Awarding the 2008 Olympic Games to Beijing might soon yield a significant dividend for the International Olympic Committee in the form of a new global sponsor.
The IOC is in talks with China's No. 1 manufacturer of personal computers, Legend Group, about securing the worldwide computer hardware category, international marketing sources say.
Addressing IOC voting members gathered earlier this month in Prague, the chairman of the IOC Marketing Commission, Norwegian businessman Gerhard Heiberg, offered the surprising revelation that a company based in China was on the radar as a possible addition to The Olympic Program, or TOP, the organization's global sponsorship tier.
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| The Vancouver contingent had a $35 million budget to land the 2010 Games, but a handful of non-voters could have changed the outcome. |
Pressed for details, Heiberg declined to identify the company or category. The IOC's marketing director, Michael Payne, also said he could not discuss the subject.
In an interview, Heiberg said there is no timetable for completing negotiations with the potential sponsor. He confirmed the talks relate to the 2005-2008 Olympic cycle, which kicks in soon after next summer's Athens Games and concludes with the 2008 Beijing Games. "At least for '05 to '08," said Heiberg, an IOC member since 1994 and former chairman of a Norwegian offshore oil company. "Hopefully more."
In a news conference he added: "We hope we can get a Chinese partner in TOP."
Legend Group is seeking to compete with worldwide brands such as IBM, Dell and Hewlett-Packard. According to a report by the Wharton School of the University of Pennsylvania, China is expected to surpass Japan and become the world's No. 2 PC market within a matter of years.
Including its recent eight-year deal with General Electric, the IOC has nine worldwide sponsors secured through at least 2008. Renewal talks continue with McDonald's and Xerox, whose contracts expire at the end of 2004. Xerox is viewed as squarely on the fence, for now.
The IOC has established 12 as its maximum for TOP partners.
EURO-PHORIA: The IOC's audited financial statements for 2002 indicate total assets of more than $818 million, with 8 percent allocated for its operations and the remainder primarily distributed to national Olympic committees and Olympic Games organizers.
Finance director Thierry Sprunger said the IOC enjoyed a windfall during the past 10 months as a result of shifting $20 million of its portfolio from U.S. dollar-based investments to stronger euro-based investments. The move produced a 17 percent return for that part of the portfolio, or $3.4 million.
He said the organization continues to build a reserve fund, which has a balance of $137 million. IOC President Jacques Rogge has established a goal of $200 million in reserve by the end of 2004 as a safety net should a future edition of the Games be canceled by war, terrorism or poor organization.
DOING THE MATH: Despite the considerable financial stakes tied to the IOC's selection of Olympic host cities, the organization does not require all of its eligible voting members to vote. The choice has ramifications for sponsors and broadcasters; candidate cities spend millions to compete. Recent 2010 Olympic Winter Games winner Vancouver had a $35 million bid budget.
After subtracting members who were unable to attend or ineligible to vote because a city in their homeland was on the ballot, 111 of 124 IOC members were left earlier this month to decide among Pyeongchang, South Korea; Salzburg, Austria; and Vancouver. In the first round, four did not vote or formally abstain. In the second round, 112 members were eligible but three did not vote or abstain, and Vancouver won by a three-vote margin, receiving 56 votes to Pyeongchang's 53. The IOC does not identify nonvoters.
"Based on experience, there are always four or five people who do not vote," said lawyer and member Denis Oswald of Switzerland.
Privately, some expressed a fear that tolerance for nonvoters creates a credibility problem because of the possibility that sitting out the vote is a strategic move.
RING TOSSES: Omnicom ad agency TBWA/Chiat/Day created the IOC's global image theme, "Celebrate Humanity," but it is Publicis Group's Saatchi & Saatchi that is celebrating now after emerging as the IOC's
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| Lewis |
choice following an agency review. Despite the shift, the IOC is retaining "Celebrate Humanity" as its ad campaign tag line. ... Former Salt Lake 2002 marketing chief
Mark Lewis is on the move again. He helped General Electric/
NBC negotiate its recent $2.201 billion television rights/sponsor deal, and is now talking to GE about a supervisory role connected to the global Olympic deal. To be determined is whether Lewis will be a consultant or employee. He resigned July 2 as president/CEO of the Utah Athletic Foundation. ... World soccer federation FIFA named
International Sports and Entertainment, a
Dentsu Inc./Publicis joint venture, to operate commercial hospitality in the 12 German cities hosting World Cup 2006. ... Brazil decided on Rio de Janiero over Sao Paulo as its candidate city for the 2012 Olympic Games.
Steve Woodward can be reached at swoodward@sportsbusinessjournal.com.
