SBJ/July 15-21, 2013/Olympics

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  • IOC, GlaxoSmithKline discussing TOP deal

    GlaxoSmithKline is in advanced negotiations with the International Olympic Committee about joining the organization’s worldwide sponsorship program.

    The U.K.-based pharmaceutical company would become the first new member of the IOC’s prestigious TOP (The Olympic Partner) program in three years. TOP sponsors such as Procter & Gamble and Visa typically pay $100 million over four years and have the right to use the IOC’s five-ring logo and the logo of Olympic host cities. They can market their Olympic sponsorships in the host country of a Games and around the world.

    The IOC’s executive board is aware of the potential deal, but sources said it hasn’t been brought to national Olympic committees, which have to turn over the pharmaceutical category to the IOC before a deal can be finalized.

    TOP sponsors

    Atos Origin
    Coca-Cola
    Dow
    GE
    McDonald’s
    Omega
    Panasonic
    Procter & Gamble
    Samsung
    Visa

    IOC executives declined to comment. In media reports earlier this month, IOC marketing chair Gerhard Heiberg said he expected to have at least one new TOP sponsor finalized before the IOC gathers this September in Buenos Aires, Argentina, to select a 2020 host city and name a new president.

    GlaxoSmithKline would become the IOC’s first pharmaceutical sponsor. The company got its initial exposure to Olympic marketing as a tier-three sponsor of the London Olympic Organizing Committee for the 2012 Summer Games. It served as the official laboratory of the Olympics and provided equipment and facilities for a World Anti-Doping Agency lab. The company developed a national advertising campaign that included a TV spot and billboards that appeared across the U.K.

    When the company cut its London 2012 deal, its CEO, Andrew Witty, said he believed it could help attract and recruit new employees. The company also could use its Olympic assets as an employee sales incentive, providing Olympic-related travel and perks to staff and clients in the same way that TOP sponsors Dow and General Electric do.

    GlaxoSmithKline has a market capitalization of $127 billion. Nearly 70 percent of its $39.9 billion in revenue last year came from pharmaceutical and prescription drug sales. The bulk of the company’s sales come from North America and Europe, but it saw 11 percent growth in South America, which hosts the 2016 Rio Olympics, and expects more growth there in the future.

    Johnson & Johnson, which was a TOP sponsor for the 2008 Beijing Games, is the closest the IOC has ever come to having a pharmaceutical sponsor, but the U.S.-based company, which has a sizable pharmaceutical business, defined its category more broadly as health care. It’s unclear if GlaxoSmithKline, which has an oral care, wellness and skin care group that accounts for 16 percent of its business, would look to do the same or be prevented from doing so by TOP sponsor P&G, which makes over-the-counter medications such as Vicks, Prilosec and Pepto-Bismol.

    IMG, which worked with Johnson & Johnson in 2008, has been consulting GlaxoSmithKline during its IOC negotiations.

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