Business News Strategies and Opportunities in Olympics Sport Regions
OlyBLOG HOME

Regional Business News
regarding the 2010 Olympics
in British Columbia, Canada

OlyBLOG is for businesses across Canada, especially in Vancouver / Whistler and throughout B.C. We also hope companies in Alberta and United States (i.e. Washington, Oregon, Idaho, Montana and California) will find OlyBLOG interesting and informative.







CURRENT NEWS:
BELL RECOGNIZES B.C. IS BOOMING
- YOU SHOULD TOO!

Bell Canada came out swinging big time with a bid of $200 million for licensing rights as the first official Olympic sponsor in 2010, and they won. They won over western rival Telus. Money always wins - or does it?

If you've done your homework you'll know there is more than one way to get from 'A2B'. Atlanta and Sydney are the most infamous examples of cities that didn't skulk away with tails between their legs when things didn't go the way they expected. Atlanta set up 'Tent City' when they became disheartened with the IOC and local Olympic organizers, and gave local and competitive companies direct access to Olympic crowds, much to the consternation of official sponsors. Sydney was even bolder when they snubbed the official courier 'UPS' and instead gave their courier business to Australian company 'TNT' - who delivered admirably.

Don't misinterpret what I'm saying above, outright ambush marketing isn't good for the overall health of the Olympic industry, but if Olympic organizations selfishly monopolize and shut everyone out (especially SMBs - small and midsize businesses) they will suffer consequences similar to what record companies did when consumers went online. Smaller players now have direct access to consumers.

The fact that Bell paid $200 million and outbid Telus by $65 million says a lot about how important big business feels it is for them to leverage Olympic momentum. Bell's "Premier National Partner" sponsorship is by default a long term investment because it will be virtually impossible for them over the short term to realize a profitable financial return in direct relation to the Games.

The numbers don't add up for Bell to come out of the affiliation in the black. But Bell knows that the whole world is watching and that they cannot buy this type of exposure - well not directly at least.

It's surprising for some that a company as supportive as Telus to the Olympic bid has lost the opportunity to become an official sponsor. Some westerners might see this as an east beats west scenario, but don't fall into that trap, even though it does underscore quite dramatically that the hometown favorite isn't a shoe-in. It does however send a strong message to all companies big or small to prepare now to get in the game.

Bell is good for B.C. for a number of reasons. For starters, Telus needs competition in order to keeps prices fair and improve services. Plus, not only did we win the 2010 bid, we now have a large central Canada corporation investing in our province. Can it get better? The east is going to spend money in B.C. that benefits and stays in B.C. - as long as VANOC manages the relationship responsibly.

Regarding Bell's win over Telus, John Furlong, CEO VANOC said, "This is an Olympic competition, and there can be only one winner."

Funny, in Atlanta when NIKE said, "You do not win Silver, You lose Gold" the IOC went crazy and accused NIKE of unfair sportsmanship. Hmm, double standards. The "only one winner" part is unsettling to say the least. I hope Furlong doesn't extend this same attitude to taxpayers and SMBs.

Similar excessive sponsorship bidding occurred regarding television rights in Calgary in the 80's. Olympic organizations go for the money every time - whether it is the responsible thing to do for the community or not. As a rule, it's always better to have a sponsorship partner that feels like they are in a win win situation. I hope Bell feels this way considering they trumped Telus by such a wide margin. If Bell is going to become part of our community it's important that we have a civil relationship from the beginning. Things can get very nasty very quickly if not. When VANOC accepted Bell's bid I hope they didn't sell out respect for our small and midsize business community.

The IOC does not operate from a platform of fairness and when SMBs think about developing 'marketing momentum' strategies they should keep this in mind. The IOC is a business machine. Like all good businesses they look out for themselves first.

In 1984 the IOC met with ABC, NBC and CBS in Lausanne, Switzerland to negotiate the television rights for Calgary '88. Negotiations were going well for the IOC and Calgary, and it wasn't long before CBS dropped out when the stakes jumped out of their reach. Bidding between ABC and NBC came to a standstill with both networks offering $300 million. It eventually came down to an auction-like bidding process with bids escalating at four and five million dollar increments. ABC won the bid at $309 million. The IOC knew that ABC would never make their money back on the deal, but they let them hang in the wind. They also knew it wouldn't be good for the Olympic reputation to so-overtly take advantage of partners, but hell, that's business. ABC needless to say felt duped.

The IOC could have easily capped the bidding, but chose not to intervene. The old saying, "You don't get what is fair or what you deserve, you get what you negotiate" was never more appropriate. SMBs should have the same attitude. ABC overpaid and essentially lost somewhere in the neighborhood of $75 million.

The IOC can be nasty when it comes to protecting their pile of gold. In Atlanta for example The IOC became incensed with the city itself when the mayor set up tents in the downtown core and rented city facilities to competitors of official sponsors so they could market their products. The city of Atlanta recognized quickly that if they didn't do something to represent SMBs that a very large portion of the business community would suffer. They did what they had to in order to serve the public at large.

After this bold move by Atlanta's mayor, the Director of NBC Sports Dick Ebersol issued an order that if any of his camera personnel shot Atlanta city streets, skyline or buildings, etc., even inadvertently, they would be fired on the spot. I want you to understand very clearly what was happening. The IOC and NBC moved into Atlanta, disrupted the city for five years leading up to the Games with noisy, dirty, dusty, traffic-rerouting construction. The cost of living and doing business in the city became artificially inflated, taxes went up, security became unbearable, citizens even had to suffer a bombing because the IOC couldn't protect the city properly, and Dick Ebersol from NBC had the nerve to refuse to videotape the city because small and midsize businesses wanted a chance to share in the event.

What we're talking about here is that companies like Coca Cola, Kodak and other TOP (The Olympic Program) sponsors were pushing wheelbarrows of cash to the bank, and Dick Ebersol from NBC, out of spite retaliates against a city that wasn't breaking any laws or doing anything unethical. Dick Ebersol of NBC decides to play God. Is it any wonder that a few years later Salt Lake City imploded under bribery charges and corrupt judging scandals?

Hopefully we won't have to deal with these issues, but as good as Bell's $200 million sounds, an important question begs to be asked. How is it possible John Furlong and his team of experts so grossly undervalued what Bell deemed Olympic sponsorship to be worth? It's wonderful that VANOC scored $200 million, but if they were so far off the mark in their initial expectation of $50 million, how far off the mark are they regarding construction costs and future expenditures? Is anyone on the team doing any real research? The Bell/Telus spread is way too wide for the conservative business community. It might look good to the average consumer who knows little about commerce, but to someone who manages businesses based on statistical information it signals serious cause for concern.

The best part of all of this for SMBs is the irrefutable fact that there is incredible value in being associated with an Olympic event. Bell proves it by ignoring their short term financial loss. $100 million would have been incredible, but $200 million? Bell knows they will be adequately rewarded in visibility alone. On a lesser scale your company has this opportunity too. You simply have to know how to leverage it proportionately.

As an SMB, what are you doing to leverage the momentum and raise your visibility? How do you look in the public eye and to the legions of Bell corporate purchasers who will shortly descend on B.C. looking for a long list of infrastructure products and services to make this happen? It's obvious they're prepared to spend. Are you prepared to service their needs? Start with your website. Does it represent you accurately? Do you look like a winner, or a refugee from a have-not province?

Envision the following Bell scenario . . .

Bell will need a wide variety of products and services and they'll need them quickly - a large fleet of 'vans" for example. They'll assign a junior staffer to do the preliminary sourcing. Young people live online. They eat and breathe it, so much in fact that television networks are trying to figure out how to woo them back. The 18-34 demographic spends more time on the internet than they do watching TV, and as a consequence they're very familiar with its intricacies. Even though a Bell supervisor may give them specific direction regarding how and where to source 1000 vans, without doubt the junior exec is going to do it the fastest and easiest way he or she knows how - via the internet. Vans are just the beginning. Bell and all the other sponsors, contractors and subcontractors will soon be looking for literally tens of thousands of products and services. Are you ready?

One thing Bell can't do is import everything they need from Ontario or Quebec. If they want to avert a public relations nightmare they better shop close to home - our home - for everything they need to make this a promotional success. Bell's Achilles heel is that they must come out of this looking good because looking good is all they have.

Interestingly, the IOC constantly complains that 'ambush marketing tactics' scare off potential sponsorship companies like Coca Cola, UPS, Walmart, Bell, etc. Obviously not all large corporations agree. Is the IOC's whining merely a ploy to more effectively control a monopoly? Sounds a lot like major record companies blaming MP3s for poor sales when in fact it's bad management on the label side. Recording artists starve and so do athletes while the big players roll in money. Starting to see any similarities?

I don't support the concept of ambush marketing in it's pure state, but there certainly is much you can do to leverage your company against Olympic energy using innovative marketing momentum strategies.

Even if your company doesn't have a product or service that Bell or the Olympic organization can consume directly from you, I hope you're starting to see the value of putting on your best business attire and showing up for the spectacle.



NEW YORK CITY HAS VANCOUVER IN ITS SIGHTS

If you have any doubt how bright the spotlight shining on Vancouver already is check out NewYorkGames.org. New York Games keeps New York citizens apprised of New York's Olympic BID for 2012. The site often uses Vancouver 2010 as an example, and each time it does more and more New Yorkers learn of B.C., our people and our industries. Do you still think it's not important to not have a web presence that reflects your company accurately? Think again!

New Yorkers have tremendous wealth and they use it to travel for pleasure as well as purchase industrial products and services from around the world, not to mention they are constantly on the prowl to source new locations for subsidiary companies. If you've ever had any dreams of exporting your products or services around the globe these are the people you want to meet. All you have to do is let them know you're available and let nature take its course.


*Ed. Note: We invested over three years and a six-figure budget researching Olympic organization relationships with sponsors, contractors, suppliers, partners, etc. The results surprised us too -- mouseover below







Have a comment?

»»CLICK HERE««








Learn more about the challenges small and midsize
businesses face. Leverage Olympic Momentum