How distribution could work A different kind of labor leader UFC plans new digital net The Sit-Down: Dave Brandon Coors Light passes Bud for the lead In MLB's licensing spotlight Fox will sell for L.A. Coliseum ATP adding Michelob Ultra to U.S. nets Powdr buys ‘World of Adventure Sports’ From the Executive Editor
SBJ/January 2-8, 2012/OlympicsPrint All
For the first time in more than 15 years, U.S. Olympic fans will be able to buy and trade cards featuring Olympians such as Michael Phelps and Hope Solo.
The last company to have a similar agreement was Upper Deck from 1993 to ’96.
The deal gives Topps its fourth major sports partnership. It also has licensing agreements in place with MLB and the NFL and UFC.
Topps struck a traditional licensing agreement with the USOC and worked with the organization to sign separate agreements with the 100-plus athletes who
In addition to Phelps and Solo, Olympians such as Abby Wambach, Allyson Felix, Lolo Jones, Ryan Lochte and others will be featured on cards. Select packs of cards will feature the autograph of high-profile Olympians such as Phelps.
Topps will put trading cards featuring (from left) Hope Solo, Allyson Felix and Michael Phelps on store shelves at Wal-Mart, Target and hobby store locations nationwide.
Photos by:GETTY IMAGES
“It’s names that have resonated in the past and newer names that we think will be up and coming in 2012,” Ribando said.
Peter Zeytoonjian, USOC managing director of consumer products, put the deal together with Topps. He previously worked at the NFL and has played a role in putting together other recent licensing agreements, such as last year’s USOC deal with Oakley.
Zeytoonjian said the USOC opted to do the deal because the trading cards offered a way for Americans to support and learn more about the athletes representing the country at the London Olympics.
Entering an Olympic year, the U.S. Olympic Committee has added two new sponsors, announced two corporate renewals and seen none of its partners end their support, putting the organization well ahead of its sales efforts over the same periods prior to the 2004 Athens Games and 2008 Beijing Games.
At the start of 2012, the USOC has signed new sponsorships through 2016 with Kellogg’s and DeVry and renewed its sponsorships with BP and Nike. Those deals have contributed to the organization’s success in securing more than $38.8 million in domestic sponsorship revenue, about 25 percent of the $150.3 million in domestic sponsorship it generated for the 2009-to-2012 quadrennial.
That performance contrasts with 2004 and 2008. By January 2004, the USOC had announced the signing of two new sponsors, 24 Hour Fitness and Nike, and the renewal of one sponsor, Home Depot. By January 2008, the organization had added one supplier, lost the sponsorship support of General Motors and announced no renewals.
“We’re where we want to be,” USOC chief marketer Lisa Baird said. “We’re closing some deals early, which is pretty exciting, but we have work to do.”
When the recession hit in 2008, the USOC reacted by reducing some of its sponsorship prices during the 2009-12 period. As a result, it signed more sponsors to keep its domestic sponsorship revenue on par with and eventually surpass previous quadrennials.
The USOC previously offered three sponsorship tiers. The high-level corporations, known as partners, paid $20 million to $35 million over four years; the second level of companies, known as sponsors, paid $10 million to $15 million over four years; and the lowest level of businesses, known as suppliers, paid $3 million to $10 million.
Anheuser-Busch’s current deal is the best example of how the USOC’s pricing changed. Between 2005 and 2008, Anheuser-Busch reportedly paid $20 million for its partner-level sponsorship of the USOC, but it renewed that agreement for closer to $10 million for the 2009-12 period.
Looking ahead, the USOC has already signed two of its four existing partner-level suppliers to deals through 2016. It brought on BMW in 2010 with a six-year deal valued at more than $20 million, and it renewed its agreement with BP last year through 2016 in a deal valued at more than $15 million. The only two partner-level sponsors it has to renew are AT&T and Anheuser-Busch.
It’s at the supplier level where the USOC will have to do most of its work. The organization signed one new deal at that tier with Kellogg’s, which extends through 2016, but five others at that level — Allstate, Deloitte, Hilton, United and 24 Hour Fitness — are all up for renewal.
The USOC has renewed a supplier-level agreement with Jet Set Sports and added DeVry as a sponsor at that level, but it still has one to renew with Oroweat.
“The overarching view of how we look at renewals is, first, what is the market like?” Baird said. “No. 2 is, in our contracts we have certain contract provisions in terms of when we can talk to them. Then clearly there is that subjective factor of momentum. We have London coming up and it’s going to be a great Games, and then we have Sochi and Rio, which we’re excited about and want to capitalize on.”
Baird said that the USOC’s strategy in approaching renewals called for the organization to renew its licensing partners first because they need to be able to develop product for 2013. That’s why it focused on renewals with Nike, Oakley and TeamFanShop, its online retailer. It is working on a renewal with its other major licensee, Ralph Lauren.
In addition to that area, the USOC also has to renew agreements with Citi and TD Ameritrade. It sold those sponsorships, which were hybrid sponsorship and media rights agreements, in partnership with NBC. Baird said that the USOC will wait until after the London Games to begin renewal discussions with those companies so that they have a chance to evaluate the results of their sponsorship.
The U.S. Olympic Committee is rewriting the rules of its media rights agreements with national governing bodies.
Four years ago, as it was preparing to launch a TV network, the organization bought the media rights of 17 NGBs for $70,000 a year. The deals gave the USOC control over the NGBs’ websites and initial rights to any media content the NGBs produced. It allowed the USOC to create an umbrella site, teamusa.org, that operated as a league site for the NGBs’ team pages.
The new agreements, which will cover the 2013-16 quadrennial, will see the USOC pay NGBs $25,000 to $150,000 annually based on their total traffic. The NGBs will retain rights to their event content, control production of events and distribution and retain full editorial content on their own website. The USOC will provide free website hosting, AP news feeds and free mobile Web platforms.
The USOC hopes to have all 35 Olympic NGBs agree to the new terms. It wants to build a total audience of 1 million monthly unique visitors.
“I’m hopeful we made a really appealing business proposition to them and more NGBs will migrate to our site under these terms,” USOC chief marketer Lisa Baird said.
The USOC is completing work on a new website, with WPP agency VML leading the development, and expects to roll it out in the first quarter of this year.
Baird said the USOC is creating a digital revenue model that will see it incorporate its digital offering into sponsorships. It also plans to offer some subscription services and hire employees with digital sales experience who can assist in selling advertising.
“Our mandate [from the USOC board] is to turn this into a revenue-generating entity,” Baird said. “We’ve generated revenue, but we haven’t looked at it as a revenue play. We’ve looked at it more as a brand and information play.”
The proposal has led some larger NGBs to give the USOC’s Web platform a second look. USA Swimming didn’t sign a media rights agreement with the USOC in 2007 because it was launching a swimming website with Wasserman Media Group. It subsequently brought those rights in-house and now manages its own digital operations. But USA Swimming chief marketer Matt Farrell said he liked the USOC’s new proposal both financially and in terms of what rights USA Swimming would retain.
“It’s a very prudent approach based on traffic and performance designed to reward performance and figure out how to monetize it going forward,” Farrell said. “We’re evaluating it and we like how they’ve approached this.”
The agreement has created some unease among smaller NGBs because it will bring another cut in what the USOC contributes to their organizations in the future. Many of those NGBs that generate the least traffic are the same NGBs that are expecting a cut in funding as the USOC begins to base its contributions to NGBs on their Olympic performance.
USA Bobsled and Skeleton Federation CEO Darrin Steele said he understood why that might upset some NGBs but added that each NGB has the chance to increase its traffic and get more money from the USOC. Plus, what the NGBs give up in money, they gain in flexibility.
“It’s a more dynamic arrangement,” Steele said. “It reflects the change in time and how media works now.”
Seven of 11 worldwide Olympic sponsors will roll out marketing efforts in Austria this month in support of the first Winter Youth Olympic Games.
Acer, Coca-Cola, Dow, McDonald’s, Procter & Gamble, Samsung and Visa all developed promotional efforts to support the event, which will take place in Innsbrook Jan. 13-22. The number of sponsors participating is two fewer than participated in the first Summer Youth Olympic Games, which were held in Singapore. Those games had marketing support from Atos Origin and General Electric, who are not involved in Austria.
Visa is offering branded bags at Olympic retailers at the Youth Olympic Games.
In addition to sponsoring the relay, Coca-Cola plans to set up a red, double-decker, London-style bus in Innsbrook’s city center, near the medal plaza. It will provide music and giveaways and be supported by a Coca-Cola Happiness Truck that goes around the city giving away Coca-Cola products.
P&G will emphasize moms in its Youth Olympic Games promotions, just as it did during the Vancouver Olympics. The company will offer the mothers of Youth Olympians free products and lunches during the Games. Its marketing will include a TV, print and public relations campaign across Austria that features Austrian Olympic skier Gregor Schlierenzauer in its “Thank You Mom” campaign.
Dow, which signed on as an Olympic sponsor in 2010, will activate at its first Olympics of any kind during the Winter Youth Olympic Games. The company signed on as the presenting sponsor of the “World Mile,” an area at the Youth Olympic Games that features a display illuminating the history, geography, traditions and culture of all 63 nations participating in the competition.
George Hamilton, vice president of Dow Olympic Operations, said: “While our marketing efforts around the 2012 Youth Olympic Games are limited, we are using this opportunity to forge important business relationships to hopefully participate in the construction and delivery of future Games. And we’re reaching the right people with the right messages.”
McDonald’s, Visa and Acer are all undertaking smaller initiatives. McDonald’s is providing meal vouchers to athletes, Acer is sponsoring a media lab for youth journalists covering the Games and Visa is doing point-of-sale marketing at retail and offering Visa-branded shopping bags at official Olympic retail outlets.