Corporate sponsors dare not miss China's 'coming out party' in Beijing

MEDIA & MARKETING:WITH JUST 127 days to go until the first athletic event of the 2008 Beijing Olympics, it is stories of the political variety rather than the sporting kind that are making the headlines.

China's backing of Sudan and that government's violent control of the Darfur region, not to mention its continuing presence in Tibet, is making official Olympic sponsors nervous. Indeed, even Advertising Age, the industry weekly magazine, has urged Olympic sponsors to make noise about China's human rights policies.

It is predicted that the Beijing Olympics will be the International Olympic Committee's (IOC) biggest marketing programme in history. With 1.3 billion potential consumers in the Chinese market, global Olympic sponsors, as well as sponsors of the Irish Olympic team, are unsurprisingly reacting with caution to the boycott calls.

So far, Coca-Cola and other sponsors have taken the position that the problem in Tibet is an issue to be resolved by the government, and not something to concern them.

The sponsors of the Irish team - ACCBank, Asics, Penneys, Volkswagen, Ballymore, Lifestyle Sports and Lenovo have taken a similar stance. The official line from ACCBank is that the games in China remains "an excellent opportunity to provide funding and support to Irish athletes."

Another Irish team sponsor not wishing to rock the boat is Seán Mulryan's property firm Ballymore. "Our founder Seán Mulryan is a keen sports person - involved in helping four GAA county sides, horseracing and soccer," said Ballymore's marketing manager Paul Keogh. "Our involvement in the Olympics is borne out of helping the athletes in Ireland and we hope our sponsorship goes some way to help them compete with some of the bigger nations that have far more resources. As long-term sponsors, Ballymore does not comment on local venue issues."

Lenovo's country general manager in Ireland Fiona O'Brien said Lenovo is aware that a number of organisations worldwide have used the Olympics to express their positions on political issues, but added that "the spirit of the Olympics is that fair play and sportsmanship can bring the people of the world together in a non-political arena".

Those sponsors looking for top billing are recruited by The Olympic Partner (TOP) programme, established in 1985. Managed by the IOC, it is the only sponsorship with the exclusive worldwide marketing rights to both winter and summer games.

Sponsorship revenue from the Beijing Games is expected to exceed $860 million from companies including Coca-Cola, Atos Origin, GE, Johnson & Johnson, Kodak, Lenovo, Manulife, McDonald's, Omega, Panasonic, Samsung and Visa.

For Olympic partners, there are tangible benefits to be gained from their association with the games. Xerox doubled its annual growth in Australia to 20 per cent in 2000 after it sponsored the Sydney Olympics, while Visa achieved record volumes of card payments totalling nearly $14 million in 17 days during the Sydney Olympics, and saw its volume in Salt Lake jump 30 per cent to over $40 million during the Salt Lake winter games.

Licensing in China is highly subjective and, in the past, the government there has retaliated to unwanted foreign actions by cancelling contracts or restricting market access. No surprises then that none of the TOP sponsors are willing to speak out.

McDonald's said in a statement: "Concerning political issues, these need to be resolved by governments and international bodies such as the United Nations where they can most effectively drive discussions, diplomacy and help speed solutions."

Another company which is set to have a major presence at the games is Adidas, which has signed up as the Official Sportswear Partner. Adidas is one of few firms to have expressed concern about the current goings-on in Tibet, but nevertheless it is going ahead with its sponsorship. It said recently: "We are concerned about the recent situation in Tibet. We hope that the situation will calm down very soon. We believe that a boycott of the Beijing Olympic Games would be counter-productive and we have therefore reiterated our commitment to the 2008 Beijing Olympic Games."

The opinion that "boycotts don't work" is also one shared by Pat Hickey, president of the Olympic Council of Ireland, president of the European Olympic Committees and Irish member of the IOC.

Recently a group of 153 Tibet organisations sent a letter to Coca-Cola chairman and chief executive Neville Isdell demanding that the company withdraw its sponsorship of the Olympic torch relay and lobby the IOC to cancel the leg of the relay passing through Tibet and via Mount Everest.

However, Coca-Cola, has stated that while it would be inappropriate "to comment on the political situation of individual nations," the company firmly believes "that the Olympics are a force for good."

Or, as Reuters journalists Michele Gershberg and Paul Tomasch wrote recently: "The potential gains from participating in what some describe as China's 'coming-out party' as a world power still outweigh the disadvantages caused by the turmoil."

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siobhan@businessplus.ie