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Skeleton racer Noelle Pikus-Pace has signed deals with Deloitte, Kellogg’s, TD Ameritrade, Under Armour and others ahead of the Sochi Olympics. Each agreement includes the usual contractual obligations such as personal appearances, but they also spell out social media requirements that will see her mention some brands a minimum of 25 times on Twitter and six times on Facebook before the 2014 Games.
The requirements highlight a change in the way Olympic endorsement contracts are being written ahead of the Sochi Games. Before the London Games, agents said, companies included loose language about social media, but contracts for Sochi are more prescriptive, spelling out requirements about the number of times an athlete must tweet, make a Google chat room appearance or post to Facebook or Instagram.
Tripp Mickle & Tom Stinson talk about the buildup to the Sochi Games
Mancuso recently signed a deal with Jif that will be based almost entirely on social media.
Photo by:GETTY IMAGES
Social media has become so integral to sponsor activations ahead of the Sochi Games that some sponsors are even cutting deals that
“Sponsors might say, ‘I don’t need a service day. I can use stock photography, but I need a Google hangout and a Twitter chat. I need this many Instagrams. I need this many Facebook status updates,’” said CAA’s Lowell Taub, who works with Mancuso. “Now if they want social media, an agent can assign value to it.”
Taub said assigning value isn’t as simple as tabulating the number of Twitter followers an athlete has and charging sponsors 25 cents a follower, but he did say that followers and social media requirements become a central component in negotiations.
David Schwab, an Octagon senior vice president who helps companies select athletes for marketing campaigns, said that agents pitching athletes now include Facebook, Twitter and Instagram audience sizes in their submissions. It has become one of the first things companies evaluate.
“It is a quantifiable item that they didn’t have at their disposal just a few years ago,” Schwab said.
The social media demands also give agents and athletes something new to consider as they sign new deals. In the past, an athlete might be able to work with a half-dozen sponsors and appear in advertising for all of them without coming off as too commercial. Multiple tweets a month for that many sponsors, however, could turn their Twitter feed into an advertising page and cost an athlete followers, said Brandon Swibel, senior director with The Legacy Agency, which represents speedskater J.R. Celski.
“It’s a challenge for companies and athletes to find a happy medium,” Swibel said.
The increase in social media obligation is only one of the changes agents are seeing ahead of the Sochi Games. Agents also are seeing fewer non-Olympic sponsor deals than in years past and less demand for Olympic alumni appearances at the Winter Games.
The USOC has increased the number of sponsors that it has ahead of the Sochi Games compared with the 2010 Vancouver Games. Since then, it has added deals with BP, Chobani, USG, Smucker’s, Kellogg’s and others. That’s created more opportunities for athletes to work with sponsors, which typically rely on Olympians to be the face of their marketing programs.
But the opportunities with Olympic sponsors are being offset by a reduction in opportunities with non-Olympic sponsors in some cases. For example, the U.S. Ski and Snowboard Association requires its alpine skiers to sign a team agreement ahead of the Winter Games that includes an addendum preventing them from signing deals in select categories. New deals with Procter & Gamble, Kellogg’s and Diamond Nuts means the USSA is now protecting categories such as cereal, breakfast shakes, beauty and grooming, and nuts. Athletes could pursue deals in those categories prior to the Vancouver Games but can’t for the Sochi Games. As a result, Peter Carlisle, Octagon Olympic & Action Sports managing director, said there are fewer non-Olympic sponsors signing agreements than in the past.
Olympic endorsements with USOC sponsors tend to go for anywhere from $5,000 to $50,000 for one year, making them less lucrative in some cases than non-Olympic sponsorships, which often involve longer-term deals and pay more.
“Athletes have lost leverage,” said Carlisle, whose group represents snowboarders Seth Wescott and Hannah Teter. “It’s getting harder and harder to have [non-Olympic sponsors].”
Though the addition of new sponsors has closed off a few categories for athletes, USSA chief marketer Mike Jaquet said that the addition of P&G and Kellogg’s as sponsors has created an opportunity for athletes to work with Olympic sponsors who can feature them in advertising throughout the Olympics. (The International Olympic Committee’s Rule 40 clause prevents athletes from being featured in non-Olympic sponsors’ advertising immediately before, during and immediately after a Games.)
“I sympathize with the fact there might be non-Olympic opportunities that are difficult, but the Olympic opportunities are bigger because there’s more shared sponsors and the opportunity to use an athlete up to and through the Olympics is greater,” Jaquet said.
Another challenge agents are running into ahead of the Sochi Games is a reduction in demand for appearances. Because Sochi requires a 20-hour trip from the East Coast, many USOC sponsors have cut back on their hospitality programs from what they did at the 2006 Torino Games and 2010 Vancouver Games. That’s meant less demand for Olympians to make appearances at corporate events.
“Sochi is a tad leaner than Torino and Vancouver,” Taub said. “You hear a lot of chatter, especially as it comes to hospitality, that since it’s half a world away [there’s less interest than] Vancouver, which was a hop, skip and a jump away.”
U.S. Figure Skating and IMG are partnering on a post-Olympics tour that will bring figure skaters from the Sochi Games to 25 to 30 cities next year.
The tour marks the first time U.S. Figure Skating and IMG have collaborated on a tour. IMG created its Stars on Ice in 1986 to promote its client, Scott Hamilton, and has run the tour independently since then. But the success of last year’s USA Gymnastics tour, which generated $15 million in revenue after the London Games, and the addition of a team figure skating competition to the Sochi Games made USFS and IMG representatives believe that working together would benefit both companies.
“The team event changes the game a bit,” said USFS chief marketer Ramsey Baker. “The American public gets excited about something new and something new that the U.S. has a chance to win. You can only capitalize on that type of momentum once, and we wanted to be sure we worked in unison to do that.”
Byron Allen, IMG senior vice president, added, “Stars on Ice had been featuring past [figure skating] stars and we need to get the current crop of skaters to participate. This is the way to do it.”
USFS and IMG will share sponsorship, ticket and merchandising revenue from the tour.
Van Wagner, USFS’s agency of record, will oversee sponsorship sales and plans to look for a title sponsor as well as supporting sponsors. Existing USFS sponsors will be able to buy into the tour for an incremental fee.
IMG typically averages 8,000 to 10,000 spectators per stop on its Stars on Ice tour. It hopes the partnership with USFS helps it sell tickets to some of the organization’s 600 member clubs.
USFS plans to host free skate clinics in each market it visits. Those clinics will be run by USFS coaches and attended by Olympic figure skaters.
“It allows us to reinforce the U.S. Figure Skating brand and bring new people to the sport,” Baker said.
The U.S. Olympic Committee next year will offer a series of first-time hospitality experiences during the Sochi Games.
The organization plans to host domestic events for sponsors for the first time in four U.S. cities. It also secured a location in Sochi’s Olympic Park for its hospitality experience, known as USA House, during the Winter Games, marking the first time USA House has ever been inside the Olympic Park.
USOC chief marketer Lisa Baird said the organization’s marketing department came up with the idea to create mini, one-night-only USA House events in the U.S. after the London Games because staff recognized that many sponsor employees and customers can’t attend the Olympics. The travel challenges with Sochi, which requires multiple flights and can take as long as 20 hours to reach from the East Coast, means that fewer guests from the U.S. are expected to attend this Olympics than previous Winter Games in Vancouver and Turin, Italy.
Between Feb. 7-23, the USOC will set up what it is calling Team USA Clubs for sponsors, donors and special guests in Los Angeles (Feb. 7); Vail, Colo. (Feb. 15); Chicago (Feb. 20 and 21); and New York City (Feb. 23). The invitation-only events are being held on the same days that the USOC’s experiential marketing program, the Road to Sochi tour, visits those cities.
The clubs will serve as NBC viewing parties with food and beverages and appearances by former Olympians. The events already are overbooked, and the USOC expects 300 to 400 guests at each gathering.
Baird said the costs of the clubs are covered by the incremental costs that 12 sponsors paid for the USOC’s Road to Sochi tour.
“It was really driven by the fact that there are sponsors that have [high-level] people that never go to a Games,” Baird said. “Our thinking was, ‘Try it for Winter because if it’s successful, we’ll expand it for Rio [in 2016]. Clearly, this is an element people are interested in.”
Tripp Mickle & Tom Stinson talk about the buildup to the Sochi Games
Louder is providing the temporary facility in Sochi.
Photo by:USOC WITH LOUDER
The USA House serves as a gathering place for members of the USOC, Team USA, corporate partners, sponsors, suppliers and licensees. The Sochi facility will be 7,000 square feet, which is roughly the same size as the USA House in Vancouver in 2010. Last year’s USA House in London was more than 10,000 square feet.
The 2014 version will have wood interiors, televisions and multiple rooms. There will be a courtyard where guests can talk outside, and Olympic venues will be within walking distance. The temporary facility, which has been used previously, will be coming from Austria and is being provided by the Finland-based company Louder. After the Games, the facility will be dismantled and used as a hospitality venue for European ski events.
Choosing to put the USA House inside the Olympic Park carries some risk for the USOC. To enter the park, people need spectator passes that are linked to tickets. Unless arrangements are made, that will limit the number of visitors to USA House to people with tickets for events. That’s a change from years past when people without tickets could go to the venue to watch the Games with fellow fans of Team USA.
The site’s location means the organization also needs to use approved vendors for its food and beverage services, which could lead to increased prices and costs for the venue.
Baird said that the USOC expects fewer guests than years past and costs won’t be a problem. She said the USOC spoke with Sochi organizers about the spectator pass system and is confident it will be able to accommodate last-minute guests interested in visiting USA House during the Games.
“At the end of the day, we thought the [Olympic] Park would be the best location,” Baird said. “We know a lot of VIP guests love the medal ceremony and seeing our athletes. We don’t want it to get tired as a concept. We want to bring something new. The idea of being in the park next to the venues will make it a different type of house. People will go to two or maybe three events a day, and they will drop in between events. That’s a nice thing to do.”