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SBD Global/February 18, 2014/Olympics

International Olympic Committee Reprices TOP Deals At $200M

The IOC has set a new price point for TOP sponsorships, nearly doubling the cost of four-year global sponsorships from $100M to $200M. Panasonic last week became the first TOP partner to sign an agreement beyond '20. Sources familiar with the deal said the eight-year sponsorship, which runs from '17-24, is worth $350M to $400M overall. IOC TV & Marketing Services Dir Timo Lumme declined to discuss financial details but said that the IOC had secured an increase. “The last pricing [of TOP] was done in 2005 to 2010, so it’s appropriate for there to be a repricing, and the price increases are significant, which reflects the value of the TOP program,” Lumme said. Since '05, four-year TOP sponsorships have been valued at $100M to $120M. (TOP prices vary from category to category). The Panasonic deal has the potential to increase TOP prices to $175M to $200M over four years and could allow the IOC to increase its sponsorship revenue from $1B to as much as $2B for the '21 to '24 period. “We’ve always said the program has been undervalued the last five or 10 years, and if they’ve corrected the pricing, it’s long overdue,” said Rob Prazmark, founder of 21 Marketing, which evaluated the TOP program for the IOC in '09. “Those numbers will be difficult for some companies to adjust to, but other corporations will step up and fill the void of those that decide not to keep pace because of the value there." The IOC is in extension talks with Samsung and plans to open negotiations with other TOP partners soon. It also is looking at adding one or two new sponsors in industrial and consumer categories. “We’re in the fortunate position where we could stop the program now, but we’re not going to,” Lumme said.
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