Brand New View

Olympics, Malaysia, Nike, and...

My interview with BFM Business Radio in Kuala Lumpor, Malaysia was broadcast yesterday. It can be heard at the following link: John Davis' Olympic Games Effect Interview. The interviewer asked a wide range of questions and it is always fun to discuss the many different moving parts of the Olympics. Later this year I will be keynote a global brand conference in London in which I will discuss the Olympic Games. More on that later...

You may have seen the news the other day that Nike is considering an Olympic sponsorship starting at the 2016 Summer Olympics in Rio. While Nike does not confirm or deny the sponsorship, they do indicate that the Olympics are an important athletic vehicle for the company to stay connected to athletes. Nike Brand President Charles Denson discussed this during his appearance at the recent SportAccord Conference. Adidas is an official sponsor of the 2012 London Olympics (not a TOP sponsor, however) and there is no indication that Adidas is backing away from future Olympic sponsorships. Given Nike's impressive list of sponsored athletes that will be competing in the Olympics, the inevitable question of what additional value the company can gain by moving from individual athlete sponsor to official Olympics sponsor arises. Nike's reputation in sports is so well known that one could easily argue an official Olympic sponsorship is unnecessary. At the same time, the known benefits of Olympic sponsorship have been documented for some time, including in my latest book, The Olympic Games Effect. There are risks as well (as I also discuss in my book), including the perennial opportunity cost question and whether an Olympic-sized marketing investment is better deployed tactically in different markets. For decades Nike has essentially played the opportunity cost card, seeing greater value in individual athlete and select team sponsorships, rather than a larger commitment to the Games themselves. The IOC is always looking for new sponsors to invigorate the Olympic funding model and to show the world a diverse set of supporters, so a Nike sponsorship could be quite attractive to the IOC. We'll see what happens.

2020 Olympics Candidate Cities Update

The IOC's announcement that Istanbul, Tokyo and Madrid are the finalist candidate cities under consideration for hosting the 2020 Summer Olympics comes as no surprise. Even though Doha and Baku have been candidates before, both faced significant hurdles. Money was not an issue, since both cities have substantial oil revenues. In Doha's case, the extreme temperatures during August, the typical month for the Summer Olympics, caused their organizing committee to propose changing the date of the Olympics to October, when temperatures are not as intense (although they are still in the mid-30s Celsius). While novel, such a change also wreacs havoc on a number of different international sports schedules, plus represents a break from tradition. Baku's challenge relates to its existing infrastructure, which would require substantial upgrading to accommodate the Games. Of course, both cities will still have the opportunity to again bid, and perhaps one day win the right to host the Olympics. They offered respectable, serious proposals that directly addressed their shortcomings, as candidate cities must do to be credible. But for 2020 the IOC saw greater merit in the proposals from Istanbul, Tokyo and Madrid. Per my post from May 21, I suspect Istanbul may well emerge the winner, although I have no evidence other than a belief that, of those three cities, selecting Istanbul would represent a continuation of the IOC's recent efforts to select cities in new locations. Madrid, of course, has not hosted an Olympics before, but Barcelona did in 1992. Given this year's London Olympics (and even the Winter Youth Olympic Games this past January in Innsbruck), the IOC is undoubtedly concerned about having the Olympics return to Europe again so soon. Tokyo's 1964 Olympics were considered among the most memorable, if for no other reason than they served as a showcase for Japan's economic reemergence after the devastation of World War II. But with Beijing's 2008 Olympics, and the 2018 Winter Olympics in Pyeongchang, South Korea, returning to Asia in 2020 seems unlikely as well. The time between now and the final selection in September 2013 will undoubtedly see exciting and compelling efforts by all three cities to convince the IOC about their respective strengths. For now, Istanbul is my early front runner.

Ethics and the Olympics

Historically, the Olympic Games have had their share of controveries, from athlete scandals (Eupolus of Thessaly, to Fred Lorz, to Marion Jones--Google each of them to learn their respective stories) to political scandals (Nero in 67 AD and, in the modern era, the Sydney and Salt Lake City bribery episodes), and more.  In his post today John Friedman beautifully captures the Olympic spirit by describing a great example of Olympic ethics at its finest. Enough said.

2020 Olympics-Candidate Cities

IOC officials will determine the final candidate cities this week for the 2020 Summer Olympics. The current 5 contenders are: Tokyo, Madrid, Istanbul, Doha, and Baku (Azerbaijan). The first 3 cities on that list are the likely finalists, according to Olympic watchers. Each has experience bidding, so the bigger question is which cities offer the greatest impact for the Olympic movement. 'Impact' is important, because the IOC is interested in factors beyond sheer economic gain. They are also interested in finding locations that enhance reputation of the Olympic Movement, yet the IOC also wants as large an audience as possible. On the surface, Doha, Baku, and Istanbul would appear to be good candidates if the IOC is interested in expanding the range of Olympic host cities to appeal to newer audiences and countries emerging onto the world stage. Yet they have different infrastructure challenges and, as I have mentioned in this blog before, cost is increasingly a concern for host cities (i.e. some emerging market cities may not have the resources needed to host an Olympics). Tokyo, Madrid and Istanbul are also important because they are vibrant, large market cities with rich cultural traditions and a strong affinity for sports with large potential audiences. Using these two simplistic criteria (locations that enhance the Olympic reputation; and locations with large, sports-friendly audiences), Istanbul seems a viable choice. However, as the linked article above describes, both Doha and Baku are cash-rich, due to massive oil reserves, so funding won't be as much of an issue for them, even though they are 'emerging' markets. Of course, we won't know whether Istanbul (or Doha and Baku) even makes the cut this week, let alone is the final choice (which won't be known until September 2013). As we have seen historically, and are witnessing right now with London, host cities each approach the Olympics in their own way. Beijing invested more than $40 billion, although a good portion of that amount was dedicated to infrastructure improvements (new transportation systems, upgraded utilities...), and London is spending about $15-$17 billion, with an emphasis on revitalizing one of the poorest areas of London (Stratford, in east London). The bidding process is not easy, and the implications for the eventual winner are anything but clear (Will long-term economic value be created? Can the Games improve the image of the host city? Will city planners, national governments, local citizens, and businesses be able to work toward a common objective? How can planners ensure a safe Olympics while also making them accessible to as many people as possible? What displacement issues are likely to occur?...). This week we will learn which of those 5 cities will move forward to the final 17 month evaluation phase.

The Olympics and Business Schools

BusinessWeek has an article today on how several business schools are taking advantage of the 2012 London Olympics as a way to directly expose MBA students to a mega-sports event. The article is a useful reminder of the ways business education can be applied  to current business events like the Olympics. The schools mentioned should be applauded for their efforts to make the Olympics a great laboratory for learning how to manage a complex organization. 

Olympics Digital Coverage

Social and digital media coverage of the Olympics has grown significantly since Athens in 2004, which is no surprise. The BBC announced its digital coverage today, summarized in this link. NBC's digital coverage is discussed in this article in AdAge. Both networks are joined by many others around the world in offering greatly expanded social and digital viewing alternatives for the 2012 London Olympics. This massive use of new media, combined with traditional media, risks being overwhelming to many fans, but there is little doubt the future of sports coverage is unfolding before our eyes. Interestingly, many of the broadcasters are uncertain what the fan and viewer response will be, partly because the pace of social media growth has been extraordinarily quick, and many people still are not sure how to make use of the various media choices available to them. Some still prefer the scripted structure and comfort of traditional media, but for hard core sports fans the sheer breadth of social and digital choices promises a rich array of content choices. Few, if any, will be disappointed. Undoubtedly, as digital and social media choices mature, we'll see sports fans gravitate to those they love most and, I suspect, media companies may well be surprised by what fans ultimately choose. While the recently concluded Winter Youth Olympic Games (YOG) in Innsbruck (January 2012) has not yet published final media statistics, the buzz was that a significantly increasing number of fans relied on social media as their primary YOG information source, above and beyond traditional media. Of course, this might also be a function of fewer traditional media companies broadcasting the YOG live. Nevertheless, this is a remarkably good time to be an Olympics sports fan.

IOC and USOC Funding Dispute-The Saga Continues

For the past few years the IOC and USOC have been attempting to renegotiate the share of broadcast and sponsorship funds the US receives. Philip Hersh of The Morning Call writes about this in an article today. In short, the IOC wants the USOC to reduce the percentage of funding it receives, whereas the USOC wants it to remain as is. The US is the only major participating country in the Olympics that does not rely on government funding. Other countries rely on varying levels of government support to fund their Olympic teams. The non-US countries believe that the wealthiest nation on earth should be less greedy and reduce their percentage of funding revenues received from broadcast and sponsorship fees which, proponents argue, would give more money to those nations in greater need and add important support for their athletes. The US view is that because its athletes still win the medal counts in most Olympiads, the US fans would not watch the Games as closely if their team were 'handicapped' by reduced IOC funding. The USOC argues that the reduction in IOC funding would not be miraculously replaced by an influx of government support. Mechanisms allowing government support do not exist in the US, unlike other countries. Instead, the USOC argues that many US athletes would simply be unable to compete, thereby reducing the overall size of the US Olympic team and, arguably, athlete quality, which would damage the Olympics as a whole. Skeptics of the USOC's position find it hard to believe that the US would be unable to justify or find some level of government support. Of course, the current political climate in the US suggests receptivity to government support of the US Olympic team is remote at best. The issue remains unresolved and appears likely to stay at an impasse for the foreseeable future. An unfortunate by-product is that it is unlikely any US city will be a viable contender to host an Olympics for a long, long time. 

New York Times, NPR and Asia...

More news about The Olympic Games Effect...I chatted with New York Times journalist Andrew Adam Newman the other day as background for an article he was writing about P&G's forthcoming Fabreze commercial featuring the Azerbaijani Wrestling Team. My interview about the Olympics with BFM radio will be aired on May 24 and I'll send a link once it is ready. I also have an interview coming up May 29 with a local NPR station called KLCC in advance of a public talk I am giving that night in Eugene at the Public Library.

Not Your Average Horse

MSNBC featured a remarkable story today about Neville Bardos. Not familiar with Neville Bardos? Well, he is the U.S. Equestrian Federation International Horse of the Year. A year ago he almost died when a tragic fire engulfed his barn and he inhaled smoke from the fire for more than an hour. Most experts wrote him off. Along with his trainer, Boyd Martin, Neville Bardos has staged a stunning comeback with good performances in the past few months. The hope is that he will qualify for a spot on the U.S. Olympic team. While such an outcome is still unknown, Neville's story is a good one. And if he does make the team, you can bet his tale of going from tragedy to the Olympics will become part of the media's storyline for the 2012 London Olympics.

The Best Hotels for the London Olympics Are In...?

You might say London would be the best place to stay if you are going to the Olympics. That's certainly logical, but oh so unimaginative. Instead, Katie Kelly Bell of Forbes Magazine writes that 'The Best Hotels for the Olympic Games Are In Paris.' Traveling from Paris to London on the Eurostar is only 2 hours. I've done this journey before and it is great to have such easy access to two of the world's most incredible cities.  Of course, if you are not a fan of traveling under the English Channel in a tube for part of your journey, then you might as well stay in Paris and watch the Olympics on TV. I love Bell's quirky headline, and it reminds me of a similar headline from a print ad for a hotel a couple of decades back. I don't recall the hotel company, but I do recall the ad saying "The Finest Hotel in Boston is not in Boston...". The headline drew me in just to find out what the heck the ad was describing. It is counterintuitive and creative, and serves as a useful reminder to sponsors to think expansively about their sponsorship marketing communications at the Olympics. Of course, TOP sponsor creative campaigns are mostly conceived and ready for launch at this point, but that shouldn't stop sponsors from stepping beyond their comfort zone in an effort to appeal to the global fan base.