Olympic athletes see limited sponsorships

July, 31, 2012
7/31/12
1:40
PM ET
Corporate money invested in the 2012 London Olympics is estimated at more than $7.38 billion. How much of that will the athletes see? None.

In fact, during these Olympic Games, athletes will be more restricted than ever. Their one major source for making money -- endorsements -- will be limited from July 18 to Aug. 15. During this time, athletes cannot use social media to mention companies that are not Olympic sponsors. In addition, Olympic athletes cannot appear in commercials for non-sponsors during this time period.

John A. Davis, a marketing professor at the University of Oregon and author of “The Olympic Games Effect: How Sports Marketing Builds Strong Brands,” said that for athletes who aren’t already households names, these restrictions have a negative impact.

“The restrictions on them can be considered more onerous, because they’re missing out on exposure in general,” said Davis. “As someone who is little-known, but trying to get known, they feel like any vehicle they can use is being restricted.”

One athlete, middle-distance runner Nick Symmonds, made headlines earlier this year when he auctioned off a tattoo on his shoulder. More than 85 brands bid on the opportunity. Hanson Dodge Creative, an active lifestyle marketing firm based in Milwaukee, Wis., won with an $11,100 bid. Symmonds will have to cover up the tattoo during events, but he believes the bandage will serve as a reminder because so many people are aware of the situation.

Although Symmonds has received a fair amount of attention from his auction, the money probably didn’t go far. Studies suggest it can cost six figures to train for the Olympics, including travel, coaching and use of facilities.

A recent study by the Track and Field Athletes Association shows that 50 percent of the top 10 competitors in each event make less than $15,000 a year in sponsorships, grants and prize money. That leaves a lot of uncovered costs, which is why many Olympians work full-time jobs or cobble together multiple part-time jobs as they train.

The situation raises the question: Do the Olympics cater to corporate sponsors at the expense of athletes who make the events possible?

Olympic coverage features advertising from The Olympic Program (TOP) sponsors such as McDonald’s, VISA and Coca-Cola. According to Davis’ book, each of those companies paid an estimated $240 million for one quadrennial cycle of the Summer and Winter Games between sponsorships fees and activation expenses, and the London Olympics is protecting its investment like no Olympics ever before.
In Adweek, Rob Prazmark, a founder of the TOP program and now CEO of 21 Sports, recently tallied the corporate money raised for the Olympics:

$1 billion dollars raised by the London Organizing Committee; more than $1 billion from the International Olympic Committee’s TOP sponsors; more than $200 million in U.S. Olympic Committee sponsors and another $800 million to $1 billion from other countries’ National Olympic Organizations; $1.18 billion paid by NBC for U.S. media rights; close to $1 billion sold by NBC in advertising; another $1 billion in rights fees worldwide; and more than $1 billion spent by sponsors in hospitality, promotion and athlete endorsement fees.



TOP sponsors like McDonald’s, VISA and Coca-Cola get exclusive rights to market in both the Summer and Winter Games, which reach an estimated 4.5 billion people. For the Olympics to command top dollar, the International Olympic Committee requires host countries to pass laws that protect Olympic trademarks and offer protection for sponsors. England’s law, passed in 2006, prevents non-sponsors from using wording or images that suggest an association with the Olympics when they have none, a practice known as ambush marketing.

A former British Olympic gold medal winner, Sally Gunnell, already has been part of the crackdown on non-sponsors. The Guardian, a British newspaper, reported Gunnell was prevented from draping a British flag over her shoulders during a shoot for easyJet because of the possibility it would draw an association to her famous flag-draped post after winning gold in Barcelona in 1992. British Airways is the official airline sponsor of London 2012.

The London Organizing Committee of the Olympic and Paralympic Games did not comment on the incident, but did tell the paper, “If we did not take steps to protect the brand from unauthorised use and ambush marketing, the exclusive rights which our partners have acquired would be undermined. Without the investment of our partners, we simply couldn't stage the Games."

The endorsement rules for participating athletes seek to do the same: protect Olympic sponsors by not allowing non-sponsors, even if they are sponsors of individual athletes, to associate directly with the Games.

Asked if this level of protection is really necessary, Davis says, “It’s too early to tell. If you look at the growth of social media from Beijing to now, it’s huge.”

Huge indeed. A study by sports and lifestyles public relations firm Taylor found 68 percent of people will use some form of social media to interact with the Games. iProspect, a global digital performance agency, reported that Twitter accounts have grown 29,900 percent since the 2008 Summer Olympics in Beijing. In addition, use of smartphones has grown by 456 percent and Facebook accounts have seen 901 percent growth. iPads, and other similar tables, didn’t even exist during the Games in Beijing.

“There’s a lot more noise out there. Sponsors are doing their best to try and control the noise,” said Davis. “That’s why London is being so severe, with ambushers in particular.”

At the end of the day, however, Davis thinks it will be tough to police. “What are they really going to do to the athlete? It seems to be contrary to what the Olympics are all about. Is the punishment more important than spirit of the Olympics?”

Kristi Dosh

Sports Business
Dosh covers sports business for ESPN. She is an attorney, founder of BusinessOfCollegeSports.com, and joined ESPN in October 2011.
Author of "Saturday Millionaires: How winning football builds winning colleges."

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