Sports Business: ATLANTA OLYMPICS
LET THE HYPE BEGIN
On Mar. 7, Atlanta Olympics czar William P. Payne will auction off a one-of-a-kind Hanes T-shirt emblazoned with the logo of the 1996 games and the number 500 as the countdown to the opening ceremonies begins. At Home Depots nationwide, people are shelling out $35 for personalized bricks that will go into the building of downtown Atlanta's Olympic Park. Ticket-application forms will be available soon at Home Depot and Coke displays everywhere. And NationsBank is underwriting the rehabbing of rundown housing near the Olympic Stadium.
With just 17 months to go before the 1996 summer games, Olympic sponsors are kicking into high gear (table, page 118). After paying as much as $40 million apiece to link their identities with the five linked rings, companies are whipping up costly programs to help them cut business deals, launch new products, motivate employees, and wrap their advertising in the glory of the gold. Meanwhile, wary Olympics officials are laying plans to protect sponsors from "ambush" advertising that could steal the thunder from their sanctioned efforts. And the Atlanta Committee for the Olympic Games (ACOG) is scrambling to sign 20 more sponsors--and keep its original budget plan on track.
Indeed, ACOG must move swiftly. A zealous Payne & Co. promised Atlanta an Olympics that wouldn't cost taxpayers a nickel. The original plan called for ACOG to net $650 million in sponsorship and licensing fees, fully 40% of the games' projected total revenues of $1.6 billion. But many would-be global sponsors balked at the original $40 million asking price for 10 major categories. Payne had to backtrack, parceling out smaller bits of turf. He now expects to sell sponsorships in as many as 50 different categories to net the $650 million.
NO PIGGYBACKING. Even so, many categories are going begging. No domestic auto company has signed on despite Payne's assertion in mid-February that a deal is imminent. To help move the sponsor hunt along, ACOG now is using an anti-ambush program as part of its sales pitch. The message: If you pay to sport the Olympic rings, rivals won't be able to horn in. ACOG officials bristle at the very mention of ads aired during last year's Lillehammer Winter Olympics by Wendy's International Inc., a nonsponsor that featured founder R. David Thomas in Olympic settings in its advertising, causing more than burgers to flip at official sponsor McDonald's Corp. Last summer's World Cup was a veritable free-fire zone for ambushers, with nonsponsor PepsiCo Inc. using soccer legend Pele to push Pizza Hut Worldwide outside the U.S., despite McDonald's and Coca-Cola Co.'s official ties to the soccer extravaganza. And those are just two examples among many.
Such debacles won't be repeated in 1996 if ACOG can help it. A full-time sponsor-protection director and staff of 30 will monitor ads and merchandise for piggybacking. They'll respond to ambushers directly, take out name-calling ads in newspapers, and sue if necessary. One dummy ad begins: "XYZ Corp. is intentionally misleading the American public...." A second juxtaposes a sponsor's logo with an ambusher's, one under the rubric "Hero," the other under "Villain." The ads, which will distinctly spell out ACOG's beef with ambushers, will run within 48 hours of any offense. "We've got a fast-response mechanism in place," says William McCahan, chief marketing officer for Atlanta Centennial Olympic Properties.
Olympic sponsorships have been controversial investments since 1928, when Coca-Cola Co. loaded 1,000 cases of Coke on the U.S. Olympic team's freighter to Amsterdam. Today, the financial stakes are many times higher, and the $40 million top sponsorship fee is just a start. Coke may spend more than $200 million on its hometown games. That includes around $50 million on an attraction near Olympic Park and millions more on a pin-trading center, billboards, and production of an Olympics-related TV program. Hospitality during the games could cost the soft-drink gargantua upwards of $25 million. TV spots will nick an additional $60 million.
Coke expects to get its money's worth. "It's imperative to us at Coca-Cola to pay off our investment in the Olympics before the opening ceremonies," says Stu Cross, Coke's director of worldwide sports marketing. "We're trying to get in earlier and do more because the sponsorship costs are higher." In coming weeks, Coke will announce major worldwide promotions. It is expected to drop $12 million or so to sponsor the Olympic torch relay. In addition, it will be a prime source of ticket information via leaflets packed in with Coke products.
SMALL FRY, TOO. To be effective, a sponsor's hype must go well beyond using the Olympic rings in ads. NationsBank Corp. produced an inspirational ode by filmmaker Bud Greenspan: It equates Olympic ideals with those of the bank, and nearly every employee has seen it. IBM hopes to parlay its expertise managing the games' olympian computer systems into an effective sales tool. John Hancock Mutual Life Insurance Co. sponsors pre-Olympics boxing, swimming, and gymnastics meets, then makes sales calls on contestants' families.
For smaller fry, an Olympic sponsorship offers a chance to play remora to marketing's whale sharks. Consider Sensormatic Electronics Corp. The little-known company will handle security at the games. It's no coincidence that it will soon host a meeting on security for sponsors at its headquarters in Deerfield Beach, Fla. "When we have them here, we're obviously going to take advantage of the showroom on our premises," says Louis Chiera, director of Olympic marketing for Sensormatic.
Such efforts can help even apparent profligates get their money's worth from a sponsorship buy, if they move fast. "The Olympics can pay off," says Jim Andrews, editorial vice-president of the IEG Sponsorship Report newsletter. "The Atlanta Olympics are the next big worldwide sporting event. You have to build up to it, build the hype." For the 1996 Olympic hype-building event, the starting gun has already been fired.
GOING FOR THE GOLD RIGHT NOW
COCA-COLA Olympic Park attraction, torch run, ticket promotion under way. Already booked more than $60 million in TV time during games.
HOME DEPOT Sponsoring Olympic brick program to build store traffic. But slow brick sales led to shifting promotion displays from some store entrances.
IBM Building games' information infrastructure. Already showcasing its Olympics expertise for clients with complex, time-sensitive computer needs.
JOHN HANCOCK Sponsors pre-Olympic events, then tries to sell policies to participants' families. Using Olympic getaways as employee sales incentive.
NATIONSBANK Produced expensive video to rally employees. Already using sponsorship in ads.
SENSORMATIC Security firm is using sponsorship to make its name among prospective clients. Employee sales program already in place.
DATA: BUSINESS WEEKBy David Greising in Atlanta