SBD/7/Sponsorships Advertising Marketing

BIG BLUE BIDS ADIEU TO WORLDWIDE OLYMPIC SPONSORSHIP

          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).

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Related Topics:

IBM, IOC, SLOC

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