Sponsors are eager to get a foothold in Chinese sports. During the Beijing Olympics in 2008 the deals signed brought multimillions in revenue. PHOTO BY TOM CHRISTENSEN.
Corporate sponsorship is an essential aspect of modern sports. At the 2008 Beijing Olympics companies spent millions of dollars to get their names before a worldwide audience. Foreign companies found that they had to weigh the advantages of the publicity that sponsorship brings against potential backlash from activists and politicians who used the Olympic spotlight as a chance to criticize the Chinese government.
China has hosted several big sporting events recently, including the Nanshan Open (a snowboarding event), the Shanghai Showdown (China’s first Gravity Games, an extreme-sports competition), and the 720 China Surf Open. The X Games Asia, which have been hosted by South Korea, Thailand, and Malaysia, were hosted for the first time by China (in Shanghai) in May 2007.
2008, though, marked the first time that China hosted the world’s most prestigious sporting event: the Olympics. Along with the sports competition came the competition (and controversy) of sports sponsorship.
The big sporting events leading up to the Olympics provided China with practice for the main event. Kia Motors, the South Korean automaker, was just one sponsor of the 2007 X Games Asia, which were also sponsored by ESPN, ESPN STAR Sports, and the Chinese Extreme Sports Association. Kia Motors, a secondary sponsor of the X Games Asia since 2005, renewed its sponsorship with a three-year primary sponsorship both to develop the games in China and to gain product exposure. In 2005 alone, according to Kia Motors, exposure from the X Games Asia was worth $12 million.
Given such successes and the enormity of the Chinese market, the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG) had little trouble finding sponsors and partners to finance and coordinate the 2008 games. The Beijing 2008 sponsorship program consisted of three tiers of support: partners (who paid approximately $40 million), sponsors (who paid $20–30 million), and suppliers (who provided services and goods).
The Johnson & Johnson company, one of the Beijing Olympics’ U.S. sponsors, was glad to take advantage of the billions of viewers who, in the words of Brian Perkins, Johnson & Johnson vice president of corporate affairs, looked at Beijing and China “with amazement.” Herbert Heiner, CEO of Adidas, the German sportswear manufacturer, whose sponsorship was reportedly $80–100 million in cash and services, was similarly enthusiastic: “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 provides us with a unique platform to build the Adidas brand image and business in China, as well as the whole of Asia,” Heiner said in an official statement to the BOCOG when Adidas sponsorship was announced in 2005.
The Bank of China (BOC), the most international of China’s commercial banks and the country’s second-largest bank, is another institution that benefited from the first Olympics to be held in China. In July 2004 BOC became the sole banking partner of the Beijing Olympics. As such, BOC was the exclusive provider of both investment and commercial bank services and products. It was also a major player in the BOCOG licensure and ticketing programs.
BOC, in partnership with the Visa credit card company, improved the financial infrastructure necessary for ticketing, automatic teller machines (ATMs), and other point-of-sale services. Multinational partnerships such as this one also provided Chinese companies with a chance to learn from the experience of longtime Olympic sponsors (Visa has been an Olympic sponsor for more than twenty years).
Chinese manufacturers such as Haier, which makes home appliances, mobile phones, televisions, and theater systems, welcomed the increased global brand recognition that sponsoring the Olympics brought. As a sponsor, Haier provided funds, home appliances, and other services to the Beijing 2008 Olympics, the Beijing 2008 Paralympic Games, BOCOG, and the Chinese Olympic Committee. Haier is headquartered in Qingdao, the sister city host of the Olympics, where the sailing events were held.
The chances are good that most viewers of the Olympics did not see the home appliances that Haier provided, but the advantage of Haier’s sponsorship came from the company’s being able to label itself an official sponsor and being able to market globally on that label.
“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 Haier sponsorship was announced in August 2005. “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 were sponsors and partners of the Beijing Olympics included the computer manufacturer Lenovo, China Petroleum & Chemical Corporation (SINOPEC), Air China, and Tsingtao Brewery Company.
Challenges for Foreign Sponsors
With the Olympics being hosted by Beijing, foreign companies found that they had to weigh the advantages of the publicity that sponsorship brings against potential backlash from protestors, activists, and politicians who used the spotlight of the Olympics as a chance to criticize the Chinese government.
The 2008 Olympics were not the first Olympics to meet with opposition—the 1980 Moscow Olympics are another example. Indeed, any country that has hosted the Olympics in the past twenty-four years has had detractors who have protested the host country and called for boycotts of sponsoring companies. Longtime Olympic sponsors such as Eastman Kodak, Coca-Cola, and General Electric, with their worldwide influence, have often been the targets of such protests. The difference is that with so much media, Internet, and global connectivity in 2008, the Beijing Olympics were the first Olympics for which grassroots activism could have as large an impact on the image of the games as could the sports competition itself.
Interest groups such as Reporters Sans Frontières (Reporters without Borders), Play Fair, and OlympicWatch.org were at the forefront of efforts to persuade countries, athletes, and sponsoring companies to boycott or at least withdraw their sponsorship from the Beijing games. These groups were concerned about censorship, unfair working conditions, China’s role in Sudan, and other human rights issues.
Such activism was an additional challenge and distraction for the Beijing Olympics’ international sponsors, which included Eastman Kodak, Adidas, Coca-Cola, General Electric, Johnson & Johnson, McDonalds, and Visa. These companies, despite their deep pockets and global clout, jealously guard their corporate image and the reputations of their brands and thus had to take into account opposition to Beijing’s hosting of the Olympics.
Such companies faced two choices, both of which had negative ramifications: acknowledge the activists and their criticism and risk alienating the Beijing government or ignore the activists and risk alienating the consumers whom those activists might rally to their cause. Public relations firms and organizations such as Future 500, a nonprofit liaison service between corporations and stakeholders, tried to walk the line. Future 500’s China initiative was designed to generate constructive interaction between corporations and nongovernmental organizations and other activist groups. As Future 500 reminded companies in The China Stakeholder Initiative 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.”
Future 500 re
minded companies that they needed to approach the Olympics with a measured amount of support for both the activist causes and their Chinese hosts. One issue that was problematic for the Beijing Olympics was genocide in the Darfur region of Sudan. China’s continuing investment in Sudan and support of Sudan’s government led some protestors to refer to the Beijing Olympics as the “Genocide Olympics.”
When Adidas was confronted by activists about another issue—labor conditions in China—Adidas said it would pressure its suppliers in China, with whom the company had direct influence, but that Adidas would not try to pressure the Chinese government. To most companies that approach—addressing poor labor conditions, human rights abuses, or other issues without directly challenging the Chinese government—was the least damaging and therefore most palatable approach.
Corporate logos and messages were much in evidence during the Beijing Olympics as foreign companies advertised to an audience in the billions, hoping to increase their brand recognition and future profits in China. Likewise, Chinese companies used the platform of the Olympics to introduce their brands to the rest of the world.
Adidas bets on Beijing Olympics. (2006, January 30). International Herald Tribune. Retrieved on February 20, 2009, from http://www.iht.com/articles/2006/01/30/business/adidas.php
Adidas announced official partner of the Beijing 2008 Olympic Games. (2005, January 24). Beijing 2008 website. Retrieved on February 20, 2009, from http://en.beijing2008.cn/34/96/article212029634.shtml
The China stakeholder initiative. (n.d.). Future 500 website. Retrieved February 20, 2009, from http://www.future500.org/china-stakeholder-initiative/
Fowler, G. A., & Lee, W. (2006, August 8). For sponsors, 2008 Olympics have already begun. Wall Street Journal. Retrieved January 25, 2009, from http://online.wsj.com/public/article/SB115497609551828920-8_0kQ0wdMclypje1QdVBBTRL6eM_20060814.html?mod=regionallinks
Haier announced official sponsor of Beijing 2008 Games. (2005, August 12). Beijing 2008 website. Retrieved on February 20, 2009, from http://en.beijing2008.cn/23/96/article212029623.shtml
Source: Eldridge, Scott II. (2009). Sports Sponsorship. In Linsun Cheng, et al. (Eds.), Berkshire Encyclopedia of China, pp. 2083–2086. Great Barrington, MA: Berkshire Publishing.
Sports Sponsorship (T?yù zànzhù ????)|T?yù zànzhù ???? (Sports Sponsorship)