Corporate sponsorship is an essential aspect of the modern Olympic Games. At the Beijing Olympics, as at earlier Olympics, companies are willing to shell out tens of millions of dollars to get their names before a worldwide audience.
Although there have been sponsors as long as there have been modern Olympic Games (Eastman Kodak was a sponsor of the first of the modern Olympic Games in 1896), it has only been in the last 24 years that companies have been able to pay for the privilege of calling themselves the “official (retailer, outfitter, beverage, car, camera) of the Olympics.” Coincidentally, 2008 will also be the 24th year since China returned to the games after more than 30 years away. More importantly, it will be the first time that China has hosted the games, another milestone in the seemingly endless list of firsts for China as its global influence grows.
China as an International Host of Sporting Events
China has hosted several large-scale sporting events recently, including the Shanghai Showdown ( China’s first Gravity Games, an extreme-sports competition), the Nanshan Open (a snowboarding event), and the 720 China Surf Open. The Asian X Games, which have previously been held in Thailand, Malaysia, and South Korea, were held for the first time in the People’s Republic of China earlier this year. Shanghai hosted the event, which attracted some 200 of the world’s top extreme-sports fans.
The Korean automaker Kia Motors is just one of the sponsors of the X Games, which are also backed by ESPN, ESPN STAR Sports, and the Chinese Extreme Sports Association. Kia Motors, a secondary sponsor of the Asian X Games since 2005, has renewed its support with a three-year primary sponsorship both to build the event in China and to gain product exposure. According to Kia Motors, in 2005 alone, exposure from the Asian X Games was worth approximately US$12 million.
With these successes under its belt, and given the enormity of the Chinese market, the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG) has had little trouble lining up sponsors and partners to help finance and coordinate the games. The Beijing 2008 sponsorship program consists of three tiers of support: partners (who pay approximately $40 million), sponsors (who pay approximately $20–30 million), and suppliers (who offer goods and services).
Johnson & Johnson, one of the Beijing Olympics’ U.S. sponsors, is eager to take advantage of the billions of viewers who, in the words Brian Perkins, the company’s vice president of corporate affairs, will be “looking at Beijing and China with amazement.” Herbert Heier, CEO of the German sportswear manufacturer Adidas, whose sponsorship is reportedly between $80 and $100 million in cash and services, sounded a similar note: “The Beijing 2008 Olympic Games will once again be a worldwide visible proof of our dedication to athletes, products, innovation and leadership. At the same time, the Beijing 2008 Olympic Games provide us with a unique platform to build the Adidas brand image and business in China, as well as the whole of Asia,” he said in 2005, when the sponsorship was announced.
Chinese Sponsors of the Olympics
The Bank of China (BOC), the most internationalized of China’s commercial banks and the second-largest bank in China, is another institution that will benefit from the first Olympics being held in China. In July 2004, it became the sole banking partner of Beijing Olympics. As such, it is the exclusive provider of both commercial and investment bank services and products. It is also a large player in the BOCOG licensure and ticketing programs.
BOC has partnered with Visa, the premier credit card company, to improve and upgrade the financial infrastructure necessary for ticketing, automatic teller machines (ATMs), and other point-of-sale services. Multinational partnerships such as this also provide Chinese companies with an opportunity to learn and benefit from the experience of longtime Olympic sponsors (Visa has been a global Olympic sponsor for more than 20 years.)
Chinese manufacturers such as Haier, which produces home appliances, televisions, mobile phones, and theater systems, are eager for the increased global brand recognition that sponsoring the games will bring. As a sponsor, Haier will provide funds, home appliances, and other services to the Beijing 2008 Olympic Games, the Beijing 2008 Paralympic Games, BOCOG, and the Chinese Olympic Committee. Haier is based in Qingdao, the sister city host of the Olympics, where sailing events will be held.
Chances are good that most viewers of the Olympics won’t see the home appliances Haier is providing, but the advantage of sponsorship comes from the company’s being able to label itself an official sponsor and being able to market globally on that merit. “Haier becoming an official sponsor of the Beijing 2008 Olympic Games will greatly boost the preparations for the Beijing 2008 Olympic Games, especially the Olympic sailing events,” BOCOG executive vice-president and secretary-general Wang Wei said when the sponsorship was announced. “Sponsoring the world’s greatest sporting event also provides Haier with an unparalleled platform to build up its prestige on a global basis.”
Other Chinese companies that are sponsors and partners of the Beijing Games include the computer manufacturer Lenovo, the SINOPEC energy company, Air China, Tsingtao Brewery Company, and more. These companies are all hoping that the 2008 Olympic Games will help catapult them into foreign markets.
Challenges for Foreign Sponsors and Partners
With the games in Beijing, foreign companies are finding that they must also weigh the advantages of the publicity and attention that sponsorship brings against potential backlash from protestors, activists, and politicians who are using the games as an opportunity to sound off against the Chinese government.
It should be pointed out these are not the first games to meet opposition—the Moscow Games of 1980 are another noteworthy example, and indeed, any country that has hosted the Olympics in the past 24 years has had its detractors, ready to protest the host country and ready to call for boycotts of the sponsor companies. Longtime Olympic sponsors such as Coca-Cola, Eastman Kodak, and General Electric, with their widespread influence, have often been the targets of such activism. The difference today is that with so much media, Internet, and global connectivity, the Beijing Olympics may be the first games for which grassroots activism could have as large an impact on the image of the games as the athletic competition itself.
Groups such as Reporters Sans Frontières (Reporters Without Borders), OlympicWatch.org, and Play Fair have been at the forefront of efforts to get countries, athletes, and sponsoring companies to boycott or at least pull their sponsorship from the Beijing Games. These groups are concerned about censorship and media control, unfair working conditions, China’s role in Sudan, and other human rights issues.
This activism is an additional challenge, and distraction, for the Beijing Olympics’ international sponsors, which include Adidas, Coca-Cola, General Electric, Johnson & Johnson, Eastman Kodak, McDonalds, Visa, and more. Despite their deep pockets and global clout, these companies care about their corporate image and the reputations of their brands and must take into account opposition to Beijing’s hosting of the Olympics.
Companies have two choices, both with damaging ramifications: acknowledge the activists and their criticisms and risk alienating the Beijing government, or ignore the activists and risk alienating the consumers those activists may rally to their cause. Public relations firms and organizations such as the group Future 500, a nonprofit liaison service between corporations and stakeholders, are trying to tread the narrow middle ground. Future 500’s China initiative is designed to foster constructive interaction between corporations and nongovernmental organizations and other activist groups. As Future 500 reminds companies on its website, “For industries that operate on the global stage, anything said by anyone anywhere—true or not—can impact your brands everywhere… That [fact] will be increasingly important between now and August 2008 when three billion people tune in to television and the Internet to watch the Olympic Games in Beijing. There, center stage will be not only the athletes, but corporations as well.”
According to Future 500, companies need to approach the games with a measured amount of support for both the activist causes and their Chinese hosts. One issue that has been problematic for the Beijing Games has been the genocide in the Darfur region of Sudan. China’s continued investment in Sudan and support of the Sudanese government have led some to refer to the Beijing Olympics as the “Genocide Olympics.” When confronted by activists about another issue of concern—labor conditions in China —Adidas said that the company would pressure its suppliers in China, with whom the company has direct influence, but that it would not attempt to pressure the Chinese government. That approach—working to address poor labor conditions, human rights abuses, or other problems without directly confronting the Chinese government—may be the least damaging and therefore most palatable to most companies.
The Countdown Continues
In one year, the Olympic torch will reach Beijing, and the games will open to the world. Between events, on medal stands, and throughout the venues will be corporate logos and messages. As they contemplate an audience in the billions, foreign companies hope to increase their brand recognition and future profits in China, while Chinese companies look forward to using the Olympic platform to introduce their brands to the rest of the world.
Source: Eldridge II, Scott. (2007). Sponsorship of the Beijing Olympics. Guanxi: The China Letter, 15, 8.
