The Making – and Unmaking? – of the Olympic Corporate Class

 (This entry comprises extracts, from the beginning, a later section, and the conclusion, of a chapter to be included in Helen Lensjky and Stephen Wagg (eds), Handbook of Olympic Studies (Palgrave Macmillan), in 2011.)[i]

‘All these operations take money. You cannot help the developing countries with words. You must help them with money. And that is our policy’.

Juan Antonio Samaranch (Fortune 500, 1996)

Shedding sponsors

By the end of 2008, as a global economic crisis worsened, after the Olympic nationalist boosterism of Beijing 2008 had dominated the mid-year newsrooms, four primary Olympic sponsors within the elite TOP (The Olympic Programme) scheme had withdrawn from, or chosen not to renew, their partnerships with the International Olympic  Committee: Kodak; John Hancock/Manulife; Johnson & Johnson; and Lenovo. Their names were unlikely to be stripped from the marbled walls of the International Olympic Committee's (IOC) Olympic Museum in Lausanne, Switzerland, but the unprecedented loss of such partners sent shockwaves through the established international sporting economy.

TOP (The Olympic Programme) value?

Adidas boss Horst Dassler was a pivotal figure in framing the new political economy of international sports events, and in the afterglow of the Los Angeles’s 1984 Summer Olympic Games’s commercial success and ideological impact, companies not previously associated with sport looked to the Olympics and comparable high-profile sports events as major elements in their worldwide marketing strategies. But three decades on from Dassler’s death in 1987 perhaps things were about to change. Seven out of 10 of the TOP sponsors at the 1996 Atlanta Games were no longer in the mix after 2008. A third of the IOC’s 12 elite ‘worldwide partners’ withdrew after the 2008 Beijing Games, at the end of TOP VI. They had, though, retained a presence in full-page spreads in the IOC’s post-Beijing special edition of its publication Olympic Review. Kodak’s stress on the special magic of the visual image produced an androgynous hurdler in full striding flight over a hurdle: the vast majority of the small images comprising the multicoloured shapes of the figure and the object were of young children; under the picture the Games were offered back to the people: ‘Cherish your Olympic moments’ (p. 55). Johnson & Johnson (p. 45) featured Bryan Clay, the USA’s decathlon gold medallist at Beijing, holding a toddler on his lap whilst sitting in a garden swing: ‘You captured the gold in front of the world. So who’d have thought your best times would happen in your own backyard? Having a baby changes everything’. Here, the pinnacle of Olympic achievement pales into perspective as Clay gazes down at the next generation, in a monochrome resonant of both a nostalgia and a timelessness. Lenovo (p. 61) stressed the togetherness of the 4 billion people worldwide, brought together by ‘a great idea’, and linked the great idea of the Olympics with the ‘ideas everywhere’ that could flow from the company’s support of the Games ‘with over 20,000 pieces of computing equipment’.  Manulife (p. 24) highlighted a young Chinese girl, Wong Lok Yiu, ‘an aspiring ballerina [who] has a dream’, in a ballet pose, teddy bear by her side, and the caption ‘I wish I could dance forever’. The green and white of the company’s slogan was reproduced in the foliage framed by the pastel shades of the wall and window-frame of Wong’s dance room. ‘We’re here to help’, added Manulife. ‘Bringing dreams to life’ was the slogan at the bottom of the spread. Perhaps in awareness of its imminent withdrawal from the TOP scheme, the insurance company produced a mini essay on the motif of the dream:

We all have dreams. For ourselves, our families and our loved ones. At Manulife, we have comprehensive protection products to help you fulfil your wishes, whether for basic financial security, or an education plan to help your child be everything she wants to be.

For over 100 years, we’ve worked all around the world making all kind of dreams come alive. Whatever it is that’s important to you in life, we’ll support you with our global experience. So go ahead… dream on. We’ll help you get there.

That’s five dreams and three wishes in this long-term sponsor’s farewell spread. These four departing sponsors shared an emphasis on youth, families, and the future. Johnson & Johnson was a one-time or single-phase TOP sponsor, as was Lenovo, the first Chinese company to partner the IOC; but Kodak and Manulife (the erstwhile John Hancock) were long-term sponsors. Kodak had boasted, in 2004, of its 106-year-old pedigree as an Olympic sponsor, and employed little rhetoric or hyperbole, relying on the evidence of its clients’ own eyes as to the technological prowess of the brand (Tomlinson, 1995: 191). In 2004 John Hancock had celebrated the ‘plain old virtue’ of the qualities of patriotism, tolerance, selfless sacrifice, individual excellence’ (ibid.), and used trips to the Olympics as a motivational tool for its employees: ‘John Hancock began sponsoring the Olympics in 1993 and continued this relationship until its acquisition by Manulife in 2004, whereupon Manulife has since continued as one of the TOP program sponsors. John Hancock senior management estimated that its $40 million Olympic sponsorship had led to a $50 million increase in sales’. (Davis, 2008, p. 215) With such affirmative testimonies, what were the reasons for withdrawing from the TP scheme?

Kodak’s termination of its long-term was hardly surprising, given the changing nature of the global market for image-making technologies. A Kodak company spokesman attributed the decision to the company’s efforts to convey its message "closer to our customers". "Our new business strategy requires us to reassess our marketing tactics as well, and adapt them to changing market conditions and evolving customer behavior," Kodak’s Director of Brand Management Elizabeth Noonan stated (Paul, 2007)

Lenovo became a TOP partner in 2004, and in the same year bought the PC and laptop computer business of former TOP sponsor IBM. But its market share worldwide actually fell in the year of the Beijing Games, from 7.8% to 7.3%, putting the company behind Acer, Dell, and HP. Lenovo felt uncertain about committing an estimated further $65 million, and the TOP category was taken up by Taiwan-based rival Acer (McGlamery, 2008).

Johnson & Johnson did not take up an option for any more than just the one Olympics, expressing its pride at having been an Olympic sponsor: “With our sponsorship of the Beijing 2008 Olympic Games, we set out to reinforce the already positive perceptions of Johnson & Johnson in China”, spokeswoman Lorie Gawreluk wrote. She added: “Thanks to our association with these Games and the International Olympic Committee we've been successful in reaching those goals.” (USA Today, 2008).  But the healthcare company felt underexposed at Beijing. Its pavilion in the Beijing Olympics Green Area drew disappointingly low numbers to see its products or sample its customized wares, attributed in part to the effects of over-zealous security personnel. A statement that the company was choosing to focus on other business priorities could not disguise the fact that the Olympic sponsorship was relatively disappointing for the US-based health care and pharmaceuticals giant.

Manulife made little of its decision to cease sponsorship, at least in the public sphere. It had in fact inherited the sponsorship status in its takeover of John Hancock, a TOP partner since 1993, and clearly Manulife’s sales in Asia and China in the run-up to and during Beijing 2008 were boosted by the sponsorship status. But perhaps that was enough; exposure to the world’s largest emergent market as a one-off, and then some caution as to a further investment of something around $100 million for a renewal. In a reversal of the policy of the TOP era, the insurance category was then handed back by the IOC to National Olympic Associations/Organizing Committees to do with it what they chose.

Outcomes and tensions

The capacity of the Olympics to remake its own myth, to attract political and economic partners in its cycle of self-renewal, has been remarkable. IOC President Jacques Rogge wrote, in 2004, the year of the Athens Games: “The Olympic Games are the most prestigious sports event that a city can organize. They are the dream and fulfilment of young athletes. They also represent an extraordinary sporting, social, cultural and environmental legacy for the host city, the region and the country” (Preuss, 2004, p. xiv). He added that “as a catalyst for urban redevelopment” the Games are accelerators of change, enabling changes over 7 years that would usually take decades to accomplish.

From a marketing perspective, the Olympic phenomenon is unique: ‘The Olympics epitomize prestige and distinction, qualities associated with the rare and the unique … They are analogous to a limited edition, exclusive luxury item, never to be offered twice in exactly the same way’. (Davis, 2008, p. 5)  Davis adds that victorious Olympic athletes are perceived as special kinds of winners: “they are seen as extraordinarily heroic individuals who won in an exclusive, even rare, form of international competition against the very best competitors from around the world. The exclusive appeal of the Olympic Games, combined with the unique, even daunting challenges athletes undertake, creates a compelling, irresistible quality that motivates companies to support the Olympics in the hope of benefiting from the associated halo effect”. (Davis, 2008, p. 5) And at the level of rhetoric, the Olympics can still serve as a stage for the highest and noblest of human ideals. At the Albertville Winter Games in 1992, Samaranch called for a cease-fire in the Balkans, asking the stadium to “rise in silent tribute to the fallen city of Sarajevo”, Olympic hosts just 10 years before: “’The Olympic Movement is stronger than ever’, he said as a slight snow fell. ‘Please stop the fighting. Please stop the killing. Drop your guns.’” (Fortune 500, 1996, unpaginated).

The halo effect continues to work for the sponsoring corporation on one of the biggest stages in human history. The uniqueness of the Olympic product is presented to the biggest television audiences in Olympic history: “more than 5,000 hours of live high-definition coverage for broadcasters in 220 territories” (Olympic Review, 2008, p. 48), in the first-ever fully digital Games; and “the first to be broadcast entirely in High Definition and in stereo surround sound” (p. 51). The total of dedicated coverage was 61,700 hours.

Online coverage of Beijing 2008, from “the sample of sites for which statistics were available”, generated “a total of 8.2 billion pages views and over 628 million video streams” (Sponsorship Intelligence, 2009, p. 3). The 4.3 billion people who had home access to official broadcast coverage constituted 63% of the world’s population. Economic recession may have dented the commitment of some sponsors, but figures like these will without doubt keep the Olympic bandwagon rolling. If there is a dip in the fortunes of the corporate Olympic class, the single company may feel that one cycle of Olympic partnership is enough, or that volatile global markets make the Olympic partnership too high a risk. But sufficient stalwart partners in fast food and soft drinks, communications technology and financial services, complemented by parvenu sponsors looking to achieve global profile or regional dominance, remain willing to invest sufficiently in the five rings to sustain the Olympic brand.

In 1976 there was no significant corporate class to provide financial leverage for the Olympic Games in Montreal, Canada, an event that accumulated a debt of for the city of $1.5 billion, which took 30 years to pay off (CBC, 2006). Writer Jack Ludwig saw through the staged bonhomie of Montreal’s closing ceremony, what he called “waning moments” of realization that “this was indeed the end. Tomorrow there was – nothing. The Swimming Pool would be dark. Repair work would have to begin on the leaky Velodrome roof “ (Ludwig, 1976, p. 164). Los Angeles ’84 and the Samaranch economic model changed the tone, the pitch of the event, and boosted the rhetoric of Olympism as well as the coffers of the IOC. But outside Athens, the proud facilities of 2004 lie unwanted and neglected, the bold white architecture of the Olympic stadium and complex soiled by the overgrowing weeds, a monument to the financial excesses that destabilized the Greek economy. Olympic facilities in Seoul 1988 may have changed the world’s perception of South Korea, as emergent Asian Tiger, but the stadium has more use as a film set for gangster and thriller movies than for sporting events and occasions. And even at the majestic Sydney complex at Homebush Bay – again, an Olympics claimed to have transformed the image of a nation and not just a city – the facilities built for the 2000 Games attract only occasional use. In Beijing, three years after its 2008 spectacular, the Bird’s Nest and the Cube draw in local people playing recreational sports on an informal basis, rather than high-performance competitive vents. In early 2011, arguments were raging in London over the post-2012 fate of the Olympic Stadium, with football clubs Tottenham Hotspur and West Ham United fighting (the latter the winning competitor) for the privilege of defending any remnant of London’s bidding pledge to guarantee on athletics legacy for the city and the country; Lamine Diack, president of the International Association of Athletics Federations, raged that it would be a “big lie” if the stadium was torn down, or used exclusively for football. The arguments might continue within the extended networks of the Olympic Family, but the loyalists and arrivistes within the corporate class would be beyond all of this, seeing such legacy talk as no more than a local skirmish, as they eyed the hotel bookings for London 2012 and the flight schedules for Rio 2016.

 

References

CBC (2006) ‘Quebec’s Big Owe stadium debt is over’ (19^th December). http://www.cbc.ca/canada/montreal/story/2006/12/19/qc-olympicstadium.html [downloaded 9th February 2011].

J.A. Davis (2008) The Olympic Games Effect: How sports marketing builds strong brands (John Wiley & Sons [Asia] Pte. Ltd.: Singapore).

Fortune 500 (1996) Empowering the Olympic Movement: A look at the business dynamics behind the Olympics (Special Advertising Section), Fortune 500 1996 Issue.

J. Ludwig (1976) Five Ring Circus: The Montreal Oympics (New York: Doubleday).

T. McGlamery, T. (2008) ‘Did Lenovo waste Olympic sponsorship?’, Around the Rings (19^th October).

F. Paul (2007) ‘Kodak to end Olympics sponsorship after 2008 Games’, Reuters US Edition (12^th October). http://www.reuters.com/article/2007/10/12/us-kodak-olympics-idUSWEN164520071012 [downloaded 8th February 2011].

H. Preuss (2004) The Economics of Staging the Olympics: A comparison of the Games 1972-2008 (Cheltenham: Edward Elgar).

Sponsorship Intelligence (2009, September) Games of the XXIX Olympiad, Beijing 2008: Global Television and Online Media Report, Lausanne: IOC. http://www.olympic.org/Documents/IOC_Marketing/Broadcasting/Beijing_2008_Global_Broadcast_Overview.pdf [downloaded 8^th February 2011].

A. Tomlinson (2005) ‘The Commercialization of the Olympics: Cities, corporations, and the Olympic commodity’, in K. Young and K. Wamsley [Eds.], Global Olympics: Historical and sociological studies of the modern Games (Oxford: Elsevier), pp. 179-200

USA Today (2008) ‘Johnson & Johnson out as Olympic sponsor’, USA Today (18^th November).

http://www.usatoday.com/sports/olympics/2008-11-17-sponsor-johnsonandjohnson_N.htm [downloaded 8th February 2011].