Olympic flame burns on despite scandal

The series of scandals and legal rows have failed to dampen corporate support for the Olympic Games. But for how long?

The Olympic movement received a fresh body blow this week following a dispute between sponsors which will result in thousands of spectators at this summer’s Sydney Games being forced to pay for everything in cash unless they have a Visa card.

Westpac Bank, an official supplier sponsor, has axed plans to open a branch at the Olympic site after Visa International – part of The Olympic Programme or “TOP” scheme – refused to allow it to serve customers who do not have a Visa card. There will now be no cashpoint terminals – other than those accepting Visa – inside the Olympic Park and other venues.

The dispute, the latest in a long line of rows, is likely to reinforce the perception that the five Olympic rings are losing their sheen, although not everyone is convinced that the Olympic movement’s image has suffered irreversible damage.

The first dent in its armour appeared after it was discovered that International Olympic Committee (IOC) members accepted payments from officials in Salt Lake City when the city was bidding to host the winter Games. The corruption crisis rocked the IOC and sparked the mass resignation of officials.

The way this summer’s Games have been handled has not exactly helped matters.

First, there were rows over how many tickets would be made available for Australian citizens. Then there were reports of an Aus $83m (&£33m) funding shortfall. This was followed by Reebok pulling its &£4m after a dispute over exclusivity. And let’s not forget there were threats of strike action from telecom workers, followed by native Australian groups threatening mass disruption. The list of problems seems endless.

It is against this background that the IOC has been attempting to rebuild the Olympic brand. Earlier this year, it unveiled its first promotional ad campaign, which its broadcast partners – in the UK, the BBC – are contracted to air as part of their TV deals.

The commercials, which include TV and radio executions, play heavily on nostalgia, using images of “against the odds human achievement” from past Games. The TBWA/Chiat Day-devised campaign distances the event from the IOC – deliberately so, according to IOC marketing director Michael Payne – to concentrate on athletes.

The IOC has also introduced a “morals” opt-out clause for sponsors, allowing them to pull out of contracts if the body is plunged into fresh scandal.

Payne, a former British skiing champion, though not an Olympian, says: “All the problems have been associated with the internal workings of the IOC, and not the Games. This campaign puts the focus firmly back on the event.”

This “charm offensive” appears to be paying off. Sponsorship industry observers say there is no shortage of companies scrambling to be associated with the Games. Although there are few signage opportunities, the power of association seems to be irresistible.

Sally Hancock, chief executive of sponsorship agency Red Mandarin, says: “Whenever we look for a global event for a sponsor, the Olympics is always high on the agenda. The Olympic rings are still a very potent symbol.”

According to SRi research, 97 per cent of consumers worldwide recognise the Olympic rings, and 89 per cent associate the Games with excellence.

Hancock adds: “It is still one of the world’s great sporting events and its core brand values – that it has the power to touch the hearts and minds of people in every region – remain intact, at the moment.”

Octagon Marketing senior vice-president of consulting Paul Vaughan agrees: “The IOC has gone a long way to solving some of the problems and the major sponsors appear to be content, despite reports to the contrary. Otherwise, they wouldn’t be renewing their contracts.

“The Olympics has few rivals. It is the only competition between all nations in a multi-sport environment.”

Their views are echoed by the British Olympic Association, which has signed up some of the UK’s top brands, including Lloyds TSB, Marks & Spencer and Tetley Tea, as official sponsors of the British Olympic and Paralympic teams.

BOA sponsors benefit from an act of Parliament which prohibits other companies from using the words “Olympic”, “Olympics” and “Olympiad” in their advertising. The BOA is aggressive in its defence of these rights and recently blocked a Duracell promotional campaign which tried to piggyback the Games by offering free tickets to the Sydney event (MW March 30).

A Lloyds spokesman says: “The Olympic movement has had a tough time, but for us that has not been an issue. We are supporting the British team and aim to raise &£4m. It is a great opportunity to get all our customers – and staff – involved.

“We also have an allocation of tickets to give away – and I can’t think of many people who wouldn’t want to go to the Games.”

But, despite this bullishness, the movement cannot afford to rest on its laurels.

As one source says: “The IOC has worked hard to combat the poor publicity but the rumblings of discontent among sponsors have not been invented. Companies rarely speak out publicly about these matters, but one more serious scandal – or a top athlete caught cheating – could tarnish the Olympic rings forever.”

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