bringing the spirit of Utah and the West into making the Games the focus again instead of the [selection] process. We’re encouraged that it’s moving in the right direction.”

For better or worse, sports marketers say, scandal-weary Americans seem to be taking the sports world’s latest woes in stride. A Denver-based market research firm reported Friday that 43% of Olympics fans who know about the scandal have a “less favorable” view of the Games. But the slew of investigations by federal, state and Olympics officials “has triggered a positive response among some fans and a mending of the Olympics’ image is underway,” said Tim Taylor, chief operating officer of the Bonham Group Market Research Co.