Corporate America's high stakes in the Los Angeles Olympics
Corporate America loves nothing so well as success. And if half the world is watching, so much the better. For success, the Olympics are turning out to be a blue-chip investment.Skip to next paragraph
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The Los Angeles Games - the first private, business-supported Olympics - have already taken on the unmistakable glow of a well-conceived, well-executed spectacular. For the corporate sponsors who shelled out millions (some more than of events.
The private Olympics, the general theme here runs, is an Olympics that worked.
Corporations - apart from television broadcasters - are contributing roughly a quarter of the $500 million cost of the 1984 games. But this represents just a fraction of what companies pay to sponsor the games. They must spread the word of their sponsorship to the public.
And 30 seconds of prime-time television during the Summer Games cost just a little less than supporting a world-class cycling team with traveling expenses, gear, custom bicycles, and a full-time coach for a year.
Just what the payoff is to companies, no one is certain. But there are few apparent regrets.
No one has fared better than American Telephone & Telegraph. Something happened during its 9,000-mile, winding New York-to-Los Angeles Olympic torch relay that caught hold of the public spirit. An estimated 30 million people lined roads across the country to watch the flame pass. As it traveled, the torch left a wake of sentiment that seemed to combine patriotism with a more basic community-of-man feeling. The company could not have written it better as a script.
Southland Corporation, better known by its Seven-Eleven convenience stores, has taken a different approach to the games. The company has built the $3 million Olympic velodrome for the track cycling events, has nearly finished another $2 million velodrome in Colorado Springs, spends $300,000 to $400,000 a year supporting a coach and racing team of eight men and four women in 50 to 60 cycling competitions a year, and is putting on a five-day, multicity victory tour for American Olympic medalists at the close of the Los Angeles Games.
American cyclists have won eight medals so far in Los Angeles, after more than 70 years since an American has even survived a qualifying round. These medals, a Southland spokesman says unequivocally, ''were won because of Southland's involvement.''
McDonald's, just ahead of Coca-Cola as the largest Olympic TV advertiser, is in for a major share of Olympic glory. The company gave $5 million directly to the Los Angeles organizers, spent $4 million building a swim stadium for swimming, diving, and synchronized-swimming events, and gave $1 million to the US Olympic Committee.
This $10 million investment, a McDonald's spokesman says, ''is just the smallest part of the cost of sponsorship.'' The major part lies in advertising costs. The cost of McDonald's air time alone has been estimated at six times the cost of the swim stadium.
What this investment is worth to the company, apart from keeping the company name constantly in the public eye, is community goodwill. People, spokesman Bob Kaiser says, ''are going to see that my McDonald's restaurant is supporting the Olympics, or the US Olympic team.''
Levi Strauss & Co. has found a fitting way to be there at some peak Olympic moments. When the American team marched into the stadium at opening ceremonies, it was decked out in Levi's. Whenever US team members takes the victory stand, they wear Levi's Actionwear. The company is supplying 60,000 Olympic staff members with some half a million items of free clothing, as well as outfitting the US athletes with a 49-piece ensemble. Altogether the company has spent $12 million clothing two US Olympic teams, two US teams for the Pan Am Games, and the '84 Olympic staff. With promotions and advertising, the cost comes to around
For most companies, the Olympics tie well into larger strategies. M&M/Mars Inc., known for M&Ms, Snickers, and Mars bars, bought $5 million rights to dub its products ''official snack foods.'' Why?
''Certainly we want to increase sales,'' says public-affairs director William Deeter, ''but primarily we want to dispel myths concerning our products'' - chiefly the notion that its candy bars are not good for you. The Olympic connection gives the company a chance to show top athletes eating their chocolate confections as a snack, rather than as an ''indulgent treat.''
Fuji Photo Film, a Japanese company, wanted to establish itself in the American market where it was relatively unknown. Associating itself with the Los Angeles Olympics, as well as with the other sponsors, has helped Fuji become a trustworthy presence both with consumers and retailers, spokesman Tom Shays says. ''Our sales curve is way up.''
This probably hurts at Eastman Kodak. Kodak had the first chance at becoming the official photo company but let it slip to Fuji. Now the American company has spent as much as some of heavy-hitting sponsors to link itself with these games.
For AT&T, the torch relay was more strategic than it could have guessed. Since the company decided to carry out the project, it has been battered by a difficult, court-ordered breakup. The once-giant corporation needed to regain its company spirit, its confidence. It also needed for the public to see it in its new role as a long-distance telephone service.
The torch relay cost AT&T about $5 million. About 10,000 people were involved altogether, many of them AT&T employees who volunteered to spend a week of vacation time traveling with the torch convoy.
''We're bathing in euphoria from the people all around us,'' Bill Higgins, project manager for the relay, says.