Sponsor Spotlight: Sochi Secures Giant Telecoms Sponsorship

 (ATR) The head of the Sochi Olympics tells Around the Rings the record-setting deal for telecommunications at the Sochi Olympics “reaffirms that we are moving in the right way”.

CEO Dmitry Chernyshenko says the $250 million sponsorship announced this weekend “shows that we did not underestimate the market, especially with these difficult economic times.”

It’s the first of about a half-dozen top-tier sponsorships Sochi hopes to sign in the next year or so, raising $800 million.

Land-line telephone company Rostelecom and mobile service provider MegaFon will join forces for the sponsorship. About half of the $250 million is to go to value-in-kind, the rest in cash.

According to a news release, the two companies may spend up to $500 million by the time of the Olympics to develop their infrastructure in this fast-growing corner of Russia. The size of the deal with the telecoms is due to the amount of work needed in the Sochi area, starting almost from scratch in the locations where Olympic venues will be located.

“This sponsorship was not about impressing a politician,” says Chernyshenko. “This is about their business in 20 years.”

Rostelecom is the biggest provider of land-based telecommunications in Russia. MegaFon is number-three in the mobile business.

Future domestic sponsorships in banking, gas and oil and airlines may be more in the range of $130 million, Chernyshenko tells Around the Rings.

The telecoms deal was put on a fast track in January with the close of tenders. Five firms made the deadline and intense negotiations resulted in the Rostelecom/MegaFon combination. Chernyshenko notes that the process used to select the successful firms was open and transparent.

Meydan to Sponsor FEI Nation’s Cup Series

The Meydan Group will become the 2009 title sponsor of jumping’s premier team competition.

The historic Nations Cup Series is considered the “jewel in the crown” for FEI. It will be known as Meydan FEI Nations Cup Series. The event features the world’s ten best national jumping teams competing at eight of Europe’s best venues.

The final will be at the world famous Dublin Horse Show in August this year.

No dollar amount for the sponsorship was announced.

McDonald’s Reports Strong Growth

The economic downturn seems to have little negative impact so far on McDonald’s: on Wednesday, the hamburger chain reported strong earnings for 2008.

The TOP sponsor says its breakfast, chicken, value and beverage items are responsible for gains that include a jump of 80 percent in net profit for the year, or some $4.3 billion.

“While we clearly prefer a more robust environment, today’s market conditions play to our strengths; in fact, our global comparable sales continue to be strong in January,” McDonald’s CEO Jim Skinner said.

U.S. Figure Skating President Optimistic About Sport’s Continuing Financial Viability

U.S. Figure Skating president Ron Herschberger used his annual address to say he is confident his sport will continue to do well despite the recession.

With a number of big-name sponsors on board and steady membership numbers, Herschberger says he believes figure skating can maintain strong bases at both the grass roots and the elite levels.

“We know that economic times aren’t so good,” Herschberger said. “How does that affect us? So far, it hasn’t really affected us adversely.”

The organization has major sponsorship contracts with AT&T, jelly-maker Smuckers, and insurance giant State Farm.

Herschberger says the popularity of icenetwork.com, which offers live and on-demand coverage of competitions, is a selling point for sponsors as well as an important source of revenue.

World Cup in Good Financial Shape According to FIFA

FIFA secretary general Jerome Valcke says funding for the World Cup will not be affected by the global economic downturn, with major sponsors for both the 2010 tournament in South Africa and the 2014 event in Brazil.

Sponsors include Sony, Adidas, Hyundai, Coca-Cola, Emirate Airlines and Visa. McDonald’s, MTN and Continental serve as second-tier sponsors.

“Business is good,” Valcke said. “We have not received a single call from one of our sponsors and all the broadcasters, including SABA, are on board. No one has come to us in the present crisis to say they want to discuss or renegotiate their deal with us.”

Tracking Firm Predicts Slowed Sponsorship Spending

Chicago-based IEG predicts a decrease in sponsorship spending by North American companies in 2009, especially for sports.

According to the sponsorship tracking firm’s report, spending on sports, arts and entertainment marketing is expected to increase by only 2.2 percent to $16.97 billion, compared to $16.61 billion in 2008.

It would be the smallest growth rate for sponsorship spending in the last 20 years and is even lower than spending in 2002 in the aftermath of the Sept. 11, 2001 terrorist attacks.

“It is precisely the uncertainty and instability of the current situation that has sponsors holding tighter to purse strings than ever before, not knowing whether the economy is near bottom or whether tight credit, lackluster consumer spending and the threat of more corporate collapses will extend this recession through and beyond next year,” said IEG in the report.

Briefs…

… British telecom giant BT’s four-year deal with the Paralympic World Cup makes it the title sponsor of the largest annual international elite disability sports competition. The partnerships, which begins with the 2009 World Cup in Manchester, England, May 20-25, includes rights for extensive marketing and branding rights.

Written by Greg Oshust.