The Business of Sports

London 2012 Calling: And Getting Louder by the Minute


Karla lives in Carlsbad, Calif., and she was understandably a little dismayed on Tuesday, Aug. 2, when she read in the Los Angeles Times that Bojana Jovanovski, a pro tennis player on the WTA Tour currently ranked No. 56 in the world, mistakenly flew from a tournament in Washington, D.C., to Carlsbad, N.M., rather than Carlsbad-by-the-Sea in northern San Diego County to play in the Mercury Insurance Open taking place this week.

It’s likely Jovanovski won’t suffer the same case of destination consternation if she is picked by the Serbian Olympic committee to represent her country at the 2012 Olympic Games in London next summer. Yes, it’s possible she might alight from a flight in London, Ont.; London, Ohio; London, Tex.; or even back in California (London, in the heart of the state’s Central Valley). But with all the already-escalating activity surrounding the Games that commence one year from now in London, England, surely some savvy GPS company will seize the opportunity and sign Jovanovski on the spot.

As long as they’re clear on where that spot is.

With the 2012 London Games officially less than a year away, expect to start seeing more and more Olympic athletes signing endorsement deals. Some big dominoes began falling last week when Bank of America (BAC) signed U.S. soccer players Abby Wambach, Hope Solo, and Alex Morgan to serve as spokespeople. All three players made substantial gains in marketing awareness surveys because of the women’s national team’s appearance in the FIFA World Cup finals.

Another familiar athlete to watch is 44-year-old U.S. swimmer and former gold medalist Dara Torres. Johnson & Johnson (JNJ) has signed Torres to endorse the company’s Bengay brand, and she is also confirmed to be a McDonald’s (MCD) brand ambassador during next year’s Summer Games.

One person not likely to land a McDonald’s endorsement is British boxer Amir Khan. He criticized the London Organizing Committee for allowing McDonald’s to open its largest-ever restaurant in the Olympic Park, saying it sends the wrong message about living a healthy lifestyle.

Companies are showing their 2012 Summer Olympics colors as well. BMW (BMW:GR) just announced it will provide financial support as well as engineering expertise to help U.S. Olympic athletes train more efficiently. As a BMW senior technology engineer explained, the "stereo-vision" technology, which utilizes digital video data algorithms, that the company uses to test automobile safety systems can also be applied to sports. The company is currently in the middle of a stereo-vision trial with U.S. track and field athletes, helping them to fine-tune their techniques.

To mark the year-out milestone to the London Games, Citigroup (C), an official sponsor of the 2012 U.S. Olympic and Paralympic Teams and the U.S. Olympic Committee, last week held a ceremonial Citi Team USA flag-raising event outside its headquarters in New York City. Olympic silver medalist Alicia Sacramone (gymnastics), Olympic gold medalist Susan Francia (rowing), and two-time Paralympic gold medalist Jeremy Campbell (discus, pentathlon) joined Citi Chief Executive Officer Vikram Pandit and employees to kick off the one-year countdown.

"Observing this important milestone on the Olympic calendar with inspiring athletes was a great way to celebrate our sponsorship of Team USA," said Pandit. "Helping America’s athletes fulfill their Olympic dreams is one way to demonstrate our support for the athletes and our country, reinforcing the commitment to excellence we share. In 2012, our 200th anniversary, we will be proud to stand with our nation’s Olympians and Paralympians as they bring the best of the American spirit to London."

Olympic rings aside, the only color that really matters in London or any other Olympic city is gold. So for endorsement dollars and medal counts alike, keep an eye on Michael Phelps, Ryan Lochte, Missy Franklin, and Italy’s Federica Pellegrini. Reportedly, whenever the World Aquatics Championships fall within two years of the Olympic Games, the results reliably predict Olympic gold medalists. This trend bodes especially well for American swimmers, who led the swimming medal count at the just-completed event in Shanghai, with 29, including 16 golds.

Marketers, take your marks.

Tea-ing Off: On the Grounds in East London

According to USA Today and other media outlets covering the countdown, 2012 London Games organizers are "pleased with what they’ve done and confident they’ll put on a great show."

"We stand exactly where we want to be. We’ve met every deadline. … We’re in good shape," said former British track star Sebastian Coe, who is chairman of the London Organizing Committee of the Olympic and Paralympic Games. Olympic Park is roughly 90 percent complete, with three of the park’s five entertainment venues for Olympic competition now open. London’s signature aquatics complex also opened during last week’s official one-year-out ceremony. Trial events around the city have begun, with the first one in Olympic Park itself scheduled for Aug. 16, in the Games’ temporary, recyclable basketball arena, which will house men’s preliminary games, women’s games through the quarterfinals, and all handball medal matches. (The remaining basketball games will be held at London’s O2 Arena, owned by AEG.)

Not only is construction running ahead of schedule, it is reportedly also running below its $13 billion budget. "The Olympic Park has already transformed the east London skyline," Coe said. "Record fundraising is in place to stage the Games, and we have a world-class team of experts working on the delivery of London 2012."

Having English as the native language has helped ease international communications around facility development issues, which in 2008 complicated the Beijing Games, and the London event is also remarkably free of Beijing’s many protests and the frantic rush to finish venues seen in Athens in 2004. But as the Guardian noted, several major temporary venues must still be built from scratch, including a 15,000-seat hockey stadium and a 23,000-capacity equestrian facility at Greenwich Park.

Perhaps the most notable temporary venue yet to be erected will be the 15,000-seat beach volleyball bowl on Royal Horse Guard’s Parade—familiar to the tens of millions of people who watched Prince William and Kate Middleton follow the route on their April wedding day. More than 4,000 tons of sand will arrive just in time for what’s being promoted as the crown jewel of the 2012 Games—a short trot from the steps of Buckingham Palace.

International Olympic Committee President Jacques Rogge has also reportedly been reassured by U.K. Minister for Sport & Olympics Hugh Robertson that the Games’ security strategy is sound, despite the recent resignations of the London Metropolitan Police commissioner, Sir Paul Stephenson, and assistant commissioner John Yates. Olympic security officials are also reexamining their plans in the wake of July’s terrorist attacks in Norway that killed more than 70 people.

And It Wouldn’t Be Summer Without the X Games

While the Summer Olympics occurs only every four years, extreme sport counterpart the X Games are an ESPN fixture every summer. ESPN’s 17th annual Summer X Games took place July 28-31 in Los Angeles. The Disney (DIS) family of networks—ESPN, ESPN2, and ABC—offered 25 hours of live, high-definition programming. The just-completed X Games also experienced record social media updates through Facebook and Twitter. Last year’s event generated up to $50 million in economic impact for Los Angeles, and the 2011 version is expected to be on par.

While the X Games contributed to ESPN leading all sports telecasts last weekend, and ABC saw the X Games return to that network after a hiatus last year, the 2011 X Games’ Saturday coverage saw only a 0.6 overnight Nielsen rating, down 33 percent. ESPN commentators noted throughout the three-day event that a large portion of X Games consumption by Generations X and Y was via Internet clips and the social media coverage—which could account for the comparatively low ratings on traditional TV and serve as a strong reminder that better online/social media viewership ratings systems must be in place before the 2012 Olympic Games kick off in London.

2020 Vision

This week, the Associated Press reported that the U.S. is one of at least five countries that have "filed preliminary paperwork required by the IOC ahead of any potential bids for the 2020 Olympics." Italy (Rome), Japan (Tokyo), South Africa, and Spain (Madrid) have also submitted the requisite forms, while Turkey (Istanbul) and Qatar are also believed to have done so without official confirmation.

The compliance forms are a new IOC requirement ahead of the extensive formal bid process. The deadline to submit such forms was July 30, and the U.S. Olympic Committee reportedly has until Sept. 1 to submit the names of any 2020 U.S. applicant cities to the IOC. The likelihood of an American bid remains uncertain, however, as the USOC repeatedly said that it would not consider a bid unless and until it finishes a new revenue-sharing deal with the IOC, but that the issue should be resolved before the next USOC board meeting late this month.

In other words, if we want to see the U.S. host the Olympic Games in the next decade, let’s hope the USOC is not too closely following the playbooks of the NFL and the NBA.

Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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  • BAC
    (Bank of America Corp)
    • $17.26 USD
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  • JNJ
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