The Real Battle for Olympic™ Gold

Athletes seek their own piece of the action amid corporate takeover of the games

Nick Symmonds is flashing his deltoid like a well-aimed middle finger at the Olympics sponsorship system this year. The media-savvy American middle-distance runner, who easily qualified to compete in the upcoming London games with a blistering 800 meters, spent recent months challenging highly controlled branding rules that he and many competitors believe reward everyone but the actual athletes.

Symmonds’ up-yours to the system began earlier this year, when he auctioned off a patch of his skin on eBay, sparking a bidding war among 85 brands wanting to advertise on his body. Milwaukee outdoor lifestyle agency Hanson Dodge Creative snagged the space for $11,100. It’s a branding coup made all the more valuable by headlines trailing the handsome 28-year-old track star ever since he convinced Paris Hilton to go on a date with him.

The tattoo is temporary, but the reasons behind Symmonds’ one-man campaign to fund himself and tweak the powers that be are lasting. The Olympics will generate $6 billion to $7 billion, possibly more, in sponsorship and advertising revenue. Yet many of the more than 10,000 athletes competing this summer struggle to get by financially.

At the upcoming Summer Games, Symmonds will continue to wear a tattoo with the agency’s Twitter handle stenciled on his left arm. Though the rules require him to cover the words @HansonDodge during meets, the swatch of white sports tape whizzing by on his muscle will be visible as a gesture of defiance to the Olympic world. “I was appalled at what was going on. Most of the financial gains of the sport are not passed along to the athletes,” says Symmonds, who also competed in the 2008 games. “So many Olympians are living below the poverty line.”

To pursue an Olympic dream, the cost of training, housing, coaching and travel reaches the low six figures, according to estimates. Yet few athletes come close to earning that. In U.S. track and field, for example, 50 percent of the top 10 competitors in each event make less than $15,000 a year in sponsorship, grants or prize money, according to a recent study by the Track and Field Athletes Association. To make up the shortfall, synchronized swimmers in California work shifts at a Santa Clara bingo hall. In New Zealand, tae kwon do athlete Logan Campbell opened an escort agency, which is legal in that country. And one of America’s top steeplechase competitors, Ben Bruce (who has bunked at Symmonds’ place in Eugene, Ore.), was forced to go on food stamps after failing to convince Nike to increase his meager stipend. What’s more, for many of these athletes, health insurance is a luxury.

“I got tons of gear, but you can’t take a Nike shirt to the grocery store and buy food with it,” says Bruce, who got a better deal after moving to Adidas.

Now more athletes are speaking out, especially on Symmonds’ Facebook page, railing against the dominance of big business and what he calls “crippled and antiquated” rules limiting advertising that can be worn or shown during competition, which limits an individual’s earnings. Ultimately, he’s speaking for many competitors when he asks the fundamental question: Who is allowed to make money off the Olympics?

The corporate money in play from sponsors and advertisers has reached stratospheric levels this year, according to Olympics marketing expert Rob Prazmark, founder and CEO of 21 Sports in Greenwich, Conn., and a founder of The Olympic Partner (TOP) program. Prazmark tallies up spending related to this year’s games: $1 billion dollars raised by the London Organizing Committee; more than $1 billion from the International Olympic Committee’s TOP sponsors; more than $200 million in U.S. Olympic Committee sponsors and another $800 million to $1 billion from other countries’ National Olympic Organizations; $1.18 billion paid by NBC for U.S. media rights; close to $1 billion sold by NBC in advertising; another $1 billion in rights fees worldwide; and more than $1 billion spent by sponsors in hospitality, promotion and athlete endorsement fees.

In this complex cash-for-rights hierarchy, the National Olympic Committees secure their own sponsors, which in the U.S. includes 22 companies that don’t always align with those appearing in London. Nike, for example, is providing Team USA’s uniforms, while Adidas is the official shoe and apparel company of the London Olympics.

Though the field is cluttered, costly and confusing, the Olympics offer a unique platform for global and regional exposure that taps deep emotional and patriotic connections. “The Olympics are a game changer—one of the few game changers,” as Prazmark points out.

In two of the best known Olympics-fueled brand revamps, both Visa and Samsung have springboarded off TOP level sponsorships since the mid 1980s to become market leaders, according to University of Oregon business school marketing professor John A. Davis, author of The Olympic Games Effect: How Sports Marketing Builds Strong Brands. In 1986, for example, Visa led MasterCard by only a few points in market share but has today leaped far ahead. And Samsung bypassed Sony in brand value in 2005. “These companies both see the Olympics as a key factor to their growth,” says Davis.

With those lessons in mind, Citigroup is debuting as a U.S. Olympic and Paralympic sponsor this year, in addition to its Every Step of the Way social media campaign in which fans vote on how to distribute $500,000 to 11 somewhat lesser-known athletes and their charities. So far, Facebook users have voted 530,407 points for women’s soccer captain Christie Rampone and 533,436 for swimmer Cullen Jones, directing $5,304 and $5,334 respectively to their causes. Though the program pits Olympic hopefuls against each other vying for dollars, athletes have praised it for actually directing money back to them and their sports.

Allying with consumer feelings for flag and country is an invaluable opportunity for an image-challenged brand like Citi. Since the 2008 banking collapse, the company has been widely reviled for reckless mortgage-backed security losses leading to a $45 billion government bailout. While Citi’s early 21st century slogan was “Live Richly”—and the bank did—the Olympics promising to support athletes with ThankYou Points offers a chance to reframe from government freeloader to patriotic inspiration. As Citi’s chief brand officer Dermot Boden describes it, “Partnering with an asset as powerful as the Olympics helps to impact the popular perception of the brand in a positive way.”

To protect the value of these powerful consumer connections, corporate sponsors and government agencies have been increasingly vigilant. Since 2000, the International Olympic Committee has required host countries to pass bespoke laws to protect trademarks. The British Parliament’s special infringement law, which was voted through in 2006, is widely considered the most punitive ever, making violations a criminal offense with stiff fines.

A 61-page “Brand Protection” manifesto outlines the restrictions in London: the phrase “Olympic Games” and the iconic logo featuring the five rings are protected. So is the pairing of particular words, including “medals” and “twenty-twelve” and “bronze” and “games.” In London, there will be a strict 35-day “brand exclusion zone” enforced around all Olympic venues. Pity the hapless fan who wanders into the Olympic circle with an American Express or MasterCard. Forget priceless—their cards will be useless. Only TOP sponsor Visa will be accepted, having paid a reported $100 to $125 million for the privilege. And London organizers are hunting out violators. Former British Olympian Sally Gunnell was banned from unfurling the Union Jack in an advertising photo shoot for easyJet because competitor British Airways paid a reported $40 million for sponsorship rights.

Current and former athletes can get caught in the corporate crossfire. The USOC charter’s infamous Rule 40, for example, bars participants from directly using their status as Olympians for advertising during the games. And in London, competitors will face restrictions on their tweets and Facebook posts, though exactly how they will be policed during the first truly social media Olympics remains to be seen.

Such measures to protect exclusivity are perfectly justified, says Prazmark, because “parasitic marketing” detracts from the multimillion-dollar value sponsorships. Still, despite the fierce, punitive rules, many determined companies intend to vault over the barriers, with ambush tactics ranging from the local pub owner marketing with an innocent Union Jack to more sophisticated strategies.

For years, Puma has been one of the most notable players jumping into the Olympic ring without invitation. At the Atlanta Games in 1996, sprinter Linford Christie wore contact lenses emblazoned with Puma’s logo, though Reebok was the official shoe sponsor. The stealth approach worked: The company’s leaping-feline icon staring out from Christie’s eyeballs made front-page news.

Puma is at it again this year, sponsoring high-profile athletes including Jamaican sprinter and three-time gold medalist Usain Bolt, who is signed to what is reportedly the highest track sponsorship in history at close to $32 million for four years. In June, the Germany-based sports company unveiled its plans for Puma Yard on Brick Lane in East London, a gathering spot that will operate from July 27 to Aug. 12, in conjunction with the games. But Puma’s press release studiously avoids protected brand words like Olympics, noting that big screens will be available for morning and evening viewing sessions, without noting what exactly those sessions might be. The press release ends with a double entendre: “Let the Games Begin.” The London Organizing Committee immediately launched an investigation.

Outsider companies that elbow in without paying infuriate the Olympic movement. But even official sponsors have been known to employ some questionable tactics. This spring, a group of 20 Olympic athletes, including former greats Mark Spitz, Dara Torres and Jackie Joyner-Kersee, sued TOP sponsor Samsung for using their names and images without permission in the company’s much-publicized Genome Project. The Facebook app allows fans to see how they’re connected to famous Olympians past and present. But they say the company never asked for the rights to use their images and names.

“I would have thought someone in the room, at some point, would have said, ‘I think we need to get written consent from the athletes,’” says attorney Rich Foster, who filed the lawsuit asking for undisclosed damages on behalf of the sports heroes. “I think some companies are just getting careless.”

The lawsuit likely won’t settle until after the Summer Games, Foster predicts, since current athletes must now focus on training. Samsung declined to comment, citing pending litigation. But clearly, it’s an unflattering picture for an elite Olympic sponsor to be sued by the very athletes who are the movement’s lifeblood, especially since so many of them are shut out of the financial frenzy.

“For the majority of Olympic athletes, it’s very difficult to get sponsorships and make a living,” says Foster. “They need to protect their rights.”

Part of that sense of entitlement stems from the corporate enterprise that the Olympics have become. Without sponsorship, the Olympics would probably have ceased to exist in the early 1980s when the games went into a tailspin. Montreal went bankrupt after the 1976 games and Moscow was a disaster in 1980 due to the American boycott. But in 1984, Peter Ueberroth, president of the Los Angeles Organizing Committee, relied on private financing, primarily corporate sponsorship and television rights, to turn a profit. The games never looked back.

“The Olympics were in serious financial trouble and under Ueberroth, the change was made on how to approach corporate sponsorship differently,” says Allen Brooks, a marketing consultant and co-founder of Running Waters Group, who has worked both on the organizing and sponsor side of the games. “The Olympics as a brand, a logo, a movement are one of the most recognized symbols globally. There’s a strong desire to be involved in a movement like that.”

With the lull in big summer sports events, the Olympics become that much more attractive to advertisers, according to Tom McGovern, managing director of Omnicom’s Optimum Sports. “When summer begins, households just watch less TV. This is one of those TV events that galvanizes the whole family to watch,” he says, noting that media buyers will be tracking how NBC’s hundreds of hours of digital streaming affect prime-time broadcast ratings.

Measuring the return on sponsor and advertiser investment can be tricky. This summer, social media will allow more tracking than ever before says, Joe Favorito, who teaches advanced sports marketing and communications at Columbia University. “That’s why a lot of top sponsors enlisted more athletes in more diverse sports. They are covering the athletes no one’s picked off yet.”

Despite broader sponsor interest, even successful Olympians can struggle. Marathoner Meb Keflezighi won a silver medal in Athens, becoming the first U.S. man to medal in the marathon since Frank Shorter won a silver in 1976. Yet Nike dropped him in 2010.

“They thought he was over the hill,” says his brother and agent Merhawi Keflezighi. “It could have ended his career. But luckily, Meb had enough of a profile that we had interest from other companies.”

The 37-year-old marathoner signed a unique type of deal with Skechers that allowed him to wear other corporate logos while skipping penalties for bad performance. (When competing in London, Keflezighi must don his U.S. team uniform designed by Nike, wearing the logo of the company that dumped him two years ago. However, he can wear his Skechers shoes, which are considered equipment.) Nike did not respond to requests for comment.

Yet most contenders don’t have the leverage of an Olympic marathon medalist. Steeplechaser Bruce has been scraping by, but not everyone is willing to live that way. “Every single year, I see athletes leaving the sport because they can’t make it,” says Bruce, who failed in his Olympic trials bid. And then there are savvy game-players like Nick Symmonds, who ran like something out of Chariots of Fire at the trials and has turned his rage against the machine into a promotion powerhouse—even while enjoying a Nike contract.

Though the @HansonDodge tattoo is covered during meets, he talks up the feisty Milwaukee firm in interviews, landing the sponsor’s name in media ranging from Fox and NBC to Sports Illustrated—all before the Olympics even begin.

With all that attention, the company’s Facebook likes, Twitter followers and hits on its website have skyrocketed, adding up to a marketing value that Sara Meaney, president of strategy and growth, pegged at $500,000 to $1 million. “This is already shaping up as a game changer for us,” she says. “Did we skirt the limitations? Yes—that’s part of our job. This opportunity is unprecedented for us, and unprecedented for Nick.”

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