01 cover sbi 152.indd - FIFA/CIES International University Network

BRANDS & MARKETING
SHORTSTOP
MARETIN
REAL MADRID: Cristiano Ronaldo,
the world’s most expensive football
player who moved from Manchester
United to Real Madrid this summer,
has not matched the sales boom
when David Beckham made the
same move in 2003. According
to Bloomberg, sales of adidas
shirts are as much as 75 per cent
lower from data gathered across
six sports stores in Madrid. Team
income went up 27 per cent in the
year after David Beckham signed for
the club and 22 per cent of revenue
came from sales of team apparel.
BMW: The car maker signed up as
the latest top-tier domestic sponsor
of the 2012 London Olympics, in a
deal worth an estimated 40 million
pounds ($67 million) in cash and
services. BMW will provide about
4,000 vehicles to transport athletes,
officials and other members of the
Olympic community.
BARCLAYS: Global financial
services provider Barclays
extended its title sponsorship of
golf’s Singapore Open until 2012.
Under the terms of the agreement,
prize money will remain at least $5
million, the field size will increase
from 156 to 204 players and the
event will move to Week 46 of the
annual golf calendar for 2010.
ING: European financial services
provider ING extended its title
sponsorship of the New York City
Marathon for another three years.
The contract - which now runs until
after the 2013 race - was originally
signed in 2003 and has been renewed
twice
IZOD: Clothing brand Izod signed a
multi-year deal with the Indy Racing
League (IRL), the sanctioning body
for the IndyCar Series, to become
title sponsor from the 2010 season.
The deal marks the sport’s first title
sponsorship since 2001. Under the
agreement Izod will also retain its
label of official apparel partner of
the Indy Racing League, which began
in 2008.
188BET: English Premier League
club Liverpool signed online gaming
and entertainment company 188bet
as its betting sponsor. The deal will
run for three years and aims to step
up Liverpool’s profile in Asia.
Phelps is exclusive to Visa - Getty Images Sport
TAKING CENTRE STAGE
Visa is signed up with the IOC for next 11 years, a particularly notable deal and
fee in difficult economic times. Barry Wilner explains the company’s rationale.
CREDIT CARD COMPANY VISA extended its
contract as official global sponsor to the IOC
for the 2016 Summer Games in Rio and onto
the Summer Olympics in 2020. With the
going rate for February’s Winter Olympics
in Vancouver just under $100 million for
the quadrennium, it’s a significant financial
commitment by Visa.
“The Olympic Games transcend political and
geographical boundaries to deliver incomparable
international exposure,” said Joseph Saunders,
chief executive officer of Visa Inc. And analysts
estimate Visa could spend as much as another
$300 million promoting the tie-in with the
Games through the 2014 Winter Olympics in
Sochi. Those are never numbers to dismiss, but
they are particularly notable in these times.
Visa also recently extended its NFL
sponsorship for five years, a deal worth about
$40 million overall. Why the big spend And
why now For one thing, Visa is able to attract
athletes like Michael Phelps to represent the
company, and that association pays huge
benefits. Only Visa, for example, will have an
affinity card with Phelps’ likeness.
Also, Visa and its member banks have
exclusive rights to Olympic symbols, something
they use heavily in advertising. The company
estimated that brand equity increases by 25 per
cent among consumers who know about Visa’s
Olympic sponsorship.
Visa’s recent Olympic promotions have led
to large increases in applications, including a
40 per cent jump at banks for its platinum card
prepared for the 2008 Beijing Olympics. Those
Olympics were viewed as a grand opportunity
to open up the biggest untapped market on the
planet, and Visa dived in by adding 90,000
ATM machines, with more than 200,000
merchants accepting Visa in China.One US
retailer estimated an increase in Visa spending
at 9 per cent for Olympic promotions.
The IOC deal also ensures Visa has a
monopoly on the two biggest global sports
events, the Olympics and the World Cup. “One
wonders whether Visa would still spend as much
as they are if they were guaranteed that their
competitors would not purchase (such) rights,’’
said Craig Depken, an economics professor at
the University of North Carolina-Charlotte who
specialises in sports economics.
“This is potentially the case in many
sponsorship situations: Do firms purchase
sponsorship (be it a stadium name, a NASCAR
car, or Olympic naming rights) because they fear
what their competitors will do This is famously
called the `prisoner’s dilemma.’ Furthermore,
Visa has been a primary sponsor for the USOC
and IOC for quite some time. To abandon the
relationship at this point might raise more
questions than Visa cares to answer - specifically
concerning their financial well-being.”
Visa is one of nine global sponsors for the
Vancouver Games, along with McDonald’s,
Coca-Cola, Panasonic, Acer, Atos Origin, General
Electric, Omega, and Samsung. Panasonic and
Samsung also remain affiliated through Soch
2014 and Rio 2016. Dmitry Chernyshenko, CEO
for the Sochi 2014 Games, said Visa’s extension
helped his city raise its sponsorship budget to
$850 million - five years before any skiers or
skaters compete.
14 SportBusiness International • No. 152 • 12.09