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A good article from Ad Age that covers the plans major sponsors have to promote their brands during the upcoming World Cup in South Africa. It also talks about FIFA’s efforts to thwart ambush marketing campaigns from detracting from the 13 official World Cup sponsors. FIFA claims there were over 3,000 “rights violations” during the 2006 World Cup in Germany, so they are already being proactive to try to limit them at the 2010 World Cup. FIFA has created new rules to proactively prevent ambush marketing during World Cup matches. And FIFA’s lawyers have proactively started sending warning letters to brands to deter them from planning marketing events around the World Cup. One letter to South African airline, Kulula, prompted this humorous response from the airline on twitter:
“Oh dear, letter from FIFA’s lawyers says we broke their trademark of the use of ‘South Africa’ and think our non-WC ad was about soccer…Even the use of our national flag was an issue. It’s absolutely outrageous. We’ve signed over our country, its symbols and our economy to one [FIFA President] Sepp Blatter. Nasty.“
Although Kulula joked about it, the truth is they are not far from the truth. When your country lands one of these major events (World Cup or Olympics) they are going to be giving away some of their “rights” to FIFA or the IOC until the event is over. There were murmurs leading up the 2008 Beijing Olympics about the IOC counseling China on human rights issues, presumably to keep those abuses from reflecting negatively on IOC or the Olympic Games. That comes with the territory for any country granted one of these events; you are willingly taking on a partner who is going to have control on certain issues. So the people, and businesses, of South Africa better get used to that because they are going to be under FIFA control under July 12 – the day after the World Cup final is played.
Variety reports that Fox is planning to make a “major run” at securing the rights to broadcast the 2014 Olympics (Sochi) and 2016 Olympics (Rio). Fox would need to knock off incumbent broadcast partner, NBC, in order to land the Olympics. NBC has been the television partner for the Olympics since 2000, but have said they lost money to broadcast the most recently Vancouver Olympics. Fox is rumored to have bid much less than NBC (half is the reported number) for broadcast rights to ’08 & ’10 Olympics.
So how much will Fox bid on rights to the ’14 & ’16 Olympics? My guess is they bid somewhere in the $750 million range for each, which is well below the current broadcast rights on Olympics. NBC will lay out close to $2 billion dollars for the rights to broadcast the ’10 Olympics and 2012 London Olympics (chart of broadcast rights paid on Olympics). So the natural questions are why would Fox bid an amount lower than what it costs today? And does Fox stand a chance to win the broadcast rights for the Olympics?
I think Fox bids $750 million (-ish) for each of Sochi & Rio because that’s what they think they are worth. No network in their right mind should think that Sochi & Rio are going to have the revenue potential as London (2012) and Beijing (2008). So Fox’s bid will be closer to what NBC paid in Athens ($793 million) and Sydney (Sydney $705 million) earlier this decade. And it’s possible that Fox (and others) bid even lower on the 2014 Olympics, because Winter Games do not sell as well in the United States and Sochi isn’t a name destination.
I think Fox will have a shot, but probably loses out to NBC or ABC/ESPN. NBC has made the Olympics their thing, so I think it’s worth it to them to bid more just so they can continue to be the “Olympic Network”. ESPN is a sports media juggernaut 365 days a year, so they would have the potential to market the Olympics in a way we’ve never seen. It just seems those two networks should want the Olympic broadcast rights more, so I think ultimately Fox’s bid will fall short.
The International Olympic Committee (IOC) had to balance a lot of factors in selecting Rio de Janeiro as host city for the 2016 Summer Olympics over Chicago (and Barcelona & Tokyo). They had to consider which location had the facilities and infrastructure, they considered which city/country/continent was deserving (South America has never hosted an Olympics) and of course they had to consider which candidate would help the bottom line. Their financial considerations likely included which host city could bring lucrative sponsors and broadcast dollars. And while the potential pool for sponsors is global and the IOC sells broadcast rights to a multiple countries, the right host country will greatly increase the financial potential.
As the IOC begins negotiations for broadcast rights on the 2016 Olympics, they may finally be having a twinge of regret at not selecting Chicago as host city. That is because the IOC’s initial discussions with U.S. based broadcast rights partners has met with “tepid response“. The potential U.S. broadcast partners are already working on bringing down the IOC asking price. A normal negotiating tactic? Sure, but keep in-mind that NBC paid $2.1 billion for the 2010 & 2012 broadcast rights. That is the bar the IOC wants to surpass, but it seems unlikely they’ll be able to with the 2014 games in Sochi and 2016 in Rio. Winter Games don’t normally draw the big bucks like the Summer Olympics, as evidenced by the rumored $200 million that NBC will lose to broadcast the Vancouver Olympics, so Rio is the big ticket item.
Rio will surely be a fantastic host of the 2016 Olympics and they will open up plenty of new opportunities for the Olympics in South America. New sponsorships and new broadcast partners will be brought into the IOC family. But even with those positives, the IOC is now realizing that Chicago would have been a cash cow. If Chicago were the host city of the 2016 Summer Olympics, all of the major U.S. sports networks would be lining up to set the record on broadcast rights paid on an Olympic games. Chicago would have likely netted a broadcast rights deal north of $2.5 billion, which is the new mark the IOC and Rio have to try to surpass. If they don’t the IOC might for the first time have some regrets over picking Rio over Chicago.
Michael Phelps will need to be strong to haul around all of the checks from sponsors
Under Armour has signed swimmer Michael Phelps to an multiyear endorsement deal. The deal will have Phelps endorse Under Armour products that he wears to train “outside-the-pool”. It was structured that way because Phelps already has a lucrative endorsement deal with Speedo, whose swimsuits he wears during competitions.
This is a bold move for Phelps and Under Armour and appears to be a win-win. Under Armour picks up one of the most marketable, young athletes in the World for a pretty fair price (note: figures on the deal were not disclosed, but one expert estimated the deal at $5 million). Phelps insures that Under Armour will get plenty of coverage at the Summer Olympics, an event that has traditionally been dominated by Nike, Adidas and even Puma. This deal is also a great move for Phelps who already has the richest swimwear contract that Speedo has ever signed. It is like Phelps gets to double dip, by having two sponsors in the same genre.
The International Olympic Committee (IOC) has a group of “Top” sponsors that commit to support the Olympics for 4 years (one Summer Olympics & one Winter Olympics). Below are the top IOC sponsors for the 2010 Vancouver Winter Olympics and the 2012 London Summer Olympics:
Current Olympics Top Sponsors (Vancouver 2010 & London 2012):
Each of these companies pay close to $100 million, in cash or in-kind services, to be a Top sponsor for the Olympic Games. The IOC will pull in close to $1 billion dollars from these sponsors in Vancouver and London. Many of these companies sponsored the 2006 Winter Olympics and 2008 Beijing Summer Games as well. Adidas, Manulife Financial and Volkswagen were 2008 sponsors who dropped, while Acer and Atos Origin are new for the 2010 Games.
The Olympics is a great spectacle, but it’s no longer just about amateur athletic competition. The Olympics is big business these days with billions of dollars in sponsorship and television money on the line. So naturally there is a lot of back room politicking going on in support of all that money.
A new book by the former Chinese sports minister details some of the arrangements that allowed China to secure the 2008 Olympics. He claims that Chinese officials helped IOC President Jacques Rogge get re-elected in exchange for Rogge delivering the European vote in-favor of Beijing hosting the Summer Games. Full article here at the Times Online.
The IOC is generating a lot of money, but they try to focus attention on the grandeur of their events rather than the cash. But their secret ballot process allows their members to wheel and deal without fear of being exposed. These type of secret deals are not the exception, but rather the norm when it comes to the IOC.
I’ve been up & down about Chicago’s chances of landing the 2016 Summer Olympics. Early on I was high on them because I thought the United States was due to host another Olympics and Chicago is the right choice, right now. But soon after a dispute between the IOC and USOC changed my mind, I thought the USOC had ruined Chicago’s chances to host the Summer Games. The USOC eventually decided to back down on their decision to launch the Olympic Network without the IOC support, so that initial issue was resolved.
But then a few weeks ago another big issue came up which made me sure that the Chicago 2016 Bid Committee had no chance to win the vote of the IOC. A poll came out showing that less than half of Chicago residents were in favor of hosting the 2016 Olympic Games. So I once again assumed that Chicago’s hopes of landing the Games were shot. I even got plenty of comments from Chicago residents that all seemed to agree they didn’t want the Olympics in their town.
So what changed? Why did I go from feeling that Chicago was out of this vote (not just once, but twice) to feeling they are the odds on favorite? President Barrack Obama changed my mind. It was confirmed by the White House that President Obama will travel to Denmark for to make the pitch for Chicago in-front of the voters of the IOC. This is the same Barrack Obama who did what many thought would be impossible in winning the 2008 Presidential election. The charismatic leader who has captured the attention of the entire globe. He is almost always the coolest guy in the room wherever he goes, and certainly has a leg upon the PM of Japan, King of Spain or President of Brazil.
How can the IOC say ‘no’ to President Obama? They can’t, he’ll show up and sway the vote in-favor of Chicago. Much to the consternation of Rio de Janeiro, who was thought to be the front runner. It’s called holding an ace up your sleeve and the Chicago Bid Committee waited for the perfect moment to play their trump card. I would be shocked if the IOC doesn’t then vote Chicago as the host of the 2016 Summer Games.
The organizers of the 2012 Summer Olympics in London have to be kicking themselves this morning. As big as those Games are going to be (and they’ll bigger than Beijing) they are going to be missing one key ingredient that could make them even bigger, golfer Tiger Woods. Woods won’t be playing golf in London for the 2012 Olympics, but he could be competing in the 2016 Olympics because his sport was just approved for inclusion.
The IOC voted today to add golf and rugby as the two newest Olympic sports. Both sports will debut at the 2016 Olympic Games. These picks shouldn’t come as any surprise, except maybe those rooting for baseball to be picked. I predicted golf and rugby would be the finalists in an article I wrote a short time ago, although I did have a difficult time selecting between rugby & baseball for the second spot. I think baseball would have brought more sponsorship dollars than rugby, but it’s splitting hairs.
But now back to the more important question, can a 40 year old Tiger Woods win a gold medal at the 2016 Olympics? Woods would be 40 years old in the Summer of 2016, but should still be in the late stages of his prime as a golfer. So I wouldn’t put it past Woods to compete and win an Olympic gold medal in golf. It would be another unique accomplishment for Tiger to put with the stack he’s already accumulated, so he’s got the motivation. So I think Tiger Woods will be an Olympic gold medal winner.
I have always thought Chicago was a very strong contender to be selected to host the 2016 Summer Olympics. Chicago is a fantastic option for the International Olympic Committee (IOC) because it is an American city that is rich in culture, has solid infrastructure, the necessary venues to host competitions and a wealth of corporate sponsorship opportunities. So it already had a lot going for it, and then it got the cherry on top of the sundae when a Chicago Senator (Barack Obama) was elected President of the United States. It makes for a compelling pitch when the most powerful man in the free world is in your corner. I’m sure the host committee members from Chicago had to share my enthusiasm for their chances, they surely have been feeling pretty good about their bid against Madrid, Rio and Tokyo.
But their good feelings might now be changing to despair, because the latest feud between the IOC and United States Olympic Committee (USOC) is probably going to knock them out of contention. Just like a runner that leads the entire race only to pull up lame in the final stretch, it appears Chicago’s hopes of hosting the 2016 Olympics are going to suffer the same fate. The reason why I have moved Chicago from top contender to an also-ran in this competition has everything to do with the relationship of the USOC and IOC.
The relationship between these two sports governing bodies has been tenuous for awhile, but atleast it remained civil. But the two organizations are now fighting over whether the USOC has the authority to launch their own Olympics Network and the bad blood is spilling over into the media. A top IOC executive was quoted in the New York Times calling the USOC “arrogant” and saying they subverting the IOC. A day later the IOC issued a written statement that condemned the television plans of the USOC. The IOC statement said the USOC acted “unilaterally” in announcing their plans for an American Olympic Network. The COO of the USCO said he would be flying to Switzerland later this month to work out things with IOC officials.
So what is the big deal about this particular feud between the IOC & USOC? As I said these two organizations have feuded before. The problem here is the timing of this feud to the general assembly vote in November. That vote from the IOC will decide which city is selected to host the 2016 Games. Don’t think this latest act of defiance (in the eyes of the IOC) isn’t going to influence voters to select another country to host the 2016 Olympics. I would bet their have already been phone calls and emails between IOC voting members from other countries, who are developing plans to teach the USOC a lesson by not voting for Chicago.
An ugly mess if you ask me, and one poorly timed by the USOC. They project advertising revenue of $40-$50 million dollars per year from their new Olympic Network, but that is nothing compared to the billions an Olympics on US soil would have brought in. Why not wait until after the general assembly vote to announce your network plans? I’m sure there was a strategic reason for the announcement now, but I just can’t see any way for them to make this situation right in-time to salvage the 2016 Olympics bid of Chicago. Sad deal, because I think Chicago would have hosted a great Summer Olympics.
If you added up the entire population of the countries that make up North & South America, they still would not equal the number of people that watched the Opening Ceremonies of the 2008 Beijing Olympics. The Times of London is reporting that nearly 1 billion people (984 million) tuned in to watch all or part of the kickoff event from the Summer Games in China. And the report from Futures Sport + Entertainment does not account for people that watched in public places, which easily pushes the number over a billion.
That makes the Beijing Olympic Games Opening Ceremonies the most watched live event in the history of television. More people tuned in to the Birds Nest (venue that housed the event) than had ever watched a Super Bowl, World Cup Final or other sporting event in the past. The billion viewers number also greatly surpasses the largest non-live television audience, which was approximately 100 million viewers for the final episode of M*A*S*H in 1983.
The folks at NBC must be pretty excited to be a big part of that historic event. Even with technology enabling more of the World to have access to television, it is hard to imagine any upcoming event surpassing this record. At least until 2012 rolls around and we have the Opening Ceremonies for the London Games.