PROPOSAL

Sponsorship of opening Olympics ceremony

[Name of the Institute]

Sponsorship of opening Olympics ceremony

Introduction

Sponsorship is big business. Major international sporting events-—such as the Summer and Winter Olympic Games, and the World Soccer Cup-—command sponsor fees running into the hundreds of millions of dollars, via which each global sponsor acquires marketing rights to the all-inclusive use of the event, its images, and logos. Worldwide sponsorship generated $663 million in revenue for the 2001—2004 Salt Lake City/Athens Olympic cycle. This total was easily exceeded by the Torino/Beijing cycle, in which revenues jumped 31% to $866 million; 11 multinational sponsors paid an average of $72 million each. More remarkably, these numbers represent only the fees for sponsorship rights; sponsors still had to pay for the advertising itself. Subsequent estimates placed total Olympic ad spending at an additional $1.5 billion. Indeed, Visa alone was estimated to have spent $886 million on its of?cial sponsorship of the 2008 Olympic Games (CNBC, 2008). It can cost $200 million to sponsor a soccer team in Europe's Champions League, or to sponsor the UEFA Champions League-—the club championship of European football-—and all that buys is the right to use the name of an event, a team, or an organization.

Background of the Study

Activation-—or promotions, competitions, television advertising during breaks, corporate hospitality, and so forth-—can easily multiply a sponsor's budget two or three times over, for in sponsorship it is not what the company has, it is what it does with it (''Sponsorship Form,'' 2008). When a ?rm invests hundreds of millions of dollars in a sponsorship, and many millions more on marketing efforts to exploit that sponsorship, it embarks on a promotional journey that may help establish it as the uncontested brand in its category; consider Coca-Cola (soft drinks), Visa (credit cards), and McDonald's (fast food) as examples. At the same time, it exposes itself to an array of counter-attacks by competitors who have either chosen not to exploit the sponsorship opportunity, or who have simply not had the resources to do so. The consequences of these competitor reactions can be serious. Despite the efforts of event organizers and legislation enacted by host governments (whether genuine or sham) to protect sponsors, it seems that some competitor reaction is inevitable. Recent history provides a number of worthwhile lessons for marketers and sponsors to learn, or ignore at their peril. As regards Olympic Games, the choice of last torchbearer-—the athlete who lights the stadium ?ame-—usually has some symbolic signi?cance. At the 1960 Tokyo Olympiad, for example, the last torchbearer was a person born on the day the atomic bomb exploded over Hiroshima. The choice was felt to symbolize Japan's rebirth from World War II (Balfour, 2008).

China's choice as torchbearer for the 2008 Beijing Games was Li Ning, a former gymnast who won six medals-—including three golds-— during the 1984 Los Angeles Games, China's ?rst big sortie into the Olympics. Before a packed stadium and a worldwide television audience estimated at 4 billion viewers, Li Ning ran around the inside perimeter of the ...