NEWS

Sponsorship brings big business and Olympic ideals into uneasy partnership

This week scientists reportedly linked two seemingly opposite elements, pain and pleasure, to the same part of the brain. Socrates could have made (and in a philosophical way, did make) that connection, as they removed his shackles shortly before he downed his hemlock. Even if those scientists were reinventing the proverbial wheel, it’s nice to be reminded of a perennial truth now and again. The Olympic Games and big business are two other, apparent opposites that are perennially connected. On this theme a purist would be inclined to hold his nose with the left hand while writing with the right, because finances (along with the drugs problem) pose uncomfortable, but inevitable, dilemmas for the Olympics and their venerated, if tarnished, code of ethics. Sponsorship, television rights, and marketing have become crucial elements in staging this hugely expensive world festival. Some even believe that selling the Olympics has become the end in itself, a commercial bonanza that attracts money like bees to a honeypot, on the principle that nothing succeeds like success. Many others, of course, think the Olympics are merely reflecting the real world after living too long, and precariously, in a Coubertin-inspired artificial one; that the Games have to be paid for somehow; and that there is no reason to kill the golden goose as long as nobody’s hurt. Meanwhile, the Games participants are all swept along by the same, reinforcing tides of worldwide exposure, intense pressure to perform, reputations and futures at stake, and precious little time in the spotlight. Maybe the situation of the athlete and of the corporate sponsor are not so different. Growth, expansion, professionalism, commercialism, and their attendant pressures are pervasive. All the horses are feeding from the same trough. A horse is a horse, of course And there are a lot of horses involved. This week another report, this time by the Center for Economic Planning and Research (KEPE), predicts the Greek economy will reap 10.3 billion euros (nearly $10 billion) in Olympics profits over the coming decade. Whether verifiable or not – this is a state agency, not an independent think tank – the notion that the economy will get a big, long-term boost through tourism or construction comes as no surprise. In broad economic terms, the Games may actually make sense. It’s like arguing for keeping the British crown, not for its traditions and customs, but for its moneymaking potential for the British tourist industry; it may not be the most elegant argument around, but that doesn’t make it invalid. But equally important, if less addressed, is the distribution of that income. The problem for many is that the Olympics gravy train is too narrow, and that a few well-connected people and firms will likely reap the economic benefits. It was not always so. As late as the 1970s, the Olympic movement was a financial and organizational mess, as Montreal nearly bankrupted itself and the IOC unevenly applied a ban on commercial benefits for athletes (decried as shamateurism). Juan-Antonio Samaranch opened the economic floodgates in the 1980s, eliminating the amateur clause from the Olympic Charter and instituting fierce bargaining for high television fees to fund Olympics expansion. The Los Angeles Games in 1984 demonstrated that the Games could even pay for themselves, while the 1996 centennial Games at Atlanta was decried by the losing Athens bidders as a sellout to the Coca-Cola Olympics. What goes around, comes around; now, Coca-Cola is a worldwide Olympics sponsor; including for Athens 2004. And as Greece faces a bill of $6 billion (and counting), nobody talks any longer about keeping the Athens Games free of commercialism, but only of controlling its worst excesses. The Olympics sponsorship program is at the center of this attempted balancing act – embracing commerce yet keeping a step removed from it. If international capital helps foot the 2004 bill and shifts some of the financial burden away from the Greek taxpayer, commercialization seem like less a devil’s bargain than shrewd civic-mindedness. Welcome back, Big Mac As the Games organizers, ATHOC, like to point out, sponsorship of individual athletes was pervasive even in the ancient Games; it was something akin to Renaissance-era patronage of Florentine painters. Sponsorship works a little differently nowadays. Sponsors negotiate exclusive contracts to market themselves as providers of Olympic services, and the sums they pay cover some of the organizers’ many expenses (for ATHOC, about a quarter). They contribute to national Olympic committees, which in turn provide training programs, facilities, and coaching for athletes. There are two main types of Olympic sponsors. One group are the so-called worldwide top partners, which are negotiated by the IOC every four years, to sponsor the Olympic movement and its athletes and get marketing rights worldwide. This time around, these include 10: the aforementioned Coca-Cola, John Hancock (insurance), Kodak (film, graphics), McDonald’s (food services), Matsushita/Panasonic (audio/TV), Samsung (wireless communication), SchlumbergerSema (information technology), Sports Illustrated/Time (publishing), Visa (consumer credit), and Xerox (document publishing). At least the Marlboro man won’t be riding around with the Olympics logo on his horse. The other group are called Grand National Olympic Sponsors, Greek-based companies signed on as 2004 sponsors. This program was carefully thought out and has already been a success beyond anybody’s wildest dreams. It was designed to limit the number of sponsors to 40, in an effort to reverse the proliferation of sponsorships at recent Olympiads and ostensibly to get the Games closer to their original, less monied roots. It was a shrewd idea, creating demand out of regulated scarcity. The response speaks for itself. ATHOC’s revenue target for the program, around 200 million euros, was met after only six of the targeted 40 had signed on. And the agreement with Alpha Bank, at 74 million euros, has been hailed as the biggest ever, the first Olympic record for Athens 2004. Make of that claim what you will, but if they keep that pace up they’ll be giving Games tickets away for free. Other sponsors include OTE/ Cosmote/OTENET (communications), Delta/Fage (dairy products), ERT (media), Swatch (timing), Hyundai Hellas (transport), and Heineken (brewery). The OTE deal, the first signed, was worth nearly 60 million euros. Still, the categories are not reserved for private or even Greek companies. OTE and ERT are basically state-run, Hyundai is a Korean firm licensed to manufacture here, and Alpha Bank has just merged with National; while the signature Heineken product is more associated with couch potatoes and beer guts than champion athletes. Compromise abounds, as always. Firming up What do these companies get for throwing such huge sums into the Games? They acquire exclusive marketing rights as Olympic sponsors, guaranteed use of their products, association with a universally recognized (and still respected) symbol in the Olympic rings, liberal exposure of their products on television, and connections with a celebration of youth and vigor. Substantial tax write-offs, thanks to supporting a national cause when the chips were down, can’t be far behind. This is no charity exercise. And elaborate measures are in place to prevent ambush marketing and product duplication of the 35 product categories licensed for with the Athens 2004 registered trademark. All sorts of preventive measures, including anti-counterfeit holograms and using the fraud squad to snoop around businesses to see if their merchandise is legit, will see to that (so far the only official Olympics store operating is at the airport). So as you draw up your holiday shopping list, perhaps to buy some Olympic socks for your loved ones (or maybe some logoed swaddling clothes for your newborn, future Olympian – Christmas manger not included), spare a thought for the good cause you’re supporting – in this case ATHOC, the Greek Olympic Team, and indirectly, the poor local taxpayer. And that means you.