Corporate Sponsorship Reaches All-Time High at Winter Games

Shortly after the Olympic torch is lighted this Friday in Salt Lake City, the real competition will begin as Winter Games corporate sponsors battle for their money’s worth.

Bank of America will be offering safe deposit boxes to athletes who win medals. Campbell Soup Co. will ladle chicken noodle soup from steaming caldrons in the Olympic village. Office Depot will sell computer disks and stationery to athletes and journalists. Visitors and athletes in Salt Lake City will find everything from an official milk (Smith’s) to an official champagne (Korbel).

The stakes are high because the Salt Lake City Games boast 64 corporate sponsors and suppliers that are contributing $859 million in cash, goods and services. That’s an all-time high, a noticeable jump from the $480 million raised before the 1996 Summer Games in Atlanta and from the $140 million raised for the 1984 Summer Games in Los Angeles, when the Olympic movement for the first time aggressively courted corporate sponsors to fund the Games.

Why is corporate America so enthusiastically grabbing for the colorful Olympic rings?

Even during a recession, the “citius, altius, fortius” Olympic motto remains in sync with the corporate world’s mantra of faster, higher, stronger. The Olympic focus on continuous improvement “is something that people easily identify with, and it links very nicely with what we’re saying about Office Depot,” said Bruce Nelson, chairman and chief executive of the office-supply chain that recently signed on as an Olympic sponsor.

The Academy Awards and the Super Bowl grab consumers for a few hours. But Olympic broadcasts promise a broad demographic that returns day after day, creating a perfect window for big corporations with multiple audiences.

EDS, for example, will use NBC’s broadcasts to court potential customers: MBA and engineering students who soon will be looking for jobs, Wall Street analysts and the company’s 142,000 employees.

Advertisers and NBC are banking on a patriotic swell to boost viewership.

“This year, it’s more important than ever to people in terms of patriotism and rooting for America, both on the athletic field and the battlefield,” said M. Dockery Clark, manager of sports and events marketing for Bank of America. Corporate sponsorships came into their own for the 1984 Games, when businessman Peter Ueberroth aggressively solicited corporate financial support. The Olympic movement’s dependence upon corporate sponsors grew during subsequent Games as governments proved unable or unwilling to finance construction of venues. Corporate dollars also are at the heart of training centers constructed for Olympic-level athletes.

There’s little talk in corporate circles of the late-1990s scandal involving Salt Lake City’s bid to host the Winter Games. “Sure, it caused me to stop and think,” Office Depot’s Nelson said. “But I was satisfied that the scandal wouldn’t taint the Games because [Olympic leaders] addressed the issues head on.”

The scandal’s shadow isn’t likely to be anywhere near as much of a factor as the uncertain global economy or the fact that the Games won’t return to U.S. soil for more than a decade.

“The Olympics always come down to the athletes, their hopes, dreams and aspirations,” Bank of America’s Clark said.

The flow of sponsorship and advertising dollars supports that theory. Olympic organizers don’t discuss specifics of corporate involvement, but sponsorships give both big and small companies a chance to grab the Olympic rings.

Eastman Kodak, Visa, John Hancock and seven other corporations paid between $50 million and $60 million for worldwide rights, according to the U.S. Olympic Committee. One rung lower are General Motors, Bank of America, Delta Air Lines and 20 other contributors that pledged at least $20 million for rights to use Olympic marks. Several dozen companies, including Herman Miller, General Mills and Kleenex, contribute between $3 million and $10 million, usually in the form of goods and services.

The Winter Games also draw strong support from companies that simply want to run advertising during NBC broadcasts. National advertisers are paying a reported $600,000 for 30-second commercials during the 375.5 hours of programming that NBC, MSNBC and CNBC will carry between Feb. 8 and Feb. 24.

NBC, which paid $545 million for broadcasting rights, says it’s on target to hit its goal of $720 million in Olympic advertising revenue. But industry insiders note that NBC now must deliver viewers or face the potentially costly business of giving commercial space later in the year to advertisers should ratings fall short.

The Winter Games aren’t as hospitable to advertisers as their warm-weather counterparts. The luge and curling contests aren’t crowd favorites among Americans who prefer sports such as basketball and swimming. The cold weather--and the cold economy--have trimmed back demand for corporate hospitality events.

But the Games are a good fit for such companies as Campbell Soup, which is slapping the Olympic rings on every can of chicken noodle soup it sells.

“The Winter Games clearly is the right time of the year to be selling chicken noodle soup,” said John Faulkner, Campbell’s director of corporate and brand communications.

The Winter Games also are a good fit for advertisers in the process of unveiling new corporate messages. Bank of America is using its Olympic sponsorship as an anchor for a yearlong, $60-million advertising campaign for credit and check cards, online banking and its home mortgage business.

Not every sponsor wants to share the media spotlight that an Olympic sponsorship creates. SchlumbergerSema isn’t as well-known as fellow worldwide Olympic sponsors Coca-Cola Co. and Kodak. But the company that has replaced IBM as the International Olympic Committee’s official information technology supplier will stay behind the scenes during the Games and broadcasts.

Despite the wealth of corporate sponsors, the Olympic movement can’t rest on its laurels.

“Sponsors clearly want more,” said Lloyd Ward, chief executive of the U.S. Olympic Committee. “During the 17 days of the Winter Olympics, you see some of the greatest sponsorship riches you’ll ever see.”

What Ward envisions is the long-running opportunities that, say, college basketball gives to sponsors during a long, regular season that culminates in the high-profile March Madness national championship tournament.

“Seventeen days clearly isn’t enough juice,” Ward said. “The opportunity is there to create additional venues [for sponsors] on the road to the Beijing Games [2008] and the Athens Games [2004].”