Tuesday Talk -- IOC Marketing Chief on Future of Olympic Sponsorship

The Tuesday Talk Is Presented by

Helios Partners

(ATR) Gerhard Heiberg tells Around the Rings the value of the five rings is at an all-time high despite an economic downturn that left the market for new Olympic partnerships "completely dry" in recent years.

Heiberg spoke to ATR on the sidelines of SportAccord about selling the IOC brand, his recent heart attack and the future of Olympic sponsorship.

Around the Rings: What can you say right now about the direction The Olympic Partner program is taking? Do you feel that there are going to be additional TOP sponsors coming abroad before London, or is now a renewal phase?

Gerhard Heiberg: We’re doing both. There are still three companies which we would like to have on board after 2012. And at the same time, we are still talking to companies interested in coming on board as number 12.

As you know, we have 11 for the time being. Time is slowly but surely running out, but I still hope that we can get number 12 on board before London. I never guaranteed we could. What I said I hope is that we should pass the $1 billion mark when it comes to revenues. We are at around $960 million, so we need another one. Whether we get it or not, I don’t know at this stage. But we are in contact with some companies, yes.

ATR: In more than one category?

GH: Yes, in more than one category.

ATR: So one of those you hope will bear fruit?

GH: That’s correct, and then we have the renewal process.

GE is of course a little bit dependent on what we do on the television side in the United States. We have Acer, and so we will see. McDonald’s is the third one. We are in contact with all three of them, of course.

ATR: And this is for 2014 and 2016?

GH: Yes. And if they want, also until 2020, as we have Coca-Cola and others.

ATR: There has been a bit of churn, it seems, in the computer hardware category that Acer holds. There have been two or three of those sponsors over the recent years.

GH: That’s correct, the difficulty being that this is a technical category and things develop very quickly, so they overlap each other in many ways, and then they see that what we thought we went into has now been taken over by some others that have developed into this, so it’s not easy to define clear lines here.

It’s easy for Coke and for McDonald’s and Visa, but it’s not easy for the technical part of this. So the category is changing, and that makes it difficult.

ATR: And you suggested there may be some link or some connection between the TV rights in the United States and continuation of the GE sponsorship?

GH: I’m not saying that the one is dependent on the other, but as you know, GE owns NBC, and now Comcast has come into the picture, but we tried to talk to GE hopefully to get them regardless of what happens with the TV contract.

So I don’t say that they’re dependent, but some people are looking at this, of course, and saying these two things should be seen together. We hope that the marketing aspects are so interesting for GE that they will continue whatever happens with the TV contract.

ATR: GE seems like the sort of company that would be a good fit for a worldwide sponsorship regardless of whether they were involved in the broadcasting business.

GH: That’s correct. And GE has had some good returns, especially in China, for their sponsorship. So we hope to separate the two. TV is one thing, and sponsorship is another.

ATR: I imagine you are pointing out to them that there are probably opportunities for them in Russia and Brazil as well for their growth.

GH: And everybody’s interested in, especially, Brazil, or South America. The Games, as seen from my perspective for marketing, yes they are in Rio, and that’s Brazil, but also all of South America could be included in this. It’s a totally new continent.

ATR: A lot of room for development and growth there for companies?

GH: Yes, and that’s one reason why companies have come to us and said it’s interesting that you’re going to Brazil. We want to get more involved in South America, and the basis could be partnership in Rio.

ATR: What is the climate like when you go out and make sales calls now on behalf of Olympic sponsorship? Is it different than it was a year or two ago? Are companies giving you more attention without worrying about the economic situation?

GH: Yes, I think we had some tough times, and we had the financial crisis, and it was completely dry for us. But now things have loosened up, and that’s why I say we are in contact with some companies, and they were not there two years ago, but they are there today.

It is a little more open than it was a couple of years ago, so things have improved as seen from our perspective.

ATR: Looking at the 2018 Winter Olympic race and the way you see it shaping up right now, is it possible for you to offer any kind of ideas about how the different cities are doing and what you think of their particular plans?

GH: Now I have to be very careful.

As you have seen, all the three cities are able to stage very good Games. PyeongChang is in the race for the third time. They know very much what this is about.

Munich has also a good reputation with Garmisch-Partenkirchen. They also know what this is. They had their world championships in alpine skiing. They went very well.

Annecy is a newcomer to this, but with traditions, especially in alpine skiing, and they have a much better concept than they originally had. So I think honestly speaking, the race is open. I would not bet on one of the three today. I think it’s very open, and a lot will depend on our meetings on the 18th and 19th of May.

ATR: As you look ahead now towards London, how do things look from your vantage point for the partners that will be coming to London next year?

GH: I think it looks very good. I am impressed by the total number of sponsors, by the money they have been able to attract from the sponsors, and that was in the middle of the financial crisis, and still we are getting new sponsors on board for the third-tier. I think they are doing extremely well. I am impressed, as I said.

I had not expected such a good result, so they are doing well. And I know from having talked to many of them that the sponsors so far are happy, so I think this is a good marriage between the sponsors and LOCOG, so I look forward to helping them in staging the Games also for the sponsors here. They are very positive.

ATR: You have to feel confident and comfortable when you meet with people from potential sponsors or companies that may want to renew their sponsorship. You really believe that the Olympics are a good business proposition despite the amount of money that has to be spent. It’s not an insignificant sponsorship, but it’s good for business?

GH: I have always believed in this. I think the Olympic ideas and values are strong. This attracts a lot of the companies.

It’s a question, of course, for the IOC to see to it that theory and practice will be the same, so we also follow our own ideas and values. So when I’m out talking to new possibilities, yeah I really believe in this. I really believe that this is good for the companies, and for us also it’s not a question of finding the highest amount of money. It’s a question of finding a company that not only respects what we’re doing and our values and ideas, but follows the same impulse.

So it has to be a marriage of two equal partners, and that’s what we’re looking for. And some stumbling block could be the amount of money they have to pay, no question about it.

So yes, I talked to many, and they think it’s too much money. Fine, I’m sorry but we don’t want to reduce the value here.

To us it’s important to show what we’re doing, to show the five rings. And I take the liberty of saying that the five rings have never been stronger than what they are today. So it’s a good story to get across to companies. It’s a good story.

ATR: And is TOP a program that will stay?

GH: We have discussed that many times, and we feel that it will stay until at least 2020. That’s why we have not gone any further. We would like to have companies until 2020. Coca-Cola was the first one to sign to 2020. Others have come after.

We do not want to go any further, so that we in a couple of years time again can evaluate should we continue the TOP program or should we from 2020 change into something very different. Today we don’t see the change but still we want to give that opportunity in 2014, 2015 or 2016 to see whether we should change it radically or continue and then add on 2022, 2024, 2026 and so on.

ATR: When news came about your health situation, everybody was concerned about you. You are very well-loved and respected by your colleagues and people who know of you in the Olympic Movement. You’re ok. You’re in great shape, it seems like.

GH: I love being involved in the Olympics, and I really believe in what we are doing.

As you know, we don’t make any money, and I don’t care. I love being involved in this. I really believe we have a mission in life, so I was, I must say, very positively surprised that so many people got in touch with me and wished me well, and it made my heart heal a lot faster than it otherwise would. It was very touching, it was very nice. Again, I want to give something back to my colleagues and the IOC, so I’m not leaving until I disappear completely.

Interview conducted by Ed Hula.

Homepage photo by Neil O'Shea.