The U.S. Olympic Training Table

Perhaps you've noticed that, unlike in past years, every third cookie and breakfast cereal in your local grocery is not an official product of the U.S. Olympic team. This situation did not come about by chance. It reflects a shift in the Olympic-sponsorship structure from individual products to corporate sponsors.

Of the 41 sponsors of the 1988 U.S. Olympic team, only eight are in the food category. This does not mean that our athletes aren't getting fed. It means that the chow is coming from fewer sources. Based on the products that the food sponsors produce, here is an artist's conception of the Olympic training table. For a more complete appreciation of food sponsors, read on.

Long before America's best amateur athletes competed for the honor of representing the U.S.A. in Seoul, South Korea, the country's leading corporations were battling one another for the more tangible rewards that may accrue from Olympic sponsorship. And you might be surprised at the prizes. Familiar U.S. giants--Coca-Cola, Eastman Kodak, Federal Express, 3M, Time, Inc., and VISA--have all become official sponsors of this year's Olympic team from ... Brunei. Of course, Brunei was not singled out. Those companies are also sponsoring teams from Bahrein, Belize and Botswana.

It's all part of a major change in Olympic marketing. In 1988, for the first time, the International Olympic Committee (I.O.C.) is selling world-wide sponsorships. Nine corporations paid an average of $14,000,000 each for the privilege of paying more than lip service to the trendiest buzz words in international marketing--global strategy, local tactics.

•

Here's how it all started (try to keep the initials straight!):

In 1985, the I.O.C. hired I.S.L. Licensing AG of Switzerland to negotiate rights fees with all 167 national Olympic committees (N.O.C.s) and resell them in a global-sponsorship package called The Olympic Program (T.O.P.). Rob Prazmark, the enthusiastic marketing V.P. for I.S.L. in New York, says the I.O.C. realized it was at an important juncture before the 1984 games. Funding had become too dependent on TV revenue and, with the Los Angeles and Sarajevo committees aggressively selling sponsorships to amass a combined total of $147,000,000, there was too much confusion over rights.

However, the biggest concern, says Prazmark, was that "teams were becoming polarized. Fifteen or 20 teams could raise money, but countries such as Ethiopia had no government support, no private-sector support. In 1984, for the poorer countries, it became an Olympic event just to get them there."

I.S.L. made a list of 18 global industries and broke it into 44 product categories. Although unable to get coverage in every industry and category, I.S.L. managed to persuade 154 N.O.C.s and nine corporations to participate in the program, raising about $125,000,000. The revenue from those companies alone equals the total funding that Peter Ueberroth raised from all sponsors of the 1984 Summer Games.

The I.O.C. distributes the fees paid by the companies "in about 157 ways," Prazmark says. A portion goes to the organizing committees of the games, and the balance is spread proportionately among the N.O.C.s of each country. Thus, the United States Olympic Committee, representing the American market, receives a bigger share of the loot than, say, the committee from Burkina Faso.

In return for their T.O.P. contributions, the companies get use of the five interlocking Olympic rings, the privilege of sponsoring the Winter and Summer Games, on-site exclusivity to show and sell their service or product, and--this is the big one--permission to call themselves sponsors of each of the 154 national teams in the program.

So it is that Brother Industries, a Japanese company, promotes itself in Canada as the proud sponsor of the Canadian Olympic team and in the U.S. as the proud sponsor of the U.S. Olympic team. The structure makes for a truly curious marketing spectacle: nine fervently capitalist companies engaging in a program of global socialism that transcends petty nationalism--all the while exploiting nationalistic sentiment--for the purpose of advancing international capitalism. The system works!

•

Just what is an Olympic sponsorship worth? In a 1985 survey conducted by I.S.L. in Portugal, Singapore, West Germany and the U.S., the Olympic rings earned a bronze medal in logo identification, with Shell and McDonald's taking the gold and the silver. The research showed that a majority of people in each country believe the Olympic symbol "signifies endorsement of the product by organizers of the games" and that about one third of the people in each country are more likely to buy a product carrying the Olympic designation.

Persuasive stuff, but the T.O.P. sponsorship fee is still a lot of money. "Too much," says Warner Canto, marketing V.P. for American Express, which turned down I.S.L.'s $15,500,000 invitation. I.S.L. cut the asking price to $14,500,000 and found a buyer in VISA. In the battle of the plastic, VISA was quick to capitalize on its buy: For its ongoing advertising assault on American Express, it used the headline "at the 1988 Olympics, they will honor speed, stamina and skill. But not American express."

VISA promotion manager Christine Koncal says that U.S. sales, which account for 65 percent of VISA's business, increased 20 percent during the fourth quarter of 1987, when the company was running its "Pull for the team" promotion, in which a portion of cardholder-transaction fees was donated to the U.S. team. That was nine percent more than VISA bean counters had projected, and the program is continuing through September. But perhaps the biggest gain for VISA was an agreement it reached to issue credit cards in the Soviet Union.

•

While the new global-sponsorship structure has improved the over-all Olympic-funding outlook, it threatens to dilute national allegiances. How will a U.S. fan feel on learning that Coca-Cola is also funding the Soviet team? I.S.L.'s (concluded on page 164) Olympic Training Table (continued from page 96) Prazmark points out that T.O.P. funds go to the national Olympic committees, not to the governments. And the companies, he says, "don't treat themselves as American corporations. They treat themselves as global corporations."

Donn Osmon, marketing-and-public-affairs V.P. for 3M, which does 40 percent of its business overseas, differs slightly with Prazmark's observation. "Oh, we do see ourselves as an American company," he says. "That's why we're supporting the U.S. Olympic Committee. But at the same time, the people in our Canadian company see themselves as Canadians supporting the Canadian Olympic Committee."

Although 3M does business in the U.S.S.R. and some of its products there are branded with the Olympic logo, the company is not openly pursuing Soviet-team sponsorship for marketing gains. But 3M is promoting itself as a team sponsor in Japan, where its Scotch brand tape has taken over the number-one slot in video-cassette sales, outselling TDK and Sony.

All of which points up another irony. While Americans infected with Olympic fever tend to view the games as a U.S.-vs-them confrontation with the Russkies, in the Olympic marketing area, them's the Japanese. Eight of the nine companies entered in this year's Olympic sweepstakes are based in the U.S. and Japan. Given the current world-trade situation, it seems fitting that in this, the first Olympics of global marketing, the anchor relay of the race for market share is being run in South Korea. And with I.S.L. already soliciting entry fees for 1992 (don't say Dick Gephardt didn't warn us), can Hyundai be far behind?

Olympic Feed Bag

"We're no longer into the official widget," says John Krimsky, Jr., deputy secretary general of the U.S.O.C. "If Skippy peanut butter is my sponsor, and it is, then I am not going to permit six other brands of peanut butter to advertise as sponsors of the 1988 Olympic team."

To avoid the product clutter, the U.S.O.C. broadened its categories. M&M/Mars, the official snack food of 1984, wanted to be a sponsor, but, Krimsky says, "They wanted me to define confections as snack foods. And I could not define a piece of candy as a potato chip." Instead, he sold a category called "confections and snack foods" to Nabisco.

Here are the participating companies and their products. Campbell Taggart: Break Cake, whole-grain breads. Coca-Cola: Coke, Minute Maid orange juice, Sprite, Tab. CPC Best Foods: Karo corn syrup, Golden Griddle pancake syrup, Hellmann's mayonnaise, Mazola Oil, Mueller's pasta, Skippy peanut butter. General Foods: Maxwell House Coffee. Holly Farms: preroasted chicken. Maverick Ranch Association: fresh and frozen beef and beef products. McDonald's. RJR/Nabisco: Butterfinger, Del Monte Fruit Snacks, Life Savers, Planters nuts and snacks. And from its Biscuit Division: Almost Home Family Style Cookies, Chips Ahoy!, Fig Newtons Cookies, Lorna Doone Shortbread, Nutter Butter Sandwich Cookies, Oreo Sandwich Cookies, Premium ers, Ritz Crackers, Triscuit Thins Snack Crackers and Butter Peanut Chocolate Saltine Crack-Wafers, Wheat others.