Olympic Sponsorship Generates $1 Billion in Sales for GE

(ATR) GE credits $1 billion in sales – and counting – to its sponsorship of the past four Olympic Games.

Christopher Katsuleres, GE’s director of Olympic marketing and sport programs, made the comment to Around the Ringsduring a wide-ranging interview in London.

"All totalled with the four Games, we’re over a billion dollars in sales tied to the Games," he said.

"We’ve been pleased with that."

GE became a TOP sponsor of the IOC in 2006 and renewed last year through 2020.

Katsuleres said there is indeed a "general target" for revenue generated from London 2012, but GE is more concerned with the "aggregate" revenue generated from the Games, he said.

"I think the billion dollars plus in sales that we’ve had, I think it’s been something we were very pleased with, hence the renewal. Obviously, if we didn’t feel that there was a sufficient payback, we wouldn’t have re-upped for the next eight years."

While the Games have been a positive for GE, Katsuleres would not say if GE would expand its Olympic portfolio to include the financial services category.

"Our focus is in the areas that we have now within our categories," he said. "We do have a financial services business with GE Capital, but I think our area of focus is what we’re doing today, hence the reason we’ve continued on the partnership in the categories that we have."

According to Katsuleres,GE has two main goals from its Olympic sponsorship: generating revenue – which is "very much focused on the market here [in the U.K.]" – as well as improving and enhancing GE’s global brand.

One way GE hopes to make the best use of global activation, Katsuleres said, is from the re-lighting of Tower Bridge. The iconic bridge was reinstalled with new energy-efficient LED light bulbs from GE, designed to use an estimated 40% less energy.

"Every broadcaster is using that as a backdrop at least from a remote or from their studio setting. We’ve been able to be in these markets and talk about ‘hey, we made a contribution to this lighting that you see on TV’ and it’s helping us in that way."

GE has easily the IOC's most diverse sponsorship portfolio, occupying technology items from small (light bulbs) to large (locomotion and aircraft engines).

Katsuleres said GE can still secure returns on investments with their products that aren’t associated with the Games.

"We’re never going to have a direct technology contribution for rail in the sense that they’re going to be using our products for the delivery of the Games," he said.

"We’ve been able to work with some of our customers to brand the locomotives with the Olympic Rings, same thing with our aviation business. There’s points of value that those types of businesses are able to recognize. The other extreme would be like our lighting business. They were very quick to understand: OK, this is a great promotional platform for us, I can run retail promotions with our retail partners to drive purchase of GE CFL light bulbs. They were easily getting their arms around what the opportunity was. It’s certainly more of a different conversation when you go talk to our head of our rail business and say, ‘OK, well, what does this mean for my business?’."

Katsuleres also noted the role of the Games as a unifying force for GE.

"We’ve got a lot of disparate businesses, and in certain cases we haven’t always worked together as a unified GE to approach that opportunity. The Olympics has always been structured that way: we bring together a team and work across the businesses to really have one face to the company as opposed to having to deal with five or six different, separate ogranizations. We’ve been able to take that lesson learned, if you will, and apply that to other major products that have nothing to do with the Olympics.

"The approach to how we’ve handled the Olympics from a commercial engagement standpoint is translatable to any other major project.

GE, he told ATR, is already well on track for the upcoming Games.

"We’ve got a team in place in Sochi, we’re going to meet the PyeongChang team here in London for the first time, we’re ready to start and have been engaged with Russia and Brazil for two years."

In Sochi, GE has already installed two gas turbines as part of its activation, and in Rio, GE is in talks with the mayor’s office "to assess the needs, propose solutions, and ultimately get started with projects," Katsuleres said.

Written by Ed Hula III.

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