Going for the Green

By Stephen Koepp

Olympic sponsors look for big payoffs from their million-dollar promotions

Companies ranging from McDonald's to Motorola are preparing for next month's Summer Games with all the drive and determination of the athletes. In the first Olympics to be paid for largely by businesses, these firms have staked huge amounts of cash and pride on what they hope will be an uplifting 16 days of sports. Company officials, though, can get butterflies when they think about the uncertainty of their investments. The pullout of athletes from the Soviet Union and 13 other countries could hurt TV ratings and dampen press coverage of the Games. The unprecedented clutter of Olympic-oriented promotion could inspire public indifference and confusion. Or, in the worst case, some disaster or embarrassing incident might occur at the Games that would cast a shadow over the sponsors' brand names. Admits William Scott, chief Olympic planner for the Southland Corp., owner of the 7-Eleven chain of convenience stores: "There are a lot of things scary about it."

Corporate America has bet money on sporting events before, but the Los Angeles Olympics will be the biggest sponsorship deal in history. To help operate and supply the Games and train U.S. athletes, scores of firms have donated upwards of $180 million to the U.S. Olympic Committee and the Los Angeles Olympic Organizing Committee. The companies will spend an additional $500 million on advertising and promotion to trumpet their participation in the hope of boosting prestige and profits. Most sponsors claim to be confident of being paid back amply in public good will and employee morale. Says Xerox Spokesman Sandy Lanzarotta: "If there is anything in the world positive to be associated with, it is the Olympics." Adds Brian Porter, manager of Olympic marketing for Anheuser-Busch, an $11 million sponsor: "We feel the Games are the ultimate in amateur sports. We would be embarrassed not to be involved."

The financial stakes are highest for the 32 sponsors of the Games, who each paid the Los Angeles committee from $4 million to $13 million in cash, goods and services. Though such notable firms as Johnson & Johnson scorned that particular deal as too costly, the committee easily filled its roster. Sometimes it did so by playing on corporate rivalry. Says Peter Ueberroth, president of the Los Angeles committee: "The way you approach McDonald's, for instance, is to go in there and drop the name Burger King or Wendy's."

The notoriously hard-bargaining committee managed to extract truckloads of money and merchandise. M & M/Mars donated $5 million and sweetened the deal with 500,000 Snickers bars and 500,000 bags of M & Ms candies. Levi Strauss will put clothes on all 700 U.S. athletes and coaches plus some 40,000 staffers at the Games, from Ueberroth down to the parking-lot attendants. IBM has lent 200 of its Personal Computers and 190 word processors, among other gear.

This bounty buys each company the privilege of putting official Olympic symbols and themes into its advertising. In addition, there are other perquisites. The 32 sponsors, all of which plan to entertain employees and customers at the Games, will be allowed to buy blocks of tickets amounting to almost 10% of the total supply of 7.7 million. Atlantic Richfield, for instance, plans to buy some 18,000 tickets. Some sponsors will also be permitted to sell their products at the sites of the events. Coca-Cola, the official soft drink of the Games, plans to set up 100 kiosks at the Los Angeles Memorial Coliseum and other locales. Another sponsor, Fuji Photo, hopes to flood the Games with its green-white-and-red boxes of film.

Sponsors are making sure that no one misses their Olympic support. First Interstate, the official banking sponsor, crowned its Los Angeles skyscraper with a 26-ft. lighted replica of the Olympic stars-in-motion logo. Fuji plastered the company name and Olympic symbols on a 164-ft. blimp and flew it on a publicity tour from North Carolina to California.

For the sponsors, the thrill of victory will come from a gain in sales. They were given support in February by a survey in Advertising Age, which reported that one-third of consumers said they would be more inclined to buy a product if it were tied to the Games. Still, some sponsors are concerned that their message will be diluted by the superabundance of advertising with Olympic themes. By limiting the number of full-fledged sponsors, the Los Angeles committee tried its best to create an elite group. This compares with the rug-bazaar atmosphere of the Lake Placid Winter Games in 1980, when 381 brands wore the official label.

Yet a host of other companies have found ways to get into the 1984 act in one way or another. Some 38 firms will be official suppliers for the Games, 44 have contributed to the U.S. Olympic Committee's training effort, and about 200 support American track-and-field competitors. Result: Muzak, for instance, will be entitled to tout itself as the official supplier of canned music to the Games, and Rolex can call its products the official watches of the U.S. equestrian team. The waters of the Games are a pool of confusion. Perrier is the official mineral water of the Olympics, while Los Angeles' Arrowhead is the official drinking water, and Sparklett's, another Southern California firm, provides the official water for the U.S. track-and-field trials.

Fuji thought it pulled a coup when it anted up more than $4 million to become a full sponsor after Eastman Kodak rebelled at the price. But then Kodak struck a quick deal to become the sponsor of the U.S. track-and-field team for less than $2 million. Complains Fuji Vice President Carl Chapman: "It is confusing. The public cannot make sense of all the different symbols."

The problem is worsened by companies that make no sponsorship claim but implicitly tie themselves to the Games. American Tobacco, whom the Los Angeles committee would not touch with a vaulter's pole, is boosting Lucky Strike Filters with an Olympic-trip sweepstakes. The makers of Nike shoes have given an Olympic look to their TV commercials and billboards by casting them with Track Star Mary Decker.

Such firms had better be careful. Both the U.S. and Los Angeles committees keep an almost fanatical watch on the proper use of their trademarks. Congress in 1978 gave the U.S. committee exclusive rights to the interlocking-rings symbol and even the term Olympic, while the Los Angeles committee has copyrighted the stars-in-motion logo and Sam the Eagle mascot. The group employs twelve detective agencies to track down unauthorized users of its symbols. When violators are found, the committee's lawyers go to court as fast as Carl Lewis does the 100-meter dash. They will reprimand even the main sponsors, as they did when Coca-Cola produced souvenir pins of Sam improperly grabbing a can of Coke.

Possibly the main concern of the sponsors is that the East bloc's pull-out will diminish consumer interest in the Games. Without the Soviets, says Robert Buchanan, executive vice president of the J. Walter Thompson ad agency, the contest "will be like debating with an empty chair." But then he adds hopefully, "Perhaps patriotism will cause Americans to rally round the Olympics. Controversy always attracts a bigger audience." In a poll last month by Grain's Chicago Business magazine, 14% of the local TV viewers surveyed said they would watch the Games less because of the Soviet boycott. Says Jerry Solomon, executive vice president of the D'Arcy McManus & Masius ad agency: "Nobody is changing their promoting plans. We're going full steam ahead as though nothing happened."

The confidence of advertisers in the Olympics comes from recent experience in sports sponsorship, which is currently one of the hottest promotional vehicles. According to the industry rule of thumb, $1 million spent on sponsoring a sporting event will make the same impression on the public as $10 million worth of other advertising. Says Barry Pavelec, executive director of the Center for Sports Sponsorship: "A company can instantly pick up an identification with the life-style or attitude that the sport reflects."

The sponsors have managed to shrug off the unflattering criticism about the commercial atmosphere of the Games. Wags in the European press have dubbed them the McLympics. The Nation,the liberal U.S. weekly, griped, "The whole event is beginning to look like a TV docu-drama about the last days of capitalism." The Soviets, before they withdrew their athletes, even made the absurd claim that the business support of the Games is an effort to cover up such corporate misdeeds as food poisoning and monopoly building.

The Los Angeles committee convincingly defends the capitalistic way. Says Dan Greenwood, the committee's head of sponsorship: "If you pulled out corporate support, amateur athletics in this country I would dry up virtually within a gyear." The committee is almost obsessive about maintaining a tone of dignity about the Games. No billboards, for example, will be allowed within sight of the playing fields. Says Greenwood: "Is there a risk of these companies' taking over the Games? Certainly not. They would be destroying the very thing that makes the Olympics valuable to them." The companies have shown some restraint. Says 7-Eleven's Scott: "Everyone is very sensitive about it. The Olympics require a certain amount of taste. We don't plan to have a discount Olympic Slurpee, for example."

--By Stephen Koepp.

Reported by Steven Holmes/Los Angeles and Thomas McCarroll/New York

With reporting by Steven Holmes, THOMAS McCARROLL