London’s successful bid to host 2012 Olympics gives sports marketers the biggest opportunity of their careers. But, as different sports bodies scramble for private sector funding, there is still some confusion about what is actually on offer and where the money will go. By Barny Stokes
Sport England’s appointment of Jane Clarke to head its marketing and communications department (MW last week) comes as sports councils, governing bodies and sports marketing agencies gear up for the greatest marketing opportunity any of them will see in their lifetimes: the London 2012 Olympic Games.
However, Clarke, who joins from the Foreign Office, takes the reins at a difficult time for Sport England, the government-funded body tasked with encouraging people to adopt healthier lifestyles. While the positive impact of the Games on British sport is not in doubt, the sheer number of organisations clamouring for a slice of the marketing action has led some to express concern at the confusion faced by brands interested in supporting sport.
On a global scale, the situation is clear. The International Olympic Committee (IOC) is responsible for handling all commercial rights through The Olympic Partner (TOP) programme. The 12 current partners – such as Coca-Cola, McDonald’s and Visa – have exclusive global marketing rights in their category, including the use of all Olympic imagery and vocabulary, extensive hospitality packages and preferential access to broadcast time around the event.
Organising the organisers
When a city wins the right to host the Games, its National Olympic Committee (NOC) forms an organising committee to plan, market and deliver the Games. In the UK the NOC, part of the British Olympic Association (BOA), formed the London Organising Committee for the Olympic Games (LOCOG). The IOC will allot LOCOG a percentage of the global commercial revenues to help it reach the &£2bn it needs to stage the Games, and is also currently negotiating the co-marketing agreement that will allow LOCOG to market Olympic properties in the UK and raise the &£750m it needs from the private sector.
LOCOG’s newly appointed commercial director Chris Townsend is currently negotiating its first tier of official partnerships, each likely to cost between &£50m and &£100m, with a range of sponsorship and supplier opportunities likely to follow. These associations will involve similar rights to the global partners, but on a national scale, and will be crucial as Olympic stadia are “clean” venues with no advertising.
Given the price tags, and the necessity of securing the funding to stage the Games, the position on who has ownership of “Olympic” properties is clear, says Marzena Bogdanowicz, marketing consultant to the BOA. “Companies need to be aware that anyone other than LOCOG suggesting a link to 2012 does not have those rights to sell,” she says.
However, when Chancellor of the Exchequer Gordon Brown announced &£600m worth of support for Britain’s elite athletes earlier this year, he specified &£300m would come from lottery funding, &£200m from the Treasury and &£100m from the private sector. Yet with no one taking a clear lead on raising this last &£100m, various sporting bodies and national councils began to approach anyone who would listen with all manner of “Olympic” themed sponsorship proposals.
“Everyone saw a chance to attract big money for British sport and there were a lot of people sticking their hands up,” says one source. “Some of the stuff going on was farcical.” The source adds that part of the problem is the plethora of governing bodies, national councils and government-backed bodies, all of which need to attract investment not in the Olympic Games but in sport in general.
Elite and grass roots
Broadly speaking, sport falls into two categories in the UK: elite level competition and grass roots participation. UK Sport is the body tasked with supporting the country’s world-class athletes, while Sport England deals with community-based programmes. As such, it is UK Sport that really needs the &£100m, but it does not have any tangible rights to sell. It works with rights-owners, such as the governing bodies and athletes, but its own rights are limited.
UK Sport also oversees the work of the English Institute of Sport (EIS), an umbrella group of leading sports scientists, nutritionists and physiologists, which trains British athletes of all disciplines. The EIS has done deals with suppliers of specialist equipment and could offer brands opportunities to sponsor graduate training and athlete development programmes aligned with human achievement and world-class success. “We’re not talking about a logo or about using the Olympic rings,” says Mike Calvin, deputy director of the EIS. “We’re talking about real flesh and blood.”
Additionally, UK Sport takes the strategic lead on the Talented Athlete Support Scheme (TASS), which is designed to identify promising youngsters. It is offering packages starting at &£50,000 which it claims would be ideal to help support the development of British sport in general. Indeed, Tim Lawler, chief executive of Sports Aid, the charity that raises funding for TASS, stresses that while these opportunities are not linked to the Olympics, they could add value to a brand’s corporate social responsibility (CSR) programme. Separately, at grass roots level, Sport England oversees the work of the newly created National Sports Foundation, which hopes to attract funding from the private sector and is also targeting CSR programmes.
Given the range of opportunities to support British sport on offer, some say that LOCOG has been heavy-handed in its protection of its “Olympic” associations and could make clear that there are opportunities beyond those partnerships. One source says: “LOCOG has been very good at saying ‘Here are the rules’, when maybe it could be saying, ‘You all know the rules, so let’s see what we can do to take away the clutter for potential sponsors and make clear what’s on offer and who’s selling it’.”
A permanent legacy
For its part, LOCOG stresses that Olympic partnerships are very different to straight sponsorship packages as the money is for one purpose: staging the Olympic Games. A LOCOG source points out that simply winning the Games has resulted in huge increases in funding across the board for British sport, and adds that the Games will leave a legacy of permanent world-class training and competition facilities for UK athletes.
“We’re aware that this is a great opportunity for sport, but we’re not in competition with anybody,” says the source. “The Olympic Games transcends sport. It’s a celebration of human achievement, culture, education, civilisation and life. We protect our partners because this is the most powerful marketing platform on earth.”
All of this aside, questions have been raised over whether the UK’s sponsorship market is capable of providing the &£100m earmarked by Brown for Britain’s elite athletes. Nigel Currie, chairman of The European Sponsorship Association (ESA), argues that beyond the high-profile sports such as athletics, less popular Olympic disciplines such as badminton and table tennis have few properties likely to attract major investment. Others add that major rights holders in non-Olympic sports, such as cricket, will still be in the market place aggressively seeking deals and suggest that governing bodies of niche Olympic sports should form alliances to collectively negotiate with sponsors.
Yet despite these worries, Currie expects the money to be found. “I expect there will be money earmarked for the Olympics that is separate from companies’ existing sponsorship budgets,” he says. “It’s a once in a lifetime opportunity that will be so important for some brands to get involved with that new money will be made available.” Many in British sport will no doubt be hoping he is right.