- The Washington Times - Thursday, January 19, 2006

It is a contrast of Olympian proportions.

Organizers of the Winter Olympic Games next month in Turin, Italy, have scrambled to sell tickets, find sponsors and close a budget shortfall of nearly $100 million.

In Beijing, home of the 2008 Summer Games, sponsors are signing on at record levels for what is expected to be the most profitable and well-attended Olympics in history.

The Turin Games have been dubbed the “stealth” Olympics, in large part because businesses are so focused on the Beijing Games and the chance to break into a largely untapped Chinese marketplace.

“The Beijing Games are just tantalizing for corporations,” said David Carter, executive director of the University of Southern California’s Sports Business Institute. “I’m not sure if they’re downplaying [Turin], but they certainly are shifting their focus. It does seem like there’s a disproportionate amount of attention being paid to Beijing.”

The Beijing Games likely will receive more than $1 billion from corporate sponsors — more than double the amount received from sponsors by the 2004 Athens Summer Games and two-thirds of the entire budget for the Turin Olympics.

Traditionally, 11 sponsors are named the “official” providers of a product or service for the Olympics. Those sponsors sign four-year deals that include both a Winter and Summer Games. The value of those deals for the Beijing Games has soared. The sponsors paid an average of $78.9 million for the 2006 and 2008 Games, up from $54 million for the events in 2002 and 2004.

“Sponsors look at [the Beijing] Games as a tremendous opportunity,” said Joe Goode, a spokesman for Bank of America, an official sponsor of the U.S. Olympic teams in 2006 and 2008. “It’s a burgeoning market. The opportunities are boundless.”

Mr. Goode said Bank of America likely will use the Olympics to entertain clients but also to promote its recent investment in China Construction Bank. Visa International, one of the longest-running sponsors of the Games, hopes to profit from China’s gradual shift from a cash-based society to one that uses debit and credit cards.

“The doors to China are open with a property like the Olympic Games,” said Michael Lynch, Visa’s senior vice president of event and sponsorship marketing. “We can hardly imagine the potential for a company like ours.”

A direct comparison between the Turin and Beijing events is difficult. The Summer Games always are larger, and the population of Turin is less than one-tenth that of Beijing. However, Turin appears small even when compared to previous Winter Games.

Turin officials are struggling to sell 1 million tickets, a benchmark that, if reached, still would be the lowest total since the 1992 Winter Games in Albertville, France. The 2002 Winter Games in Salt Lake City drew 1.5 million spectators and made a profit as a result of heavy sponsorship. The Beijing Games are expected to turn a profit and draw a record 10 million fans. Turin will struggle to break even.

“I can’t think of another time in which the future market was viewed as so much better than the existing one,” said Paul Swangard, director of the Warsaw Sports Marketing Center at the University of Oregon. Turin “will never be looked upon as an Olympics where businesses leverage the heck out of it because it has so much upside.”

Some Olympic sponsors say the World Cup soccer tournament in June has diverted their attention — and their money. Olympics fatigue also plays a role: The buzz about Turin has been subdued in part because the Games are being held just 17 months after the 2004 Summer Games in Athens.

Still, the driving factor is China and its 1.3 billion potential consumers.

“Corporations look at this as the next big platform to take their business to the next level,” said Jan Katzoff, chief executive officer of SportsMark Management Group, which represents several top Olympic sponsors. “It’s the enormous potential of the Chinese consumer and the population.”

China has the world’s fourth-largest economy with a gross domestic product of about $2 trillion, and it has been growing rapidly in the past decade. That economy could be the world’s second largest by 2008, trailing only the United States.

But for many corporations, China remains an untapped resource — one that could more easily be tapped on the grand stage the Olympics provide.

The business potential for the Beijing Games was not lost on International Olympic Committee President Jacques Rogge when he announced the marketing plan for the event more than two years ago.

“We are literally and symbolically opening the gates to the future,” he said. “For leading global companies, the Games will open the gates to the most important market in the world.”

Sponsors will face restrictions in Beijing, however. Their advertising can’t contain the Chinese flag or emblem. It may not include anything the government deems to be harmful to the public interest or likely to promote social instability. And it can’t make certain claims about a product that would be standard elsewhere, such as calling it “the best.”

“Up until this point, it has been a significant learning experience,” Mr. Katzoff said. “You have to figure out how to work with the Chinese government. … It’s been challenging.”

Other sponsors say the Olympics offer great exposure, regardless of where it is held. Several companies, including Coca-Cola, have signed contracts to be Olympic sponsors through 2020, for events for which host cities have not been chosen.

“China is very much embracing the Olympic Games, but we’re really investing in the long term,” said Phillip Bodzenta, Coca-Cola’s global marketing director. “We see a very good match between the values of the Olympics and our brand values.”

But come this spring, when the 2008 Games will be a little more than two years away, it will be all Beijing, all the time.

“Once the [Winter] Games are over in March, you’re going to see an unbelievable focus like we’ve never seen before on Beijing,” Mr. Katzoff said.

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