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Volume 22 No. 23

Olympics

Corporate logos have been few and far between on the Olympic stage, but “natural or endemic” branding, such as Omega’s timing, that can be seen on camera will be a bigger part of the Games amid increasing sponsor demands.
Photo: getty images

The International Olympic Committee is taking steps to bring more commercial activity to the field of play, an effort sure to be watched closely by the sponsorship industry as top executives try to balance Olympic tradition with increasing sponsor demands.

Christian Voigt, the IOC’s No. 2 marketer, confirmed the organization is adopting a more liberal approach to branding that can be considered “natural or endemic” during competition, such as the Omega-branded timers and Panasonic-branded audio-visual equipment that can be seen on camera. He insists, however, that the IOC’s long-standing ban on billboards and venue naming rights is not open to review.

“It will always be natural or endemic branding, but I think we are pushing it a bit more, because we want to provide a return on investment for our partners without disrespecting the overall principle of the clean venue,” Voigt said. “But when it’s possible, we show a bit more flexibility for our partners, who are the ones who help pay for the Games. We want to give them benefits.”

The acknowledgement comes amid talks to renew Coca-Cola’s long-standing global sponsorship of the Games. Voigt declined to discuss specific negotiations, but the IOC is known to be seeking a much higher fee than Coca-Cola previously paid. Allowing, for instance, branded Powerade jugs on the sidelines could be a way to partly justify the escalation.

IOC brings on new head of business development

The International Olympic Committee has hired Dominic Wolz as its head of business development, a new senior position in television and marketing services that reports to Christian Voigt, vice president of marketing services.

“I needed some support for new assets, particularly as we dive deeper into the digital world,” said Voigt, who worked with Wolz at Puma. “And the second piece is helping me with the workload on the renewal side and the new business side.”

The IOC currently has 13 global sponsors, with German insurer Allianz signed to join the program in 2021. The 2018 agreement for the IOC to assume management of the International Paralympic Committee’s rights also has increased the workload. — B.F.

Coca-Cola’s last deal was finished at a time when most IOC deals sold for roughly $100 million per quadrennial, but more recent additions to the portfolio have paid between $200 million and $300 million.

Separately, the IOC also has begun formalizing a program broadly called “Games time experiences,” which mostly consists of behind-the-scene tours for sponsor guests or brand showcases near venues.

Like opening up some in-venue inventory for branding, this isn’t entirely new. Bridgestone activated a learn-to-golf experience outside the Olympic Golf Course in Rio, and Procter & Gamble guests got to visit the top of the ski jump in Pyeongchang. But those have been one-offs, at times laborious to negotiate with the sports federations and local organizers.

Now, Voigt said, the IOC is developing a comprehensive offering around a series of sports and venues that could work for sponsor engagements and potentially be sold exclusively to sponsors with a particular interest in given events. It’s also looking for an agency that can help execute the “Games time experience” concept.

Despite the incremental nature of the experiences and in-venue branding initiatives, they are important evolutions in the IOC’s thinking. Historically, Olympic sponsorship mostly just included intellectual property and lacked many of the assets now commonly included elsewhere in sports, such as media time, access to data, branded content or guaranteed impressions. But many experts believe the IOC’s usual approach must change if it wants to continue to increase revenue.

The U.S. Olympic Committee says it’s not done using the threat of decertification to force major changes upon national governing bodies, including shifting control away from sports insiders to independent board members.

The USOC’s plans to aggressively review all 50 nonprofits that operate individual Olympic sports have been known for months, but its methods and the stakes have come into new light this winter after actions against USA Boxing and USA Diving.

To avoid decertification, USA Boxing agreed to oust President John Brown and add four new independent board members this month, giving independent directors six out of 13 seats and the presidency. USA Diving is facing similar actions after a USOC investigation into self-dealing by board members, though the precise demands are unknown.

This comes after USA Gymnastics was forced in 2018 to rebuild its board from scratch, with an eight-member majority of independent directors out of 15. While that remains an extraordinary circumstance, it’s now clear that it won’t necessarily take a historic sex-abuse scandal to trigger changes.

“This effort is comprehensive,” said Rick Adams, the USOC’s chief of sports performance and NGB Services. “We are looking at several NGBs, each is unique, it is part of a significant commitment we’ve made to oversight, and we are committed to it for the long haul.”

USA Boxing has agreed to oust its president, John Brown, and change the makeup of its board after an investigation into conflicts of interest.
Photo: getty images

Nonprofit governance experts have long considered it a best practice to give at least half the voting power on boards to people with no vested interests in the organization or its business partners. But it’s a controversial change at many NGBs, which traditionally have formed their boards mostly of people who represent various constituent groups, such as local clubs, officials or coaches. The push for independent board members while also staying in line with federal law reserving 20 percent of board seats for athletes means the traditional constituencies are getting squeezed.

“You’re effectively asking members to give up some of their power, so it’s never easy,” said USA Curling CEO Rick Patzke.

Bylaws dictating board makeup vary widely from sport to sport. USA Curling currently has no minimum requirement for independent directors and guarantees 11 seats filled by regional membership elections. Its board can be as small as 19 people; currently it has 20, with two independent members. USA Bobsled & Skeleton requires at least four independents out of 11. USA Track & Field requires three independents out of 16.

Mark Conrad, director of the sports business program at Fordham University who has begun to study nonprofit sports governance, said meeting the legal definition for independence is not a solution by itself. But, he said, the need is clear: more board members who aren’t part of the system.

“The Larry Nassar story is basically the story of a mediocre medical professional who just got in with the right crowd at Michigan State, other clubs and ultimately USA Gymnastics,” Conrad said. “They didn’t scrutinize him. They kind of knew the guy and they didn’t ask questions. That’s really what the concern is.”

Some NGB insiders are suspicious of the USOC’s intentions and argue changes shouldn’t be forced on them unless there is a major crisis or act of wrongdoing uncovered. Others say there’s a good reason for the boards’ current structure.

For instance, the USOC has told USATF that its board is too susceptible to narrow partisan interests because so many of its members are elected by constituents. Eight of 16 board spots are elected, and USATF bylaws allow for the president, an elected position, to also be board chair. (The positions are currently held separately.)

Defenders say that having real influence over the board allows rank-and-file athletes and volunteers to speak out against wrongdoing.

“I think having an empowered volunteer base and athlete base, that’s part of what protects athletes,” said Becca Peter, an outspoken activist within USATF. Also, Peter said independent directors chosen at the USOC’s suggestion are subject to being overly influenced by the USOC.

Compliance checks and audits are an ongoing function of the USOC, and there’s no set timeline for them to be completed. USOC officials have not said how serious a problem would have to be to justify decertification or changes to the governing boards, and also say there’s not necessarily any particular wrongdoing that has to be alleged to begin investigations.

“There’s not a specific trigger, we’re looking broadly at any and all information that might come forward that would lead to this increased oversight,” Adams said.

But there is a continuum of potential issues. Gymnastics faced a major scandal, but compliance checks and audits have also uncovered other, more limited ways in which NGBs run afoul of bylaws, federal or state law, and anti-doping or anti-abuse regulations.

Max Cobb, chairman of the NGB Council, said the USOC is giving all boards involved ample notice of findings and chances to respond.