The Beijing Olympics
With a year to go, the Beijing Olympic Games has polarised opinion to an extent not seen since Moscow 1980. The vast marketing platform offered by staging the Games in the world’s most populous country is being weighed against continuing human rights abuses on the part of the Chinese government and their record on environmental issues.
From a commercial perspective the appeal of a Beijing Games is obvious: The Olympics are an unprecedented showcase for sponsor brands in front of a population of 1.3billion people.
Sir Martin Sorrell told Marketing: “Advertisers want the live audiences that the Olympics delivers” and pointed out that ‘the biggest live audience ever was a billion people for the Chinese New Year on CCTV (China’s state run television company)”
Sponsorship income now accounts for 40 percent of the total revenue for the IOC. The top tier, The Olympic Partners (TOP), consist of 11 major brands including McDonald’s, Samsung and Coca-Cola.
The pull of Beijing allows sponsors to ‘take a position in China’, says Alun James of Four Communications. “It is a big tick in the box”.
Sponsor revenue from the current four year cycle, from 2005 to 2008 and which takes in the Turin and Beijing games, is worth $866 million (up from $663 million for Salt Lake and Athens Games). Coca-Cola has recently renewed its contract until the 2020 Olympics. A contract which is understood to be worth around $60m (£33.7m) for each four-year games cycle.
Europe’s free to air broadcasters, including the BBC, have agreed to pay $578million for the rights to show the Turin Games and the 2008 event in Beijing (in a deal brokered by the European Broadcast Union). The same group is to pay $750million for the 2010 and 2012 Games, in Vancouver and London respectively. In addition to these sums, the broadcasters commit up to $150million worth of airtime given over to promotion of the Olympics through extra programming in the run up to the Games.
“Association with the Olympics is stronger than it has ever been in terms of the levels of interest in the Games. The business world wants to learn more about China, to build a position in a country with growing consumer choice,” says Michael Payne, former head of marketing and broadcast at the IOC and the architect of the TOP Programme. “The Olympics is a great way of achieving product differentiation”.
In 2001, when the IOC awarded the Games to Beijing, Payne says that the world’s business leadership were united in support. “They said ‘you must take the Olympics to China’. They saw it as a way of speeding up the process of opening up the country.”
The desire to transform the image of China has led to the cost of the Games to escalate. The bill is currently $38billion according to the Chinese Academy of Social Sciences, with infrastructural improvements in the city doubling that figure. The building programme has left many environmentalists to question the long term legacy of the Games, as the city sprawls across rural areas.
However, the slow pace of change within China is troubling human rights groups such as Amnesty International, who question whether the country’s Maoist hardline rulers are keeping their promises on reform.
According to Amnesty International, there is concern that rather than the Olympics being a force for liberalisation, it is being used as a reason to ‘clean up Beijing’ before the global spotlight turns toward the city next year.
"Not only are we not seeing delivery on the promises made that the Olympics would help improve the human rights situation in China, but the police are using the pretext of the Olympics to extend the use of detention without trial,” said AI Secretary General Irene Khan.
Beijing-based activists face 'house arrest' and tight police surveillance, the media is being muffled, journalists and writers imprisoned and the internet censored. More broadly, China executes more of its own people than any other country in the world, an estimated 8,000 people died at the hands of the state in 2006.
They point out that these ongoing human rights violations are at odds with the principles of Olympism, including "the preservation of human dignity" and "respect for universal fundamental ethical principles," laid down in the Olympic Charter.
Michael Payne says that the alternative course of action is also unpalatable: “It is an imperfect solution but we must continue the dialogue. What is the alternative? Not to engage with China, to cut it off from the rest of the world? Is that the best way of moving forward?”
Payne believes it is a mistake to think the Olympics will change ‘everything within the country by the time the opening ceremony comes around’, a point echoing a statement by IOC President Jacques Rogge as part of the year to go celebrations.
“With Beijing, one of the great challenges will be to manage expectations that the Olympic Games can influence China's evolution to the extent many observers desire," said Rogge.
It is testimony to the appeal of the Olympic Games that it carries with it the hopes of so many differing constituencies. “It (the Olympic Games) has always been a magnet for every cause which wants to demand its day in court” says Michael Payne.
For sponsors, the year ahead will be a test of resolve in the face of growing media attention, proving once again that the Olympics is about much more than sport.
BOX – IOC TOP OLYMPIC SPONSORS BY CATEGORY (CONTRACT EXPIRY DATE)
Atos Origin IT 2012
Coca-Cola Non-alcoholic beverages 2020
General Electric Energy 2012
Kodak Film/photographic images 2008
Lenovo IT equipment 2008
Manulife Life insurance 2008
McDonald's Retail food services 2012
Omega Timing/scoring 2008
Panasonic Audio/TV/video 2008
Samsung Wireless communications 2008
Visa Consumer payment systems 2012
Total revenue 2001-04 £345m
Projected total revenue 2005-08 £495m