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3/6/2003

Sponsors wary of USOC turmoil

By Jon Sarche
The Associated Press

DENVER — Corporate sponsors that give about $50 million annually to the U.S. Olympic Committee are keeping a close eye on its disarray.

While few will comment publicly, many sponsors have expressed concern in private conversations with USOC officials.

“We’ve made clear with them that we want them to get their house in order,” Xerox spokesman Carl Langsenkamp said. “The Olympic focus needs to be on the athletes, and it shouldn’t be on issues affecting the USOC.”

Sponsorships are the USOC’s No. 1 source of funding in non-Olympic years, and they rank second to TV rights fees when there are Olympics.

They account for roughly 40 percent of the USOC’s budget.

And with many sponsorship contracts set to expire after the 2004 Athens Games, now is not the best time for turmoil.

“If we don’t get this settled down, I think there’s going to be a decrease in corporate sponsors,” Colorado Sen. Ben Nighthorse Campbell, a 1964 Olympian in judo, told a gathering at USOC headquarters last week.

“And you’re all going to get hurt.”

Since the spiraling scandal started with a conflict-of-interest investigation of CEO Lloyd Ward late last year, eight USOC officials have resigned. The departed include Ward, president Marty Mankamyer and ethics compliance officer Pat Rodgers. COO Fred Wohlschlaeger stepped down Monday night.

The USOC has formed a task force that is to report reform recommendations to the full board during an April meeting. Campbell is one of three U.S. senators who appointed an independent commission to recommend changes by the end of June.

John Hancock Financial Services chief executive David D’Alessandro, who testified to Congress about the USOC, has said that he may activate a morals clause to negate his sponsorship contract, worth about $10 million a year.

In a letter to USOC officials this year, he wrote, “It is no longer possible to overlook the seemingly nonstop turmoil and controversy that afflict your organization.”

The USOC does have at least one reason to take heart, though, according to Helen Jefferson Lenskyj, a sports sociology professor at the University of Toronto: Corporate officials love being able to use the five-ring Olympics logo in marketing.

“It’s probably the most recognized logo in the world, so they wouldn’t want to forfeit their right to the dance,” Lenskyj said.

In the four-year period ending Dec. 31, 2000, corporate sponsorships brought in about $173.7 million, a little less than 40 percent of the USOC’s total quadrennial budget.

The value of sponsorships was about $52 million in 2001 — the last year for which figures are available — including an unidentified portion from value-in-kind sponsorships, in which goods or services are provided rather than cash.

At the height of the Salt Lake City bribery scandal, one sponsor, Blue Cross Blue Shield, commissioned polls that showed people were more concerned with the use of performance-enhancing drugs than scandals. The polls also showed a majority of respondents believed that sponsors have a positive effect on the Olympics, and 77 percent said they felt more positive about companies that paid to be Olympic sponsors.

“Certainly these types of issues do come and they go,” Blue Cross Blue Shield spokeswoman Iris Shaffer said. “And both the media and the American public have a short attention span.”