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SBD/7/Sponsorships Advertising Marketing
BIG BLUE BIDS ADIEU TO WORLDWIDE OLYMPIC SPONSORSHIP
Published August 7, 1998
IBM is "pulling out" as a worldwide sponsor of the Olympic Games, "abruptly severing a 38-year marketing relationship with an about-face that underscores the high cost of linking corporate marketing to sports," according to Raju Narisetti of the WALL STREET JOURNAL. Following several months of "futile negotiations," IBM said that it chose to walk away "rather than lock up an eight-year deal" with the IOC. One "apparent sticking point" was that IBM, which spent more than $100M to sponsor the '98 Games and provided much of the technology behind it "free of charge, wanted local organizing committees to start bearing some of the technology costs." But IBM said the two sides "couldn't agree on how much money" local organizers should pay. IOC VP/Sponsorships Richard Pound confirmed that the two are "going our separate ways," adding that the IOC felt IBM's projected costs were "too high" (WALL STREET JOURNAL, 8/7). INTERNET END: Narisetti reports that IBM execs "were rankled" by an IOC decision to seek a separate sponsorship deal for handling the Games' Internet services and Web sites. IBM held that role during the last two Olympic Games. Narisetti adds that IBM's "bailout" means that the 2000 Summer Games in Sydney "may be the company's last." IBM VP/Corporate Marketing Abby Kohnstamm added that the company "has relinquished its first-refusal rights" for the sponsorship, telling the IOC to "seek other technology partners" (WALL STREET JOURNAL, 8/7). SLOC President Frank Joklik said that the decision, which means IBM most likely will not sponsor the 2002 Games in Salt Lake, "increases the chances of revenues from the sales of sponsorships to several parties instead of one" (SALT LAKE TRIBUNE, 8/7).