Catching Up With The IOC’s Gerhard Heiberg
As the director of the International Olympic Committee’s marketing commission, Norwegian Gerhard Heiberg oversees the organization’s legendary sponsor program and more than $866 million in sponsor revenues. He is a 1964 graduate of San Jose State University and has been a member of the IOC executive board since 2003. He took time to sit down with SportsBusiness Journal staff writer Tripp Mickle and contributor Jay Weiner in Beijing last week.
One of the first things I wanted to ask about is the state and nature of the TOP program. How do you feel about it as it is?
Heiberg: It was introduced in 1985 and we thought after 20 years that we might like to change it and find something else, so we spent 18 months doing research, talking to a lot of people, talking to sponsors, talking to outside consultants, people in the marketing and sports marketing business. We drew the conclusion that things are running very smoothly. Yes, we needed to make some adjustments, but basically it’s a very sound program and we would like to continue with it. As you may know, we’re signed up with Coca-Cola through 2020 and other sponsors through 2016. We feel basically very happy with the TOP program as it is today.
What adjustments might you make?
Heiberg: Well, we’re getting into a new age with new media, and we’ll try to do something on that side together with our partners. Basically, we will keep it as it is. For every Games there will be some difference. Being in China is a little different than Canada and so on, but basically it will be the same.
When you did this study, what did you learn from partners in terms of the value you’re providing?
Heiberg: What we learned from sponsors was they liked the program. They liked the way we conducted the interaction we had together. We found out, for instance, we need to do something between the Games, so we started the program “Celebrate Humanity.” Now we are in another program called “The Best of Us” in order to try and bridge the gap between the Games.
What else did they ask for improvement in?
Heiberg: Nothing big. Hospitality, tickets, the way they promote the Games, how the IOC can help them. This keeps changing, of course. That’s part of it. It’s nothing major.
You have nine TOP partners committed today through the next quadrennial. Where do things stand with Johnson & Johnson?
Heiberg: We have agreed with Johnson & Johnson that after these Games we will sit down and talk about the future. This is the first time to ever do something like this. I believe it’s the first time they are in sports marketing at all. We said, “Let’s look at these Games.” It all started in Torino, so they need the Summer Games as well, and then we will talk afterwards.
You have two open categories as a result of Kodak’s departure and Manulife’s departure. Life insurance as a category has been returned to the national organizing committees. What categories do you envision adding, if any? Are you happy with maybe 10?
Heiberg: For the period we are in, we have $866 million. My hope is for the next quad we can pass $1 billion, so we need one or two more. We have promised our partners we’ll never go above 12, but we are in talks with some potential partners. They are interested. That will be different categories because as you said with life insurance we have returned those to the NOCs and OCOGs. But there are possible categories out there, without naming them.
If you can’t tell me the categories, can you at least tell me about the state of conversations with Gazprom. It was something that was reported about.
Heiberg: We had a meeting with Alex Medvedev in November last year. After that, it’s been quiet, so when it came up that London looked for this, we felt that we could wait for Gazprom. LOCOG has made an agreement with British Petroleum, BP, which means the first possibility for Gazprom is 2014, Sochi. We have said to Gazprom let’s wait now since London has our blessing signing up with BP. Gazprom for 2014 is a possibility.
The conversations have been going on for some time regarding the state of the USOC’s revenue share. Where do you see that going long term, and when do you think a resolution might be at hand?
Heiberg: As you know, we are talking about this. We have had a couple of discussions. We are talking about this. We will continue talking about this. I see that it is possible to find a friendly solution. We will have more meetings during these Games. We have an agreement from 1996. It’s running forever. In spite of that, we need to change a little bit. I think the Americans are very open to changing it. Little by little, we hope to find a solution together. The next question is, of course, how and what and so on, and I cannot say at this stage.
Regardless of how and what, Peter Ueberroth has said that if we grow the pie we’ll all benefit. Do you see that as a possibility?
Heiberg: We are growing the pie for TV and revenue. That is a possibility. Another possibility is for us to channel some of the money a little differently. I don’t have the solution today, but everybody is open minded on this. I hope little by little we can get everyone at the table and hopefully everybody to say OK.
How tied are these talks to the Chicago 2016 bid?
Heiberg: We keep the Chicago bid totally out of this. This has basically nothing to do with the Chicago bid. Nothing. It’s not even in the discussion at all.
We’ve talked to sponsors about the idea of Olympic fatigue after these Olympics. They said they might not be so fatigued if America got a bid. Have you heard that?
Heiberg: No. They have not spoken to me about this.
On the concept of fatigue, the Chinese have set a new bar so to speak with these Games, many people say. Do you anticipate that could cause some type of bubble to burst after this?
Heiberg: I hope not. I don’t think so. I saw that London was scared after the Opening Ceremony. “How can we match this?” But, of course, you have to do it the British way in London. You have to do it the Canadian way in Vancouver. This is not an example from spending more and more money. No. No. No. This has to be about the English and British way they do things. Most all of the Opening and Closing Ceremonies have been very special. A special occasion. A special country.
What do you see as the legacy of these Games?
Heiberg: I think for China it will be a fantastic legacy. Why did they apply for the Games? I see two reasons. One was to unite the Chinese people around one big event where they could feel pride, enthusiasm. They have really succeeded. The second objective was to open their country to the outside world. Be a player on the same level as other countries. We feel that’s exactly what is happening.
I am — like everybody else — being criticized in the West for not pushing harder for human rights. We feel a lot has happened since 2001. One example, unfortunately, as it is, was the earthquake. They really opened (up) about what happened. They invited the world to help them, from Taiwan to Japan to other countries. Everyone was invited. Openness was total. They have never done that before. We feel that’s a legacy. Another one is on the environmental side where they had no interest before they signed their host-city contract. They have understood and accepted and really followed this. In Beijing today, it’s totally changed. It’s green. You have a lot of flowers. You have water. You have everything, and this example is for other cities in China as well. The legacy here is fantastic.
What about for the IOC?
Heiberg: For the IOC, maybe the IOC will have to change some of its policies. … I’m not saying we will change, but maybe we have learned a lesson here.
What lesson? What policies?
Heiberg: We didn’t want to have sport involved in politics and vice versa. This time it was more or less impossible to avoid some type of discussion. Should we change some of our thinking and some of our strategy there and take other factors into consideration when we plan our Games and look to the future? Some impact will, of course, come from the NGOs having attacked us so strongly in the beginning.
When you have themes like “Celebrate Humanity,” or TOP sponsor Visa has a them like “Go World,” do you market the Olympics and five rings through a political point of view?
Heiberg: We have tried to avoid that, but in a way everything is political. As a basis of the Olympic charter, we have our ideals and our values and some politics in those ideals. Everything we say, that we want non-discrimination, our message can be seen as political as well.
It seems that it’s hard to be against that message about world peace. Do you hear TOP sponsors say they would like to be affiliated with a sports brand old enough, stupid enough, whatever, that’s affiliated with world peace? Is that a selling point?
Heiberg: No. The selling point is on the basis of the Olympic ideals and value. We want to associate with companies practicing the same in their way of doing business. We have to say to some companies, “We’re sorry, but you don’t fit into our way of thinking.” The connection with all the attacks on human rights and so on, we have had very close contact with our sponsors, especially the American ones being attacked by Mia Farrow and others, trying to find a way of doing things together and having the same stand here. Sponsors have felt we are open to discussion. We have felt they are open to discussion. I think we have found a platform and balance which has been accepted. We have never had in these discussions sponsors say, “We don’t want this.” Or, “You aren’t doing the right thing.” Not at all.
Do you think you didn’t react quickly enough to Mia Farrow?
Heiberg: Looking back I think we reacted in the correct way. But it was not easy because we were attacked heavily in the west and the Chinese attacked us because they felt we were not strong enough. We were squeezed in the middle. This is not easy. It’s been a balancing act, but I feel going into the Games people have understood, things are running, and we haven’t had any episodes.
You talked a little about the legacy for the IOC and the Chinese. What is the legacy for the Olympic movement as a whole and the property after this?
Heiberg: That’s when I said we do not want to draw any conclusions now. After the Closing Ceremony, we have to digest what happened. Everybody has to think this through. Then we have to have a meeting and ask, “Has this changed anything for the IOC?” My answer would be yes. But the next question is in what way. I’m not ready at this stage to guess.
There are still some open Olympic family seats. Has that been resolved?
Heiberg: Yes. We were especially concerned about this in Athens. In some venues, 50 percent of venues were filled. All of the tickets had been sold. We have tried to find a way whereby the sponsors can report back. For instance, (they could say), “We have 100 seats tonight, we will only use 30.” So instead of selling this we can invite school children, students, just to fill the seats. This is not easy because people don’t report that. Talking to the IOC members, many will say, “Yes. I’m going to the basketball game.” And they don’t go. It’s very hard to find a solution. Even on the Opening Ceremony. They were said to be selling for 15,000 British pounds. There were said to be seats. You can’t do anything about that.
In the U.S., there’s been a wave of deals done by professional sports leagues with secondary ticketing companies. Is that a consideration for the IOC?
Heiberg: We’re always discussing our ticketing policy. To find a solution, whereby 100 percent of seats are taken, is very, very difficult. All seats are sold here but they are not filled, so it’s difficult.
