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SBD Global/September 24, 2013/OlympicsPrint All
The IOC "plans to increase the price of sponsoring The Olympic Partner program, ending a decade-long period where official Olympic sponsorships averaged $25 million a year," according to Tripp Mickle of the SPORTSBUSINESS JOURNAL. IOC TV and Marketing Services Managing Dir Timo Lumme said that the price increases "would kick in for the 2022 and 2024 Olympics." Lumme said, "Pricing of TOP has to reflect market conditions. Once we start getting into the sales cycle post-2020, there will certainly be a price revision." The plan to increase pricing "comes as the IOC completes its third review of TOP." The program "has become one of the pre-eminent global sponsorship packages in sports," raising more than $3B since its inception and increasing in value by nearly 50% in the last decade, from $663M for the '01-04 quadrennium to $1B for the '13-16 quadrennium. However, the price TOP sponsors pay, which is pegged at $100M a quadrennium in just rights fees, "has been scrutinized in recent years" as the value of local organizing committee sponsorships for the Beijing, London, Sochi and Rio Games "have soared." Lumme said that the rising prices that local organizing committee sponsors pay "is one of the reasons the IOC is looking at its pricing of TOP." Lumme "did not say how much the IOC would increase the fee." Ultimately, that "will be a decision made by the organization’s new president, Thomas Bach." 21 Marketing founder Rob Prazmark, who helped create TOP in the '80s and was hired by the IOC to evaluate the program in '09, believes that "the IOC could charge TOP sponsors" $200M per quadrennium -- "double the current fee." Prazmark said, "The cost of TOP is a bargain for these global partners compared to if you had to go out and buy these rights individually" (SPORTSBUSINESS JOURNAL, 9/23 issue).
With the 2020 Summer Olympics and Paralympics headed to Tokyo, "many see the next seven years as a chance to revive the nation’s moribund economy," according to Kazuaki Nagata of the JAPAN TIMES. Expectations "are rising in a number of industries, not only construction, tourism and sporting goods -- the usual beneficiaries -- but also security, translation and even towel making." An employee at sporting goods maker Mizuno Corp. said that hosting the Games "will motivate people." The employee said, "We think (the Olympics) will provide a boost for our business." In addition to gear, the sporting goods industry "will of course cash in on the usual demand for related goods." Manufacturers of towels -- a classic product associated with the games that is also essential to athletes -- "are also expecting big business." Shikoku Towel Industrial Association representative Seiji Kondo said, "I think the demand for towels will grow for sure." Retailers and manufacturers, however, "are not the only ones likely to see a jump in business." Demand for private security services "is expected to soar to safeguard buildings and construction sites in the run-up to the Games, and the athletes and crowds once they begin." According to Tokyo’s official candidate file, the capital "plans to deploy about 50,000 security guards, including 14,000 from the private sector, during the 2020 Olympics" (JAPAN TIMES, 9/23).