SBJ/Feb. 10-16, 2014/Olympics

NGBs, having met the challenge of recession, looking to grow

Headed into the Vancouver Games, U.S. Winter Olympic national governing bodies were reeling from the recession. Most lost sponsors. Many cut staff. But over the last four years, they’ve had a chance to rebuild.

Signs of improvement can be seen across all the winter national governing bodies. USA Bobsled added three new sponsors, the U.S. Ski and Snowboard Association increased its staff, and USA Hockey increased its corporate revenue by $500,000 a year.

USA Bobsled has new deals; USA Hockey, led by Dave Ogrean (below), has a bigger budget.
Photo by: GETTY IMAGES (2)
The gains have been steady enough to restore lost revenue and give executives confidence that they can begin to increase revenue in the future.

“It’s taken a long time to get back to where we were,” said Bill Marolt, CEO of U.S. Ski and Snowboard. “For [national governing bodies], it’s always a challenge to find the resources. We’ve met that challenge, and we’ll get through this year in OK shape.”

The organizations have had that success despite the challenges associated with the Sochi Olympics. The Games have been overshadowed by media coverage of terrorist threats. Reaching the host city takes almost a full day of travel, making it a less appealing destination for corporate clients than the 2006 Torino or 2010 Vancouver Games. NGB executives say hospitality programs, which include donors and sponsors, are smaller than years past. US Biathlon, for example, will go from hosting 30 guests in Vancouver to just 10 in Sochi.

“It’s expensive and complicated and it’s a big commitment of time,” said Max Cobb, US Biathlon’s executive director. “We scaled way back.”

But an improving economy has allowed most NGBs to overcome that. USA Bobsled signed new deals with BMW, 24 Hour Fitness, Century 21 and Putinka, a Russian vodka brand. The U.S. Olympic Committee helped facilitate the BMW and 24 Hour Fitness deals. The BMW deal has been big for the team. It bought them six two-man sleds and made a documentary about the sleds that gave the team 30 minutes of exposure on NBC.

“It lends credibility that we have those premium brands interested in partnering with us,” USA Bobsled CEO Darrin Steele said. “As you add more of those, the narrative gets easier.”

USSA has had similar success adding sponsors from the USOC’s partnership ranks. It signed deals with Chobani, Kellogg’s, Liberty Mutual and Procter & Gamble, which are both featuring USSA athletes in promotions. The addition of freeskiing to the Olympic program also helped the organization as it was able to add The North Face and expand deals with existing partners, helping it push total sponsorship revenue back to the levels of 2008.

But Marolt said that while the sponsorship marketplace has rebounded and deals have been signed, the financial commitment from each individual sponsor hasn’t rebounded. As a result, USSA has more sponsors than ever.

“Sponsorship pricing was restructured [after 2008],” Marolt said. “Going forward from that time, we’ve had to deal with a corporate marketplace that has been good, but a different pricing structure.”

USA Hockey Executive Director Dave Ogrean agreed, saying, “Because of their economic pressures, sponsor companies are trying to get as much as they can for the dollars and get as much as they can out of that dollar.”

USA Hockey was one of the few organizations that increased its budget during the recession. The NGB secured a commitment from the NHL valued at more than $8 million a year before the Vancouver Games. That’s provided a big lift to its annual revenue, and increases in membership, where it added 35,000 new members the last four years, and corporate revenue, which rose from $2.2 million to $2.7 million annually, have put it in the most stable financial position it’s been in years.

US Biathlon attacked the challenges that followed Vancouver by developing a fundraising program. It created a trustee program for its foundation and put together fundraising events that raised $160,000 toward its $2.4 million annual budget. It also added TD Bank’s former CEO as chairman, and he helped the NGB land a sponsorship with State Street Financial.

US Speedskating took a different approach to restoring revenue it lost following the recession. The organization’s revenue fell from $4.6 million during the 2009-10 fiscal year to $3.1 million in 2010-11. But it created its first Olympic trials competition and secured broadcast coverage for the event on NBC. The move helped the organization land three new sponsors — BMW, TD Ameritrade and Liberty Mutual — and it was profitable. Revenue this year is projected to be $4.3 million.

“We’ve righted the ship in a lot of ways,” said Ted Morris, US Speedskating’s executive director. “We have the ability to go out now and talk to partners about the value we can offer them.”

U.S. Figure Skating made headway in a similar fashion. The organization sublicensed the rights to the International Skating Union’s Grand Prix competitions and secured more than seven hours of broadcast time on NBC. The media inventory it added since Vancouver helped it land new deals with Procter & Gamble’s Puffs brand, Alka-Seltzer and others that pushed total corporate revenue to $4.5 million this year.

USA Luge is the only organization that failed to restore revenue lost after the recession. USA Luge lost a $1 million sponsorship from Verizon. Its new executive director, Jim Leahy, is restructuring the board and looking for ways to generate new revenue.

Executives at every NGB believe that will be easier to do over the next four years than it was over these past four years. The economy continues to improve, and there’s a real sense of optimism that corporate interest in South Korea, which will host the 2018 Olympics, will be greater than Russia.

“There are companies investing in the Russian market, but there are more companies investing in the Korean marketplace,” Steele said. “My gut says we’ll be able to make an easier pitch for Korea.”

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