Bloomberg News

Johnson & Johnson to Sponsor Olympic Games Worldwide

February 23, 2006

Johnson & Johnson, the maker of medical products from Tylenol to Band-Aids, will join a group of 11 companies with exclusive worldwide rights to use the Olympic symbol.

International Olympic Committee President Jacques Rogge and Brian Perkins, the company's vice-president for corporate affairs, signed the contract today in Turin, Italy. The accord takes effect from the end of the Winter Games this weekend and covers the 2008 Summer Games in Beijing.

``We'll take it one step at a time,'' Perkins said at a press conference, when asked if Johnson & Johnson planned to extend the sponsorship to include Vancouver in 2010 and London in 2012.

``We'll certainly try to catch them for 2010 and 2012,'' said Gerhard Heiberg, chairman of the IOC's Marketing Commission.

Financial details weren't disclosed. The 11 so-called TOP sponsors paid a total of $866 million in cash and services for exclusive worldwide rights to Olympic images such as the five rings. Their current contract covers the four-year Olympiad that includes the Turin Games and the 2008 Summer Games in Beijing.

Perkins said the ``lion's share'' of its contribution to the IOC will be in cash, not services.

Powerful Asset

``If a company really understands how to integrate the sports sponsorship into their marketing portfolio, not just for the two weeks of the event but with a four-to five-year strategy plan, it's an incredibly powerful and cost-effective asset,'' Michael Payne, the IOC's former marketing chief who now advises Formula One racing, said in an interview.

Johnson & Johnson (JNJ:US) is already the official health-care products sponsor of the Turin and Beijing games. Those deals were limited to the countries where the games are being held, meaning the New Brunswick, New Jersey-based company couldn't associate itself with the Olympics in the U.S. or anywhere in Europe outside Italy.

``We are a global company and the minute we got involved with the games, we felt pressure from within to be able to use the Olympics worldwide,'' Perkins said.

The TOP program began for the Olympiad that concluded with the Seoul Games in 1988. Nine companies paid a total of $98 million. It replaced a series of country-by-country deals that companies complained didn't give value for money.

Program Closed

The amount has grown with each Olympiad and the companies have become more international. Of the first nine, seven were U.S., while with Johnson & Johnson's arrival six of the current 12 are from the U.S. The TOP program is limited to 12 companies.

``TOP is now closed through the Beijing games,'' Heiberg said.

Coca-Cola Co. (KO:US), Atos (ATO) Origin SA, General Electric Co. (GE:US), McDonald's Corp. (MCD:US), and Visa International have signed up as TOP sponsors through the London Games in 2012.

Heiberg said a sixth company has also extended through the 2012 Games and will announce it in April.

``Companies are getting a far greater appreciation of how to use and plug into the power of sport,'' Payne said. ``As a result, the competitive bidding that's going on to obtain the marquee events is rising and rising.''

Samsung to Extend?

Samsung Electronics Co., Asia's biggest maker of mobile phones and semiconductors, will probably extend its sponsorship of the Olympic Games until 2012, Kwon Gye Hyun, head of Samsung's sports marketing division, said in an interview in Turin.

Matsushita Electric Industrial Co.'s Panasonic, Swatch Group AG (UHR)'s Omega, Eastman Kodak Co., and Lenovo Group Ltd. (992) haven't said yet if they plan to extend their sponsorship beyond Beijing.

Heiberg said Toronto-based Manulife Financial Corp. (MFC) has indicated it won't sign beyond 2008. Joshua Milne, a spokesman for Manulife, said in an e-mail response that ``as a matter of company policy, we do not discuss the specifics of our sponsorship plans.''

To contact the reporter on this story: Gregory Viscusi in Turin through the London newsroom (44) gviscusi@bloomberg.net.

To contact the editor responsible for this story: Jay Beberman at jbeberman@bloomberg.net


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Companies Mentioned

  • JNJ
    (Johnson & Johnson)
    • $98.96 USD
    • 0.21
    • 0.21%
  • KO
    (Coca-Cola Co/The)
    • $40.72 USD
    • 0.13
    • 0.32%
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