IBM is "pulling out" as a worldwide sponsor of the
Olympic Games, "abruptly severing a 38-year marketing
relationship with an about-face that underscores the high
cost of linking corporate marketing to sports," according to
Raju Narisetti of the WALL STREET JOURNAL. Following
several months of "futile negotiations," IBM said that it
chose to walk away "rather than lock up an eight-year deal"
with the IOC. One "apparent sticking point" was that IBM,
which spent more than $100M to sponsor the '98 Games and
provided much of the technology behind it "free of charge,
wanted local organizing committees to start bearing some of
the technology costs." But IBM said the two sides "couldn't
agree on how much money" local organizers should pay. IOC
VP/Sponsorships Richard Pound confirmed that the two are
"going our separate ways," adding that the IOC felt IBM's
projected costs were "too high" (WALL STREET JOURNAL, 8/7).
INTERNET END: Narisetti reports that IBM execs "were
rankled" by an IOC decision to seek a separate sponsorship
deal for handling the Games' Internet services and Web
sites. IBM held that role during the last two Olympic
Games. Narisetti adds that IBM's "bailout" means that the
2000 Summer Games in Sydney "may be the company's last."
IBM VP/Corporate Marketing Abby Kohnstamm added that the
company "has relinquished its first-refusal rights" for the
sponsorship, telling the IOC to "seek other technology
partners" (WALL STREET JOURNAL, 8/7). SLOC President Frank
Joklik said that the decision, which means IBM most likely
will not sponsor the 2002 Games in Salt Lake, "increases the
chances of revenues from the sales of sponsorships to
several parties instead of one" (SALT LAKE TRIBUNE, 8/7).
