Sponsors treading Olympic road

As they cheer on their athletes in Beijing, American Olympic officials are trying to secure their own gold – corporate sponsors.

The US Olympic Committee is losing General Motors as one of its five top-tier sponsors but scored a victory last month when Anheuser-Busch renewed through the 2012 London Games. The rest – AT&T, Bank of America and The Home Depot – are still negotiating possible renewals.

With sponsorships costing more than $10 million ($36.7m), USOC officials are working harder than ever to close deals at a time when companies are cautious about spending and have more options, from college sports to stock car racing.

"I think they are more challenged today because of all the choice and the short window when they get the spotlight," said Tony Ponturo, Anheuser-Busch's vice-president for global media and sports marketing.

Anheuser-Busch, which also sponsors American football, basketball, baseball and football's World Cup, weighed the cost and decided the Olympics was a good deal, Ponturo said.

He said the games have a special emotional appeal and, unlike many sports events, connect with women, a sought-after market.

"You'd almost say the Olympics is an event beyond sports," he said.

Anheuser-Busch and other sponsors declined to disclose financial details. But Ponturo said the St Louis-based brewer's deal in July cost in the "double-digit millions" and was about the same as previous sponsorships.

Rick Burton, chief marketing officer for the USOC, said he "wouldn't disagree" that the group is working harder to close deals.

"The companies have to make sure that being associated with the Olympics is going to help them ring their cash registers," he said.

But Burton said the "monster ratings" for TV coverage of Beijing should help to confirm the value of sponsorships.

"If Michael Phelps swims for an eighth gold medal, the TV ratings are going to be through the roof," he said.

Bank of America is likely to renew but is reviewing whether the Olympics fits its marketing, spokesman Joe Goode said. The North Carolina-based bank also sponsors Nascar and American professional football and baseball.

Goode said Bank of America has found that customers who know about its Olympic support are twice as likely to consider using the bank and to recommend it to friends.

"There's a real business advantage to our USOC sponsorship," he said.

The USOC and sponsors face a rapidly changing market with the rise of the Internet and mobile phones, the spread of cable, satellite and Web-based TV, the popularity of events such as Nascar and a new marketing focus on women and minorities.

"It's all a very competitive marketplace now," said Rick Dudley, president of sports marketing company Octagon. "The price has gotten so high that these decisions go all the way at least to CEO-level executives, if not to the board."

The USOC suffered a blow when GM announced it would not renew its sponsorship after it expired this year. GM cited changes in strategy and an evaluation of its return on advertising spending. The cost of GM's Olympic ties reportedly ran as high as $900m, including TV advertising and vehicles provided to athletes.

Burton said USOC should be able to find a successor.

"If you're looking at the Olympics in terms of these monster ratings and the stories that are coming out. It's a pretty attractive place to be," he said.

Sponsorships can carry costs on top of advertising and payments to the USOC. The Home Depot helps to support Olympians during training by giving them part-time jobs at full-time pay. The company says 300 athletes have passed through the programme.

A Home Depot spokeswoman, Jean Niemi, declined in an e-mail to comment on its sponsorship talks. An AT&T spokesman, Felix Wong, did not return phone calls.

Among the six second-tier USOC sponsors, insurer Allstate, Hilton Hotels, Nike and 24 Hour Fitness Worldwide have renewed through 2012. The newspaper Sports Business Daily said second-tier status cost Allstate $10m to $12m.

Kellogg's and United Air Lines have yet to announce a decision.

Anheuser-Busch's deal gives it first claim on advertising time for beer during Olympics broadcasts in the United States and allows use of American Olympians in ads. In a reflection of its focus on selling to women, Budweiser ads feature swimmer Amanda Beard and track and field star Brianna Glen.

Bank of America's marketing includes Olympic-themed debit cards and a website for fans to record cheers for athletes. Goode said fans have recorded 6,000 cheers and the site has drawn 12m visitors since April.

The USOC's Burton, who led a seven-member marketing team to Beijing, said he was meeting with sponsors and potential sponsors, though formal negotiations on renewals would wait until the games end on Sunday.

Still, he said, "I think you're going to read probably about some more renewals before these games are over."