The Importance (And Relevance) of Official Olympic Sponsorship

This Olympics-focused editorial series is written by Ronald Urbach, Chairman of law firm Davis & Gilbert LLP and the co-chair of the Advertising, Marketing & Promotions Practice Group at the firm.

How many of you have seen this phrase in advertising on the Olympics broadcast: Official Sponsor of the U.S. Olympic Committee? We have all seen these words before. But take a moment and think about them. What do these words really mean? Who cares what they mean?

Consider the word - "Official." The key authorizing party behind the Olympics has decided that some companies will be in the club and the rest will not. To get in the club, a company has to enter in to a formal sponsorship agreement and pay a substantial fee; and in turn, it gets the right to call itself an Official Sponsor.

What's so special about being an official sponsor of the Olympics? If you want to use those five interlocking rings in your advertising, or use the word Olympic or Olympiad in your collateral or on your packaging, or use certain other Olympic-related names and symbols to support your marketing programs, then unless you are an Official Sponsor, you are out of luck. The United States Olympic Committee, the USOC, has a potent weapon to protect itself in its arsenal.

A federal law gives the USOC the exclusive rights to control those names and symbols. This makes the Olympics different than any other sports event or league - even the mighty NFL does not have this protection in their hip pocket.

Why does the USOC have this special right? There is only one word you need to remember. No, for those who saw the film The Graduate, it is not plastic. It is money. Consider this: fielding an Olympic team, running training facilities, hiring coaches, traveling to events, and more, all costs money, and lots of it. In the days of the Cold War, the United States "fought" Russia at the Olympics - state-sponsored professional athletes versus marketer-supported amateurs. Today, same fight, different opponent - state-sponsored professional athletes (China) versus marketer-supported amateurs (USA). Well, maybe not amateurs today - just look at the U.S. Olympic basketball team.

The London Olympics is rumored to have cost over $14 billion to stage. These costs are one reason why the City of London and the British government have taken extremely strong and comprehensive steps to make the London Olympics - at least in and around the actual venue - ambush proof. Those businesses that have tried to cross the line and "unofficially" tie in with the Olympics have suffered the full weight of the British legal system. Even the most sophisticated of companies who are smart about how they advertise and market have had to work extra hard not to run afoul of the restrictions.

When you move beyond the legal rules and skirmishes that invariably result between the ambushers, the real battle - and one for which there is no clear cut winner - is determining, what is the ultimate value of being an "Official Sponsor?"

An Official Sponsor can benefit from many promotional opportunities, like giving tickets to its best customers or entertaining clients at Official events. But in the advertising battleground, what do consumers think? They see two different competitors advertising on the Olympics broadcast, one is an Official Sponsor and the other is not. Sponsors hope that the good will that a consumer has towards the games and athletes will transfer to the official supporters of the games. The end game will be increased sales.

Will consumers feel differently about the Official Sponsor? Is the opposite true? Will consumers look negatively upon those who are not Official Sponsors and just advertisers on the broadcast of the games? What about those who are not simply sponsors, but are active and aggressive "ambush marketers?" What is ambush advertising?

Advertising on the Olympics broadcast by a competitor of an Official Sponsor does not make this advertising "ambush marketing." Using a sports theme, celebrating athletes and competition, showing certain common sports, and even referencing a location named "London" does not make a competitor's advertising ambush marketing. A commercial that celebrates the athletic ability and competitor in each of us, like Nike did in its London spot, is a good example of celebrating sport and people without violating any organization's rights.

Every Olympics there is hand wringing over how to protect the rights of Official Sponsors and how to stop "ambush marketers." The London Games has shown the world how to protect the rights of Official Sponsors. The future revenue stream necessary to pay for the ever more expensive future Olympics now remains protected.

As for the consumers, they are smart enough to know who are Official Sponsors and who are not. They get it. This means that the ultimate advertising and marketing value of Official Sponsorships of Olympics will be for the consumers to decide, not the lawyers.

Ronald Urbach is the Chairman of law firm Davis & Gilbert LLP and the co-chair of the Advertising, Marketing & Promotions Practice Group at the firm. His clients include numerous multinational, national, and regional advertising agencies, including those agencies that are viewed as being the top creative agencies in the world. Ron can be reached at rurbach@dglaw.com.