Auto deal could fetch at least $150M for Rio
The International Olympic Committee plans to forgo selling a worldwide sponsorship in the auto category, allowing Rio de Janeiro 2016 organizers to sell the category locally at a price that should reach at least $150 million.
The move is significant for both Rio de Janeiro 2016 and national Olympic committees worldwide. The auto category is typically one of the most lucrative that an Olympic organizing committee or national Olympic committee can sell. The IOC has never sold the category, and had it moved forward with plans to sell an auto manufacturer rights to its worldwide marketing sponsorship platform, The Olympic Partner (TOP) program, it could have cost organizing committees and national committees millions of dollars in revenue and the support of value-in-kind vehicles.
Beginning at least a year ago, the IOC put a hold on the auto category and held talks with BMW and Volkswagen about becoming the first automotive partner to be a TOP program member. The conversations with BMW, which is a sponsor of the London Games, were held in conjunction with its sponsorship deal with the U.S. Olympic Committee. The IOC and BMW held several discussions about a TOP deal, but those conversations were tabled after the Munich-based company lent its support to Munich’s bid to host the 2018 Winter Games.
The IOC typically halts conversations with a company that supports a bid to avoid the appearance that an Olympics can be bought with corporate dollars, and sources familiar with the IOC’s marketing approach said the organization planned to wait until after the 2018 Games were awarded to make a decision about whether to pursue a TOP deal with BMW or another auto manufacturer. When Pyeongchang, South Korea, won the rights to host the 2018 Olympics, the IOC decided to end its hold on the category.
“It’s the right decision,” said Rob Prazmark, founder of 21 Marketing, a sports consultancy that the IOC used to analyze its TOP program two years ago. “It’s a very emotional category for countries around the world … because automobiles are still grounded in tradition in terms of country of origin.”
Rio and Pyeongchang are the biggest beneficiaries of the decision, as both can now pursue sponsorships with an auto partner.
Auto sponsorships are typically categorized as tier one deals, a designation Olympic organizers reserve for the most valuable and lucrative sponsorships. Rio already has sold two tier one deals. It signed telecommunications consortium Embratel and Claro as its official telecom partner in a deal valued at more than $150 million, and Bradesco as its official financial services partner in a deal valued at $320 million.