I have mixed feelings about Culture Secretary Andy Burnham’s announcement that post-Beijing, the Government will be launching a new initiative, called ‘Medal Hopes’, in a bid to raise £79 million from private sector sponsorship, plug a hole in the 2012 Olympic sports funding plan, and ensure athletes do not suffer funding cuts as they train for the London Games.
Like most Brits, I’ve rejoiced in the brilliant performances of Team GB in Beijing, applauded the fact that increased public sector funding of our Olympic sports has been a major factor in these performances, and welcome any initiative to attempt to ensure that what we’ve seen in Beijing 2008 is repeated in London 2012 – and, let’s not forget, Vancouver 2010.
I have no doubt that ‘Medal Hopes’ is well-intentioned. But based on Mr Burnham’s comments about what the scheme will be offering prospective sponsors, I do have serious doubts about the scheme’s viability, potential value to sponsors and, as such, whether it can realistically generate £79m. To explain why, let me concentrate on what Mr Burnham is reported to have said.
“This will be the only official route for an association with the team preparing for 2012.”
I’m assuming Mr Burnham has been misquoted here. If this is how ‘Medal Hopes’ is going to be positioned to the private sector, confusion will inevitably follow, because there are already three well-established routes for sponsors into an association with our Olympic teams and athletes, all of them official:
· Sponsor London 2012, which confers a number of rights, but in particular is the only way a brand can become an official sponsor of Team GB.
· Sponsor one of the National Governing Bodies of an Olympic sport. This confers no rights to Team GB or London 2012, but is clearly in the same territory, and there are already many of these deals in place.
· Sponsor individual athletes. Again this confers no rights to Team GB or London 2012, but is in the same territory and is a much-used tactic.
A related and massively important issue here of course, is that ‘Medal Hopes’ must be seen as complementary, not competitive, to these three existing revenue streams, all of which provide vital funding for London 2012, Team GB and the athletes.
“This Olympics has gripped people in a way I have never seen before. Everyone wants a piece of it. [Medal Hopes] is about saying to business – ‘get on board, join the effort’ - contribute regionally, nationally or whatever level you can.
A laudable rallying cry, but one which misses the essential point about how Olympic sponsorship is sold, and why it’s so valuable.
In relation to sponsorship, everyone cannot have a piece of The Olympics. It’s a premium asset, sold only to one brand in each category. They, and only they, are allowed to associate themselves directly with the Olympics. And these rights are fiercely protected by the Olympic authorities and worldwide legislation, which makes any attempt by non-sponsors to associate themselves with the Olympics punishable by law. This includes the UK, where as one of its commitments to IOC in return for winning the right to stage London 2012, the UK Government enacted new legislation expressly designed to prevent non-sponsors from passing themselves off as Olympic sponsors.
So, Mr Burnham’s rallying cry will no doubt have excited the private sector about Olympic sponsorship. But how will they react when they discover that, however much they want a piece of the Olympics or Team GB sponsorship pie, it’s not available to them unless a) they’re not a competitor of an existing sponsor, and b) they have the significant resources required to become a sponsor?
“The offer is an association with the athletes preparing for the Olympic Games.”
Exactly what ‘the offer’ is Mr Burnham didn’t make clear, and it’s possible to envisage non-sponsorship scenarios where businesses could be matched with the less well-known athletes – for example as employers. But as I’ve covered above, this wouldn’t come with a piece of The Olympics or Team GB attached. And in the case of our new Olympic heroes, many already have individual sponsorships in place, offers from new sponsors will already be flooding in and being signed, and the market value of all of them will now be out of reach of most businesses.
“There is also the possibility of naming rights of some of the Olympic venues (post Games) and this is something that needs to be explored with other stakeholders.”
I agree with Mr Burnham that this is a potentially significant source of revenue. Venue naming rights agreements can be worth tens of millions of pounds and more. But there are two problems with this proposed solution.
First, BOA Chairman Lord Moynihan has already raised the issue that naming rights to the Olympic venues can only be sold by arrangement with the BOA if the rights are to include use of the word ‘Olympic’, which reverts to BOA ownership in the UK after 2012. Second, and most importantly, these proposed venue sponsorships would not start until 2013 at the earliest, and in these straitened times I find it hard to believe there is a potential sponsor out there who would be prepared to start paying for a sponsorship until it starts. But DCMS need to raise the athletes’ £79 million well before 2012, starting now.
To re-iterate, I have no doubt that ‘Medal Hopes’ is well-intentioned and I applaud any initiative designed to support our Olympic athletes. But I have equally no doubt that if ‘Medal Hopes’ is going to succeed, it needs to be both attractive to UK businesses and complementary to the activities of London 2012’s other stakeholders. For that to happen, when it is finally announced, it will need much more clarity - and, I suspect, a radical re-think in the meantime.
By Tim Crow on August 22nd, 2008
Tags: Beijing 2008, DCMS, London 2012, London 2012 sponsorship, London 2012 sponsorship consultants, Olympic sponsorship, Olympic sponsorship consultants, Olympics, Team GB, Vancouver 2010
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