P&G becomes global Olympic sponsor

Updated: July 28, 2010, 6:19 PM ET
Associated Press

LONDON -- Procter & Gamble, the U.S.-based consumer products giant, signed on Wednesday as a global Olympic sponsor through 2020 in the second, 10-year, multimillion-dollar marketing deal this month for the International Olympic Committee.

P&G becomes the 11th worldwide sponsor of the 2012 London Olympics, matching the number from the 2008 Beijing Games and giving the IOC another financial boost in a tough economic climate.

Financial terms weren't disclosed, but the deal is believed to be worth between $150 million and $200 million during a decade that includes three Summer Olympics and two Winter Games. In addition to London, the contract covers the 2014 Winter Games in Sochi, Russia; the 2016 Summer Olympics in Rio de Janeiro; and the 2018 Winter Games and 2020 Summer Olympics.

The P&G sponsorship -- first reported by The Associated Press last week -- comes just two weeks after Dow Chemical was confirmed as an IOC sponsor, also through 2020.

"This is a sign of confidence of the corporate world and the values of the Olympic Games," IOC president Jacques Rogge said in an interview with the AP on Wednesday. "I think that's the most important message for us. It's even more important than just pure revenue. This also says that companies are getting out of the doldrums and they are now in calmer waters. I'm very glad about this."

Other global sponsors for the London Games are Coca-Cola, Acer, Atos Origin, GE, McDonald's, Omega, Panasonic, Samsung and Visa.

Atos Origin, Panasonic and Samsung are signed up through 2016. Coca-Cola, Omega and Visa are signed through 2020.

The new deal pushes the IOC closer to its goal of breaking the $1 billion mark in sponsorship revenue for the four-year cycle covering the 2010 Vancouver Winter Games and London Olympics.

IOC marketing commission chairman Gerhard Heiberg said the committee remains "some millions" short of $1 billion but is in negotiations with a potential 12th sponsor for London.

"We are very close," Heiberg told the AP. "Whether we get there or not, I don't know, but we hope so."

The P&G deal means six of the IOC's 11 multinational sponsors are based in the U.S., reflecting the importance of the American market to the Olympic movement.

"We are not seeing Procter & Gamble as being solely a U.S. company," Rogge said. "It is a global company."

The new global sponsorships are expected to help solve some of the long-standing financial issues between the U.S. Olympic Committee and IOC. The sides are trying to reach agreement on how much the USOC should pay toward the administrative costs of putting on the Olympics.

Adding new sponsors puts more money into the pot and makes it easier for the USOC to contribute to the Games' costs.

USOC chief executive Scott Blackmun said the P&G deal doesn't create significant new revenue because the company was already a USOC sponsor, but the recent Dow deal "gives us a little more flexibility."

"I think we're getting closer, and I'm very hopeful that in the near future we'll be in a position to say we've reached an accommodation in the short-term so that we can focus on other things," Blackmun said.

The IOC and the USOC are to begin negotiations in 2013 on a new revenue-sharing formula to go into effect in 2020. The USOC gets a 20 percent share of global sponsorship revenue and a 12.75 percent share of U.S. broadcast rights deals. Many international officials believe it's too big a portion.

Cincinnati-based P&G -- whose global brands include Pampers, Tide detergent, Gillette shavers, Crest toothpaste and Pantene shampoo -- also announced an extension of its Team USA sponsorship through 2020. The company was a U.S. Olympic sponsor for the Vancouver Games and already was committed to sponsoring the team in London.

Kirk Perry, the company's vice president for North America, said P&G is donating $50,000 for U.S. athlete training and is considering plans to host a team "family home" in London, as it did in Vancouver.

Marc Pritchard, P&G's global marketing and brand building officer, said the Vancouver program boosted the company's profile and led to $100 million in incremental sales.

"It became obvious the next step was to expand to other markets around the world," he said.

As part of the IOC deal, the company's brands also will sponsor individual national teams and athletes.


Copyright 2010 by The Associated Press

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