The International Olympic Committee (IOC) is meeting in Malaysia’s capital, Kuala Lumpur, this week to decide where the 2022 Olympic Winter Games will be staged. For the first time since 1981, when Seoul beat the Japanese city of Nagoya to host the 1988 Games, the final choice is between just two cities. Either Beijing will become the first city to host both a summer and winter Games (and both in just 14 years) or the IOC will award one of the world’s largest sporting events to a largely unknown city, Almaty, in the world’s ninth-largest country (and the largest land-locked country), Kazakhstan.
Although the final vote will be straightforward, the 2022 race has been anything but for the IOC. Bids, or potential bids, from the likes of Munich, St. Moritz and Oslo were all nixed, amid growing concerns about the costs of staging the Games and the use of public funds to do so. Those concerns stemmed largely from the US$51 billion figure – the amount it cost to stage the Games plus the wider infrastructure spending by Russia – attached to Sochi 2014, the last winter Olympic Games.
The IOC has moved to appease those concerns, through its Agenda 2020 reforms, which were passed in December last year: Olympic bidding races in future will be less about adhering to a set of pre-defined IOC requirements and more flexible, with an invitational phase introduced to promote dialogue between bidders and Olympic chiefs. That dialogue is already happening between the IOC and the potential bidders for the 2024 Games, the likes of Paris, Rome and Hamburg, but the Agenda 2020 changes came too late to have a significant impact on the 2022 bidding cycle.
Hosting the world
As vital as the host city is, however, Repucom’s Head of Consulting in the United States Michael O’Hara Lynch suggests that from a sponsorship and marketing perspective Friday’s decision is unlikely to cause major commercial ripples.
“The global power of the Olympic movement and the celebration of the world’s athletic achievements means it is less important where the Games are staged,” he says.
“TOP sponsors will activate their Olympic partnership in as many relevant markets as they can around the globe, not just in the host country”, O’Hara Lynch says.
The IOC currently has 12 worldwide partners – part of what it calls its TOP programme – including Coca-Cola, Dow, GE, McDonald’s, Omega and P&G. Only one, Samsung, is not signed up until at least 2020, while three, newcomers Toyota and Bridgestone, plus Panasonic, already have contracts which run until after the 2024 summer Games.
Almaty: first-time bidder
Friday’s vote, however, will trigger action in the winning country, with a comprehensive domestic marketing programme to be launched to help fund the Games.
In its 2022 Evaluation Commission report on Almaty’s bid, published in June, the IOC noted Kazakhstan’s ‘limited experience with complex, high-value marketing programmes related to sporting events’. It added, however, that the bid’s sponsorship and licensing revenue target of US$615 million, based on a plan to have seven tier one partners paying an average of US$57 million each plus seven tier two and ten tier three partners, was ‘consistent with past Games and could be achievable with strong support from entities owned by the national Sovereign Wealth Fund, and no economic disruptions’.
Beijing’s bid for history
Of Beijing 2022, meanwhile, the IOC suggested that the bid’s commercial revenue prediction of US$740 million appeared to be ‘significantly understated’, based on the US$1.2 billion generated from the Beijing 2008 domestic sponsorship programme. The IOC added: ‘The value attributed to Tier 1 sponsorships [US$400 million] does not reflect the value of the brand or the scale and strength of the Chinese economy. The Evaluation Commission would encourage the OCOG [local organising committee] to maximise sponsorship opportunities if Beijing is elected’.
The Commission report also indicated that care would need to be taken to avoid any overlap in sponsorship categories with existing IOC partners, based on a generic list of sponsorship categories suggested in the Beijing 2022 candidature file. When it hosted the summer Games in 2008, Beijing secured 11 top level domestic sponsors, including Adidas, Bank of China, China Netcom, Sinopec, China Mobile, Volkswagen and Air China.
Whichever way Friday’s vote goes, the 2022 Olympics will be the third in succession to take place in Asia, following PyeongChang 2018 and Tokyo 2020.
As O’Hara Lynch notes: “Both Beijing and Almaty are quality cities that can and will deliver a successful 2022 Olympic Winter Games. What will make a difference is the athletes’ pursuit of their dreams and their representation of all of us.”