SBJ/November 1 - 7, 2004/Marketingsponsorship

Report of budget deficit heats things up for Winter Games organizers

While it might be somewhat difficult to believe the next Olympic Winter Games are only 15 months away, it is comparatively easy to believe that financial shortfalls now are forecast for the 2006 Games in the Italian Alps.

Even as Olympic officials were fretting about Athens during the countdown to last August, sources inside the Olympic marketing world were whispering that the International Olympic Committee also was worried about tepid corporate and public support of Turin 2006.

While it finally came to light last week that Turin’s Games face a nearly $230 million budget deficit, it was never a mystery that the organizing committee’s roster of principal sponsors has been at four and holding — along with 11 second-tier sponsors — for years, and that sales of licensed merchandise started later than past Games and were lagging. Plus, three years ago the IOC discouraged the committee, TOROC, from hiring an outside sales agent to help solicit corporate deals.

The news about the deficit came on the heels of a second visit in as many years to the office of Italian Premier Silvio Berlusconi by IOC President Jacques Rogge in which Rogge expressed concern about Italian indifference toward 2006. Berlusconi’s response is a reminder of why the IOC loves Games in countries where the federal government foots the organizational bill (a la Games outside of the United States).

He appointed Culture Minister Mario Pescante to be the government’s IOC liaison and, according to a source familiar with the meeting, assured Rogge the deficit would be covered.

The head of TOROC, Valentino Castellani, has threatened to quit, and it’s not just Olympic politics that play into the equation. Castellani is a left winger, and Berlusconi’s government rules from farther to the right.

WHAT’S IN STORE: A U.S. Olympic Committee representative disputed a published report that the organization is entering into partnership with Denver-based XP Retail to open and operate as many as 50 branded U.S. Olympic Shops, rolling out from 2005 to 2009. The report by BrandWeek was called premature.

The Olympic Spirit Store at the Mall of America will now be the U.S. Olympic Store.
An XP Cos. executive, managing member Tripp Wall, declined to comment on specific details about the reported venture.

The USOC confirmed, however, that it has renamed five Olympic Spirit Stores as U.S. Olympic Stores to be consistent with its similarly named online retail venture. Four of the five stores are on the grounds of Olympic training centers — one in Colorado Springs, Colo.; one in Chula Vista, Calif.; and two in Lake Placid, N.Y. A fifth store, which is operated with XP Retail, opened last summer at the Mall of America outside Minneapolis.

CEREAL KILLER: International Gymnastics Federation (FIG) President Bruno Grandi was re-elected late last month, a day after U.S. gymnast Paul Hamm was allowed to keep his contested Olympic gold medal after the Court of Arbitration for Sport threw out an appeal motion filed by a South Korean gymnast who competed against Hamm in Athens.

Turns out Grandi’s Aug. 27 letter in which FIG formally asked Hamm to yield his gold medal after a judging error — discovered too late by South Korea’s delegation — likely cost Hamm a chance to be featured on a Wheaties box as it placed the legitimacy of his Olympic all-around title into question.

A Wheaties deal, according to an industry sources, can be worth as much as $50,000 when combined with appearances. Hamm’s agent, Sheryl Shade, said the Wheaties box cover offer was withdrawn amid the torrent of controversy set off by Grandi’s widely criticized letter.

Now that the dust has settled, Shade said her client’s perseverance and upbeat comments as he awaited his fate have not been ignored.

“People think he held himself up in a classy way,” she said, although “it is too early to tell” whether Hamm will ever realize the financial reward from speaking and product endorsement he might have enjoyed without the controversy around the Athens judging.

His best opportunities are likely to be speaking engagements, she said. Current offers include several from Japanese companies.

FOOT NOTES: A new concept sure to be monitored closely by sponsors of major sports properties is the just launched FIFA Interactive World Cup, perhaps the ultimate marriage of a sport to youth-targeted technologies. Registered players from every continent are competing in the virtual Cup, which features EA Sports’ FIFA Soccer 2005 video game and gaming consoles by Microsoft’s Xbox. Some participants will compete online via Xbox Live. Players advancing out of qualifying rounds will earn trips to FIFA headquarters in Zurich for the chance to compete amid enormous fanfare for the title of FIFA Interactive World Player 2004. The title will be awarded Dec. 20 in conjunction with the organization’s annual gala honoring the sport’s on-field world player of the year. The Interactive World Cup raises the possibility in the future that virtual events will have broader impact on youth audiences and, thus, brand awareness of the sponsors of such events, than real-life tournaments such as the actual World Cup. … A four-league, 36-team Iraqi Football Association was restored in Iraq in late October ahead of the completed reconstruction of an IFA headquarters building, a project funded by FIFA. A main soccer stadium in Baghdad should be restored to the point of accepting spectators by the end of November, fifa.com reports. … New York-based Soccer United Marketing — the marketing offshoot of Major League Soccer — is partnering with the governing body behind soccer’s biannual Gold Cup, a tournament showcasing the top teams from North America, Central America and the Caribbean. The July 2005 Gold Cup is hosted by the United States, although sites have yet to be revealed. SUM will handle marketing and promotion. The acquisition of Gold Cup rights is one of the first deals following the arrival of executive vice president Kathy Carter last summer from Anschutz Entertainment Group. SUM also owns U.S. television and advertising rights to the 2006 FIFA World Cup.

Steve Woodward can be reached at swoodward@sportsbusinessjournal.com.

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