2012 London Olympics: International Olympic Committee Doubles Down on Sponsorship Exclusivity Rules; Social Media Softens Blow of Rule 40 Impact

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LONDON, England, August 8. AFTER much protest from Olympians looking to cash in on their popularity during the Olympics with a whole variety of potential sponsorship deals, the International Olympic Committee has doubled down on its rules requiring sponsor exclusivity during the Olympics. This edict is part of Rule 40 of the Olympic Charter, which states that Olympians can only endorse publicly official Games sponsors.

“One of the pillars as regards to the funding of the Olympic Movement are the sponsors, both globally and locally,” IOC Director of Marketing Services Timo Lumme told Inside The Games. “At the end of the day we have to make sure their commercial rights are protected – but in a measured way. For the funding model to survive you need a level of exclusivity…and the athletes, in some way, are asked to respect that.”

Rule 40's implementation in terms of sponsorship exclusivity was enacted to counteract ambush marketing. This is the practice of advertising with a single part/person of an event, without paying the overall event endorsement dollars. This can lead to a much higher return on investment. While the IOC completely bans unofficial sponsor endorsement by any athletes during the period before and immediately following the Olympics, on pain of potential fines or disqualification, other organizations handle these types of issues differently.

The Ultimate Fighting Championships (UFC) has had similar issues with its pay per view and television broadcasts. The UFC assumes the entire financial risk for putting on its events, and has the same need to protect the exclusivity of the events for its sponsors. The UFC does, however, have a buy in clause for unofficial sponsors that wish to tap into the media market created by the UFC by sponsoring individual fighters. All sponsors can apply to be able to sponsor fighters on UFC telecasts, and pay a fee to the UFC for the right should the UFC approve the sponsor. Companies that have been denied in the past have been white supremacists groups, and direct competitors with official UFC sponsors.

Social media has definitely softened the blow for Olympians this year. Previously, athletes had a serious argument that they were denied the potential to capitalize on their athletic endeavors at the one time they were their most popular. Typically, the mainstream interest in Olympic athletes plummets shortly after competition concludes.

Social media, more specifically Twitter, has altered this dynamic. Now, Olympic athletes are able to capture an audience that will follow them after the bright lights of the Olympics are turned off. Currently, Michael Phelps has 1.2 million followers on Twitter — the first swimmer to break a million. Ryan Lochte is nearing that mark with 885k followers. Phelps' tally is so much closer to the big numbers that some of the top Twitter members have now than he had just heading into the 2012 London Olympics.

For instance, UFC's Dana White — one of the most prolific marketers and early adopters of Twitter, has 2.1 million followers. He wields these numbers to great effect as a built-in audience of passionate supporters of the UFC brand. Phelps, Lochte, and other Olympic athletes who have added tens of thousands of new Twitter followers, primarily because of their exposure during what has been called the “Social Olympics,” will wield a much stronger tool when vying for more sponsor dollars. Even someone like Missy Franklin, who has so far declined turning professional to remain NCAA eligible, could make an immediate move in the professional world should she make the choice with a built-in following of more than 300k people already on Twitter.

Full Inside The Games article.

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