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SBJ/April 18-24, 2011/OlympicsPrint All
In a move that underscores the power of the Olympic rings to both NBC and its former parent company General Electric, the two companies will be back at the table together during the upcoming television rights negotiations.
Peter Foss, GE’s president of Olympic sponsorship and corporate sales, said GE will negotiate its Olympic sponsorship “the same way it did last time” in 2003.
The move could add more than $100 million in sponsorship fees to NBC’s bid to retain the Olympic TV rights, which are set to be sold this June. It also puts to rest the possibility that GE might look to negotiate independently of NBC, a move that would have allowed GE to exit or maintain its sponsorship regardless of what happens with the TV rights.
During the last Olympic rights bidding process in 2003, GE, then NBC’s parent company, agreed to spend $200 million to become a worldwide sponsor as a member of The Olympic Partner program (TOP) through 2012. The sponsorship deal was added onto the $2 billion that NBC agreed to pay for the rights to broadcast the 2010 and 2012 Olympics, bringing the total value of the deal to $2.2 billion. The proposal, which sweetened NBC’s rights offering, marked the first time a broadcaster’s parent company had ever offered to become a sponsor during a TV rights negotiation and differentiated NBC’s bid from its competitors.
In late 2009, GE sold 51 percent of NBC Universal to Comcast in a deal that valued the media company at $30 billion. The deal closed earlier this year.
The combination of the NBC sale and the fact that GE is already a worldwide Olympic sponsor created the possibility that the company might negotiate its renewal independently of the television rights, but Foss said that won’t be the case.
“We still own 49 percent of the company,” he said. “They’re our partners. We’re sticking with them.”
The IOC is expected to hold bidding this June for the U.S. TV rights to the 2014 and 2016 Olympics. In addition to NBC Sports, which has held the rights for almost two decades, ESPN and Fox have expressed interest in bidding. CBS and Turner also have met with the International Olympic Committee.
GE’s Olympic sponsorship already has benefited the company, which credited its sponsorship of the Beijing Games with generating roughly $700 million in China-related sales. It supplied energy distribution, lighting, water treatment and security equipment and systems to 400 projects around Beijing.
The 2014 and 2016 Games, to be held in Russia and Brazil, respectively, offer similar opportunities for GE’s infrastructure sales divisions. Both Olympics are expected to require billions of dollars in infrastructure development.
“We’re already participating there, but they’re high-growth markets,” Foss said.
IOC leaders hope to name a television partner for the 2014 and 2016 Olympics before the IOC meets in July.
With less than 15 months remaining until the 2012 London Games, the U.S. Olympic Committee has secured space on a college campus near Hyde Park for its hospitality center.
The USA House, which serves as a hospitality center for Team USA sponsors, athletes and national governing bodies, will occupy 32,000 square feet at a college in the stately South Kensington area of London near the southern entrance of Hyde Park. The name of the college was withheld for security reasons. The USA House in Beijing was 42,000 square feet, but that included space for organizers of Chicago’s failed bid for the 2016 Olympics.
The USOC picked the space over more than 50 other properties because it offers a large open room where the organization could entertain as many as 200 to 300 guests at one time, chief marketer Lisa Baird said. The space also features two outdoor patios and a rooftop view of nearby Royal Albert Hall.
The neighborhood is known as one of London’s most international, and many French, Italian and Middle Eastern expatriates live in the area. It is within walking distance of the 2012 triathlon venue and an Olympic live site where sponsors will activate during the Games.
“There’s enough going on but it’s also a little bit on the quiet side, which is what we want because it’s a place for athletes to get away,” Baird said.
The USA House is a private facility that hosts members of the USOC, the U.S. Olympic team, corporate partners, sponsors, suppliers and licensees. The first USA House was developed for the 2002 Olympics in Salt Lake City, and it has expanded at each subsequent Games. It typically serves as a place where partners can conduct meetings, dine or attend after-hours athlete medal celebrations.
More than 18,000 guests visited and 120 sponsor meetings were conducted at the USA Houses in Vancouver and Whistler during the 2010 Winter Games, according to the USOC.
Baird said the budget for the 2012 USA House will be comparable to the one for the Beijing Games. She declined to share what the budget was.
Lisa Reliford, the USOC’s new director of meeting and event services, will manage the 2012 USA House. She joined the organization last September after serving as director of events for the Trump Organization and general manager at the caterer and event company for the John F. Kennedy Center for the Performing Arts.
The USOC put out a request for proposal earlier this year for a design firm to help develop the interior of the space. Baird said she expects to select an agency to undertake that work in the next couple of weeks.
“We want to really showcase our athletes [inside USA House],” Baird said. “You’re going to see something a lot different than what you’ve seen in the house in the past.”
The USOC will tour the facility with its sponsors in May and begin developing plans for integrating them into the space. During the 2010 Vancouver Games, several Olympic sponsors contributed elements and services to the USA House.
“We’re looking for much more creative integration than we’ve had in the past,” Baird said. “Our sponsors want to take their integration to the next level.”