Academic journal article International Journal of Sports Marketing & Sponsorship

Olympic Sponsorship: Evolution, Challenges and Impact on the Olympic Movement

Academic journal article International Journal of Sports Marketing & Sponsorship

Olympic Sponsorship: Evolution, Challenges and Impact on the Olympic Movement

Article excerpt

Executive summary

Over the past Olympiads, the International Olympic Committee (IOC), Olympic Organising Committees (OOCs), National Olympic Committees (NOCs) and the Olympic Movement in general have become increasingly dependent upon the significant financial support provided by corporate sponsors. The increased dependency of the Olympic Movement on corporate sponsorship is seen in the fact that 30% of the IOC budget and 40% of the United States Olympic Committee (USOC) funds are derived from sponsorship and licensing income (Stotlar, 2005).

Olympic sponsorship not only involves financial support for the Olympic Movement but also provides products and services, technologies, expertise and personnel to help in the organisation of the Games (Lee, 2005). Sponsorship revenue for the 2002 Salt Lake Winter Olympic Games accounted for 54% of all income (Stotlar, 2005). In addition, the Athens 2004 sponsorship programme, with the combined support from domestic sponsors and The Olympic Partners (TOP), was the second largest source of revenue for the staging of the event, providing approximately 23% of the Organising Committee's budget. As a result, in Greece, a nation of fewer than 11 million people, Athens 2004 sponsorship provided the highest-ever capita support of any domestic programme in the history of the Games (IOC, 2004).

On the other hand, new trends have illustrated the inefficiency of traditional advertising methods in the Olympic Games. One of the most recent examples is provided by Xerox Company, which decided to cease its 40-year Olympic Games sponsorship. The Olympic Games in Athens were the last games funded by Xerox, after the company had invested approximately $58 million (Lee, 2005). Instead, the company plans to direct its resources into other initiatives aimed at drawing customer attention and loyalty. Furthermore, Kodak, the first reported sponsor of the modern Olympic Games, announced that the company will end its 112-year association with the Olympics after the conclusion of the 2008 Games in Beijing (Olympic Challenge, 2007). With computer manufacturer Lenovo yet to re-sign its TOP deal beyond 2008, and rumours about the Canadian insurer Manulife withdrawing from the TOP programme, it has been argued that one of sport's few global marketing opportunities is facing pivotal challenges with its sponsorship programme (Olympic Challenge, 2007).

The information above clearly illustrates the significance of corporate sponsorship to the viability of the Olympic Movement and the continuation of the Olympic Games, as well as the emergence of major challenges for the sponsorship programme. Although exploratory in its intent, this study highlights the need for a more dynamic approach towards Olympic sponsorship. In addition, the paper illustrates the evolution of the programme, the marketing approaches employed by Olympic corporate partners, and raises pivotal questions about what precautionary measures the IOC needs to implement in order to enhance the Olympic brand value. The following questions guided the study: (a) How has the Olympic sponsorship programme evolved throughout the years? (b) What are the mutual benefits for the IOC and corporate partners? (c) What were the marketing trends in Turin 2006 and what will be the marketing approach in Beijing 2008 and beyond? (d) What are the challenges within the Olympic sponsorship programme? and (e) What is the overall impact of Olympic sponsorship on the Olympic Movement?

Evolution of Olympic sponsorship

The Olympic Games and sponsorship have a longstanding relationship, initiated with the very first Olympic Games in 776 BC. In ancient Greece cities would sponsor participant athletes by providing athletic facilities, equipment and trainers. Although winners were only awarded a crown of wild olive leaves, both they and their sponsor cities won huge renown (Badinou, 2001). At the first modern Olympic Games--the Games were revived in Athens in 1896 as completely athletic games--two-thirds of the funds came from private donations. …

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