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Category: BMW

U.S. companies paying majority of Olympic freight again

By Philip Hersh


News and comment:

News:  U.S. Olympic Committee sponsor Proctor & Gamble will announce Wednesday it has become an International Olympic Committee global sponsor as well.

Comment:  Another plus for the USOC in its efforts to regain international favor -- especially if, as I suggested last week, it forgoes some or all of its share of the P&G and Dow Chemical deals to help resolve the longstanding revenue-sharing conflict with the IOC.

Coincidentally, with the addition of Dow two weeks ago, the majority of IOC global sponsors -- six of 11 -- will once again be U.S.-based multinationals.  So much for the irrational ranting of some European IOC members who try to minimize the significance of U.S. sponsors in the big picture. BMW

Even more significant:  Dow and P&G both are paying for their sponsorship in cash -- some $75 to $90 million over four years.  The other four USOC sponsors also pay primarily cash, while at least two international sponsors -- Atos Origin and Omega -- give the IOC all value-in-kind, and Acer gives primarily VIK.

It's also worth noting the USOC is the only country in the handful (Germany, France and Italy among them)  with individual IOC global sponsorship revenue-sharing deals that takes some of its share in VIK.

News:  Monday, BMW and the USOC finalized a six-year sponsorship deal worth a reported $24 million in cash.  The German carmaker is the first foreign auto company to sponsor U.S. Olympians.  It also is providing substantially lesser amounts of cash in six-year deals with four U.S. sports federations - track and field, swimming, speedskating and bobsled / skeleton.  Bobsled also will get some technological assistance.

Comment:  The USOC was left in the lurch in 2007 when General Motors, which was headed for bankruptcy, decided to end after 2008 a partnership that had existed since 1984.  GM paid the USOC about $5 million a year in cash, provided vehicles and spent $100 million in advertising on Olympic telecasts, according to Sports Business Daily.   BMW will not supply vehicles but its cash is welcome for a USOC facing an uncertain financial future after 2012.

News:  USA Track & Field's volunteer board of directors is turning an annual review of its salaried CEO, Doug Logan, into a power play that could result in his being forced out after barely two years in the job, according to both media reports and Tribune sources.

Comment:  Just another example of the old axiom that the only amateurs left in the Olympics are those running them.

The USATF board has apparently given Logan about a month to respond to criticism in three areas, including sponsorships, athlete relations and expenditures.  His answers may determine his future.

Dumping Logan without just cause likely would not sit too well with the USOC, which spent several years hectoring USA Track & Field to reform its governance -- that reform occurred in December, 2008 -- and telling the board to stop meddling in the federation's day-to-day affairs.

Sacramone1 It should be noted this is the third time in the past six years the USATF board has gone after the CEO.  It happened to Craig Masback in 2004 and 2007 -- and he resigned to join Nike in January, 2008.  That is the sort of meddling at issue.

And imagine how financially reckless it would be in these economic times for the board to fire Logan willy-nilly with an estimated $1 million -- and a severance fee -- left on a contract that expires in 2013.

When I spoke with him Monday, Logan referred any comment on his situation to USATF President Stephanie Hightower, an Ohio State grad who is the most decorated high hurdler in collegiate history.  When I reached her, Hightower declined to comment on a personnel matter.

News:  Star-crossed 2008 Olympian Alicia Sacramone made her post-Beijing return to competition in last Saturday's CoverGirl Classic at the UIC Pavilion. ( For my story on her comeback, click here.)

Comment:  Sacramone's return was a success, with victories in both events she entered, the beam and vault.  ``Now that it's over, it feels great,'' she said.   Sacramone will try to regain a spot on the national team at next month's U.S. Championship.

Photos: (Above) --  Olympic speedskating champion Apolo Anton Ohno on a BMW motorcycle during Monday's announcement of the German carmaker's sponsorship deal with the USOC and four U.S. sports federations (Associated Press / Evan Agostini); (Below) - Back on the beam:  Alicia Sacramone winning the event Saturday in her return to gymnastics competition after a two-year absence.  (courtesy USA Gymnastics / John Cheng)


Philip Hersh: Can USOC avoid stain from new deal with BP?

The U.S. Olympic Committee is caught between a oil-covered rock and a dried tar hard place in its relationship with BP.

In an economic climate where sponsorships are hard to find, the Olympic committee can't afford to thumb its nose at the British company that signed on as a major USOC sponsor in February.

In an emotional climate where BP looks more and more villainous to the U.S. public, the USOC may find that its relationship with BP is toxic, a four-year deal worth an estimated $10 million to $15 million notwithstanding.

Fortunately for the USOC, the sponsorship has not been activated in any visible way, so you don't see the athletes likely to be stars of the 2012 Olympic team pitching for BP.  And it's unlikely any U.S. athlete would want to be publicly associated with the company for the foreseeable future.

I mean, can't you see the cartoons and fake videos of swimmer Michael Phelps losing a gold medal because he is trapped in an oil slick?

A month ago, USOC chief executive Scott Blackmun told the Associated Press he did not believe the deal with BP was in jeopardy.

Since then, BP's reputation has looked more and more like the tar balls hitting beaches as the oil reaches them.

The USOC clearly has chosen to await the outcome of the crisis before deciding how best to proceed in its relationship with BP.

"BP is in the middle of a crisis that everyone is interested in resolving as soon as possible,'' USOC spokesman Patrick Sandusky said in an e-mail Thursday.

"Based on our discussions with them, it appears that they are doing everything they can to stop the spill and to mitigate its effects. They have agreed to take full responsibility for all of the cleanup costs.

"This is a terrible accident that has affected an untold number of people as well as our environment, and we trust that BP will continue to act aggressively to stop the flow of oil into the Gulf of Mexico, to address the damage that has been done and to ensure that this tragedy is not repeated.''

Should BP do what the USOC -- not to mention the U.S. government and public -- expects of it by making good on all promises and properly compensating victims, there may be a way for both parties to benefit.

Many U.S. Olympic athletes and Olympic hopefuls need part-time jobs.  BP undoubtedly will have to hire hundreds (thousands?) of people to clean up the mess its mishandling of the drilling platform disaster is leaving.  While priority for such jobs should go to anyone whose livelihood has been and will be affected by the oil pollution, maybe BP could also hire some athletes who are training for the 2012 and 2014 Games.

In the meantime, as Sports Business Journal first reported this week, the USOC has landed another foreign sponsor, BMW, to replace General Motors, which did not renew its USOC deal when it expired in 2007.

While the USOC will not confirm the deal, sources have indicated the particulars of the SBJ report ($24 million, six years) are accurate.   It's all cash, so don't expect Blackmun to be tooling around Colorado Springs in a new Z4.

Of course, the way things are going for the USOC, he would be getting a BMW recall notice any day.

-- Philip Hersh


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