The Increasing Importance of Sponsorship in Winning the Right to Host International Sporting Events
28th January, 2013
Last week Olympic bidding city Istanbul announced the signing of 7 leading Turkish companies as sponsors of their bid for the 2020 Olympic games, a $20m deal that organizers feel could swing momentum away from the favourite Tokyo. While to some extent this announcement was simply a show of financial strength and a dig at Japan’s stagnant economy, it raises a question that has been increasingly important in the bidding for the Olympic Games and World Cup in recent years;
How important has the ability to attract, and successfully handle sponsorship become in winning the right to hold these two major international sporting events?
‘The Olympic Movement should take great confidence that Turkey will be able to deliver a significant amount of high quality sponsors should we win the rights to host the games.’
This claim has been widely backed by public opinion, UK bookmakers signalling the change in momentum by the cutting odds on the Turkish capitals bid in half, making them a close second behind Tokyo.
Istanbul is by no means the first city to use sponsorship as an early show of strength in an Olympic bid. Our own London 2012 team publicly announced the support of 25 national sponsors to the tune of £6m back in May 2004, 8 years before the event and over a year before the final vote.
It is not only a bid’s ability to bring in national sponsorship that has become increasingly important in securing an event, but also the ability to provide the optimum platform for international sponsors within a host city/country.
The agreement of both Olympic and World Cup bids to provide the events sponsors tax waivers is needed for an organization to even enter the process. While in London this was actually declined by all sponsors within the Olympic Park due to the economic decline, it highlights the necessity for a bid to be willing to yield significant power to sponsors.
The importance of event holders working for official sponsors has most dramatically been shown in Brazil, where legislation banning alcohol consumption in football stadia was overturned last summer. The ban, put in place in 2003 to tackle domestic fan violence, was overturned in Brazilian Congress under FIFA’s request due to Budweiser’s positions as the exclusive alcohol brand of the World Cup. Commenting on the ‘Budweiser Bill’ FIFA General Secretary Jerome Valcke could not have been clearer on the importance of this sponsorship to the event and the need for the hosting country to acquiesce; ‘Alcoholic drinks are part of the FIFA World Cup, so we’re going to have them. Excuse me if I sound arrogant, but that’s something we won’t negotiate’.
As each event passes the importance of sponsorship to both bidding cities/countries and governing bodies will only grow as the revenue provided by sponsorship becomes even more central in funding the creation of the vast infrastructure needed. As this happens, the ability to both attract national sponsorship and work well with the events official partners, will increasingly be at the heart of all successful bids for these major sporting events.