Turning Around the Rings

Whatever happens at Athens, and I am confident it will be a great Olympic Games, the last 20 years have seen a remarkable turnaround in the Olympic movement.

Today, the future of the Olympic Games has never seemed so secure. This year’s Games in Athens will be broadcast to over 220 countries, with a global audience of close to 4 billion people – making it the largest media event in the world. Already the 2008 Games in Beijing is anticipated as one of the seismic political events of the new century; China’s symbolic and dramatic entrance onto the world’s stage. No fewer than nine of the most famous cities in the world  announced their desire to host the 2012 Games, eventually shortlisted to 5 – London, Paris, Madrid, Moscow and New York.  

But in the early 1980s, it was a very different story. Back then cities had to be cajoled into hosting the Games.  Shortly before the Moscow Olympics in 1980 the Olympic Movement was staring into the financial abyss. The International Olympic Committee (IOC) was on the verge of collapse. Written off by most commentators, it had less than $200,000 in cash and only $2 million in assets.

How was this transformation – one of the most remarkable turnarounds of all time -- achieved and what lessons does it have for other organisations? I was fortunate enough to witness much of it first hand.

It began, quite clearly, with the appointment of a relatively unknown Spanish diplomat, Juan Antonio Samaranch, to the IOC Presidency in 1980.  Samaranch laid the foundations for the turnaround in three ways.  First, he made it clear that the IOC needed to stand on its own two feet financially.  The bottom line was the starting line.  Given the IOC’s parlous financial state there could be little debate about the need for it to become self-sufficient. Without a basic business proposition, it was going nowhere fast.

This financial imperative led to the creation of what became the most successful global marketing programme in the world. The programme operated under the secret code name, ‘TOP’ – which stood for nothing originally but eventually became ‘The Olympic Partners’.  The idea of the TOP Programme was blissfully simple: to bundle all the rights together – the IOC, the Winter Olympic Games, the Summer Olympic Games and over 150 National Olympic Committees -- into a single four-year exclusive marketing package, offering companies one stop shopping for their global Olympic involvement.  The programme now attracts the support of many of the world’s leading blue chip organisations including Coca-Cola, Kodak, McDonald’s, Visa, Swatch and Samsung.  Single sponsors pay up to $70 million – more than the total amount generated at the Lake Placid Winter Olympics with 200 sponsoring corporations.

The second element of Samaranch’s turnaround strategy was to take control of the agenda.  When he took over, the Olympic Movement was a political football in the Cold War. It was powerless in the face of politically motivated boycotts.  Samaranch set out to change this by creating a dialogue with influential people. His idea was to avoid problems by anticipating and engaging with issues early rather than attempting desperately to solve them at the last minute.  He invested time and energy in developing relationships with the world’s political rulers. The Olympics became a force to be reckoned with.

The third element in Samaranch’s recovery strategy was unitywithin the Olympic world – especially the NOCs and the International Federations. The entire Olympic Movement faced a crisis, he explained, and it was only by working together that we could get out of it.

These three elements were the starting points.  Others emerged as things were slowly turned around.  Samaranch’s leadership -- long-term and strategic -- was fundamental. He offered a clear vision. He wanted to modernise the Olympics while remaining true to its ideals; to commercialise without compromising.  People tend to forget that he refused to sell European TV rights to Rupert Murdoch because reaching a larger audience through terrestrial channels was integral to the Olympic spirit. In doing so, the IOC accepted an offer which was $600 million less than that of News Corporation.

This underlines an integral part of the strategy. As a spectacle the Games are for everyone, not just a privileged few. Access and inclusiveness are vital to its stature as the world’s pre-eminent sporting event.
 
And Samaranch was patient. The Olympic movement works to long-term plans.  It is not driven by quarterly results. At the same time, clarifying what constitutes success for the Olympics is an important element in its resurrection.  The key measures of the Olympics’ success are whether the Games is still the ultimate prize for athletes; whether it is true to its values, philosophy and brand; and the size of the broadcast audience. 

Greater clarity about what matters for the Olympics has been matched by greater assertiveness about what the commercial success of the Games depends on.  Defending its rights, its image and what it stands for is central to the Olympic turnaround.  Exclusivity is key. Sponsors need to know that they can invest in the Olympic Movement and be certain that they are not going to be undermined by a last minute surprise promotional campaign by their competitor.

If the IOC had sat back, and taken the easy option, turning a blind eye to the occasional borderline promotion or partner presence marketing indiscretion, the marketplace would have rapidly been cluttered and sponsorship fees would have stagnated at 1980 levels.

The Olympic Games allows no stadium advertising. The Olympic brand – the five rings logo that is the most widely recognized image in the world -- is always the star. Official sponsors follow strict rules.
Ambush marketing is stamped on – hard. In Sydney, four days before the Opening Ceremony, we discovered that the catering services company, Aramark, had provided 30,000 uniforms to all the food service personnel with its logo prominently displayed on the left side of the chest. This was a technical breach of TOP sponsor McDonald’s exclusive rights. A team of seamstresses was quickly brought in to sew new patches on.

Such single mindedness has paid dividends in building and sustaining Olympic value.

In Lillehammer, 60 Norwegian spectators turned up to the cross-country events, with the name of an insurance company emblazoned across their clothes. This was not accidental. It was a clearly orchestrated attempt to gain free publicity, with the insurance company probably paying for the cost of the spectator tickets. The spectators were told that in order to enter the venues they had to cover up the advertising or take off their clothes. As it was minus 20° Celsius at the time, they were quickly able to find new jackets to cover up the offending advertising.

In Atlanta, one athlete’s underhanded advertising message came close to costing her country its first ever gold medal. Claudia Poll, from Costa Rica won the women’s 200 metre freestyle event. The flag of Costa Rica looks remarkably like the logo of Pepsi Cola – a red, white and blue wave. Everyone thought that Poll was swimming with a head cap proudly bearing the national flag. But close examination of press photographs revealed that the cap was an advertisement for Pepsi.

Costa Rica was in uproar claiming that Coca-Cola had brought the matter to the IOC’s attention, and that because of Coke, Costa Rica would now lose its gold medal. Coke knew nothing about the issue, until the IOC began investigating, and was torn between, on the one hand, wanting the IOC to come down hard on such a blatant case of ambush marketing, and on the other not taking the rap in Costa Rica and seeing its market share collapse through an incident that it had nothing to do with.

In the end, after a formal apology from the Costa Rican Olympic Committee, it was decided, that in view of the fact that this was the country’s first ever medal, the IOC would not press for the ultimate sanction. Ms. Poll was not allowed to compete again wearing similar headgear. Anyone who is foolish enough to overstep the mark in Athens should be under no illusions. Sorry doesn’t do it. On such things is a great brand built.

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