Terrence Burns | LA 2028: Back to the Future for Olympic Sponsorship

Terrence Burns, executive vice-president, global sports at Engine Shop, looks at the options presented to new organizations looking to become sponsors of the Olympic Games.

Terrence Burns

Whilst rummaging through boxes of old files, I happened upon my accreditation from the 1996 Atlanta Olympic Games (a “G” for those in the know). Those Games were my first foray into Olympic marketing, or sports marketing for that matter.

Two things struck me as I looked at my face from twenty-four years ago: one, where did all my hair go (?), and two, the wonder, excitement, and energy of being a first-time Olympic sponsor is still fresh in my mind.

During the Atlanta Games I served as the “Managing Director – Olympic Programs” for Delta Air Lines, the official airline of the Games. On 5 August 1996, the day after the closing ceremony, I left Delta and joined Meridian Management SA, the then-brand-new external marketing agency of the IOC (co-owned by the IOC).

I had no idea that the rest of my life would be a never-ending embrace of the Olympic Games, their values and ideals. I also had no idea how much I had to learn. I am still learning.

I’ve had the honor to work with many, many, new and existing Olympic sponsors in a variety of roles over the years – from my responsibilities at Delta to advising a new IOC TOP Partner today. And although each brand and industry has been different, they all shared similarities that made them fascinating and rewarding to work with.

New Olympic sponsors are like Olympic bid cities (I have worked for eleven Olympic bid cities) because they share one thing in common: they’re a blank page. They have the same sense of idealism, the same sense of wonder about the Games, and the same sense of “opportunity”.

Time, however, is one thing that is never on the side of an Olympic sponsor. The Games’ dates are set, the countdown has begun, and there are no do-overs in Olympic marketing. Similar to an athlete, one either nails his/her chance at Olympic success, or one doesn’t. It is a high wire act with no net.

IOC TOP Partners benefit from an ongoing, internal machine that produces and implements world-wide Olympic marketing programs for Games every two years. That is harder than imagined, which is why internal turnover at TOP Partners is essential to keep the property fresh and the company’s interest ongoing.

On the other hand, Organizing Committee (OCOG) partners, sponsors, and suppliers are often one-trick ponies. An OCOG is their one and only shot at the Olympics – although Delta went on to sponsor the 2002 Winter Games in Salt Lake City. Therefore, I often find new sponsors are more imaginative and daring. And at today’s OCOG sponsorship fee levels, they have to be.

LA 2028 has a stated domestic revenue goal of at least US $2.5bn (€2.3bn). Even at Tier 1 deal levels of $400m each ($200m for rights fees and $200m in NBC media inventory), that’s a big revenue bucket to fill. That means there will be a plethora of LA 2028 commercial partners completely new to the Olympic Games, and few with Olympic experience on US soil.

The good news for brands interested in LA 2028 is that there is a much longer Olympic marketing activation runway (2021-2028) than in any other Games in history. This means that sponsorship costs can be amortized over seven calendar years and four editions of the Olympic and Paralympic Games – Beijing 2022, Paris 2024, Milan-Cortina 2026, and LA 2028.

The other piece of good news is that a lot of the leadership team at the United States Olympic and Paralympic Properties (USOPP – the commercial joint venture between the United States Olympic and Paralympic Committee and LA 2028) are also new to the Olympics.

Why is that good news? Simple answer: new thinking equals new ideas.

Kathy Carter, chief executive and chief revenue officer of USOPP, and her leadership team bring a fresh perspective to what at times can seem like a dated, formulaic approach to Olympic marketing.

Their fresh strategy is evidenced by the LA 2028/NBC partnership, which includes media rights in certain sponsorship packages. Hopefully these hard media assets will help potential sponsors better evaluate LA 2028 sponsorship ROI.

For example, at Delta we had less than two years to plan and implement our sponsorship of the 96 Games. In those days, Delta was reeling from a struggling economy and poor economic results for the first time in its history. In reality, that was a blessing in disguise because, as we all know, necessity is the mother of invention.

Therefore, we focused on the things that mattered most to Delta’s overall strategy, and then set realistic, measurable business goals to support it. In the end we focused on a revenue goal, a brand metric goal, and a set of internal performance goals for employees. It worked.

So, what does all this have to do with LA 2028? A lot, actually.

Potential LA 2028 sponsors should look at the opportunity through a specific lens in order to answer one question: “How can an LA 2028 sponsorship add measurable value to our overall business strategy?” If a brand cannot answer that question honestly (and empirically), then it has no business spending money on an Olympic sponsorship.

Yet, many new sponsors continue to miss this point entirely. They spend a lot of time and money creating what can only be described as “stand-alone Olympic sponsorship plans” that are often a series of disjointed tactical activations all adding up to…who knows what.

Successful Olympic sponsors begin by determining how Olympic marketing rights fit into their existing, overall marketing strategy. Again, not rocket science but to a brand that is new to Games sponsorship, the sheer size and scope of it all can be bewildering.

Permanent mistakes are often made because for OCOG sponsors, Games sponsorship is typically a one-time event. Even Delta, should it become an LA 2028 partner, will have minimal 1996 and 2002 Games association in today’s consumers’ minds.

For the right brands, LA 2028 offers incredible OCOG sponsorship value because of its unprecedented seven-year activation timeline, the creativity and strength of the new LA 2028 sponsorship team, and the unique nature of the US sports marketplace, perhaps the most innovative in the world.

LA 2028’s challenge is convincing CMOs and boards that an investment of this size for an event seven to eight years in the future makes sense. That is where the 7-year, four-Games offer makes it all possible.

To use an old analogy, a sponsorship fee is a “cover charge” to get into the party, but if you want to dance with someone it takes more money. And, at a conservative sponsorship fee to activation ratio of 1:1, the all-in costs could be close to one billion US dollars for a Tier 1 LA 2028 Partner. A longer activation runway with multiple events makes this much more feasible, especially given LA 2028 OCOG rights are limited to the US territory.

Olympic sponsorship isn’t for everyone. It’s expensive and difficult to grasp from a “traditional” sports marketing perspective – ask any Fortune 100 Board Member to wrap his/her head around the Olympics’ Clean Venue Guidelines, or the Rule 40 and Rule 50 regulations. Good luck.

Moreover, the various levels and players in the Olympic Movement make it hard to prioritize, e.g., “in addition to our sponsorship, should we also acquire NGB rights, athlete rights, special OCOG program rights such as the Torch Relay…and if so, what kind and how much?” In the end, there will probably be 30 or more brands all touting a relationship with LA 2028. One needs to be smart in order to avoid being lost in the wallpaper. But it can be done.

What to do? Get in early, formulate a plan that neatly fits within your existing corporate plan, find a unique positioning or set of Olympic assets that are ownable and relevant, and finally, to borrow a phrase from American football, “flood the zone and smother the competition” because as an OCOG sponsor, you’ve only got one chance to win a gold medal.

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