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WELCOME TO CALGARY INC.

Feb. 29, 1988
Feb. 29, 1988

Table of Contents
Feb. 29, 1988

The Winter Olympics

WELCOME TO CALGARY INC.

U.S. corporations have made the most of the Olympics, and why not? They paid for them

All right, people, stay in your groups. All you in the red and white 3M ski jackets, you're meeting over at the rumaki sculpture. You folks with the Merrill Lynch boxed lunches and thermos bottles, gather near the p‚Äö√†√∂¬¨¢tè shaped like Eddie (the Eagle) Edwards. And all you people in the red, white and blue ABC jackets with the matching pants, ski gloves, boots and cowboy hats, meet over by the cocktail lounge. You are probably going to lose a minimum of $40 million on these Winter Owe-lympics, so better make 'em stiff.

This is an article from the Feb. 29, 1988 issue Original Layout

Let's face it, corporate America. You pretty much paid for these Olympics, so you might as well enjoy them. You have had private rodeos, dances and concerts. You have booked entire restaurants and hotels. You have hospitality suites and tents in so many places that you are never more than a long luge run away from a stuffed mushroom. Merrill Lynch, for instance, had 18 chefs flown in from New York and fleets of buses to drive its guests just about anywhere they wanted to go. It even scheduled a twice-daily shuttle to the liquor store.

In fact, Corporate Team USA, you haven't missed a trick on your way to having an Olympic-sized hoot here in Calgary. You got the local organizing committee, Olympiques Calgary Olympics, to set aside some of the best tickets and hotel rooms for you months ago. O.K., so you didn't use all your tickets, but who's counting? Except, perhaps, those citizens of Calgary who got shut out of the premier events.

Nine of you forked over a total of $110 million for the right to put the Calgary snowflake and the Olympic rings next to your name, while ABC kicked in $309 million for the American TV rights, and everybody else contributed $69 million. So even if members of the IOC sleep with pictures of Sonja Henie under their pillows and dream of the purity of it all, the truth is, corporate cash—especially American corporate cash—owns these Olympics. Without it, the Games would be six guys taking turns on a Flexible Flyer in Peggy Fleming's backyard, and OCO wouldn't be projecting a surplus of $25 million.

In fact, if the folks at ABC could tear themselves away from the mesquite-grilled quail in peanut sauce for a moment, they would quickly learn that their network contributed 95% of OCO's TV revenues. They must have gotten caught in a chinook or something. The European TV rights cost only $5.7 million, while Canada paid $4.5 million and the Soviet Union $2.5 million. To top it off, a portion of the TV revenues is being divided among the nations that sent teams to Calgary. That means Roone Arledge et al. may have helped pay for, among other things, Katarina Witt's latest figure skating costume. If that's true, Roone, some of the guys in the band would like to thank you.

You don't have to look very far in Calgary for signs of the corporate takeover. Almost nothing has gone unsponsored. IBM donated the computers, and 3M came up with a new drag-reduction tape to make the U.S. luges run faster (page 62). Meanwhile, Federal Express figured out a way to cash in on the awards ceremonies. Every night after the medals are given out in the Olympic Plaza, the corporation puts on a fireworks, video and laser show that would make Wayne Newton blush. It has been a big hit, drawing a crowd of 50,000 people one evening. Armand Schneider, a spokesman for Federal Express, wouldn't reveal how much the show is costing but admitted it was "several millions, at least."

Kodak provided the film for the Games and an extravagant balloon show to capture on it. O.K., O.K., so one of the balloons is a gigantic replica of a roll of Kodak film; it's art, ain't it? Matsushita (the parent company of Panasonic) pitched in the video cameras, Motorola the walkie-talkies and Safeway the meat and dairy products. Mattel gave us the official Skating Star Barbie doll, Faucher Donmar the official Olympic noisemaker, Best Foods the official spoonable dressing, and Visa the official way to buy any or all of the above. Even this magazine got in on the act. Not only did SPORTS ILLUSTRATED put out the official bilingual Olympic program, but it also booked 200 rooms in the Banff Springs Hotel, entertained more than 1,500 guests and went through over 11,000 tickets.

While we're at it, let's raise a forkful of spring-fed coho salmon in chrysanthemum sauce to the good people at CocaCola, who have had their hands in everything. They sponsored a "world chorus" of 42 singers from 23 nations to sing the Coke-commissioned "signature" Olympic song at the opening ceremonies, which was, of course, immediately followed on American TV by their "Thirst for Greatness" commercial. Coke also set some kind of record by spending $320,000 on a tent, which it cosponsored with Safeway, Northern Telecom and the city of Calgary. Actually, the tent is the hot spot of the Games: a giant pin-trading bazaar in downtown Calgary, where people go to get out of the cold and haggle over whether three Jamaica bobsled pins are worth two Xeroxes and a Hidy. Some people, it turned out, needed to be inside to make their transactions, especially one man who traded a Calgary Herald pin for a woman's bra.

So the tent is red and white and flanked by four eight-foot plywood replicas of Coke cans. And inside you can find the Coke "pin-guin" wandering around and 10 TV monitors regularly showing Coke commercials. Coke deserves a little name recognition for $320,000, doesn't it?

The important thing about all this—and the reason Olympic sponsorship has become such a chic marketing trend—is that it works. The Games will finish in the black, and all the corporations involved are lapping up the exposure. "I'm sure Pepsi wishes it were here," says Coke spokesman Randy Donaldson.

If some people aren't thrilled with the greening of the Olympics, ABC hospitality coordinator Mark Roth points out that it wasn't the sponsors that put the Games up for sale. "Don't blame the people who are buying," says Roth. "Blame the seller. It's not our fault that it's not a people-of-Calgary event."

Some are blaming the sponsors anyway. At one time the local citizenry was outraged because OCO had reportedly set aside 50% of the tickets to the best events for insiders: IOC members, government bigwigs, Olympic dignitaries and, of course, corporate sponsors. But 16 months ago OCO reapportioned some tickets, and according to David Shanks, the organization's manager of corporate relations, the "insider" ticket count now is 23%. Still, even that is too high, because many sold-out events have had plenty of empty seats. At the first night of pairs figure skating, for instance, the stands in the VIP section looked emptier than those at a typical USFL game. When an ABC hostess herding clients onto a bus for the U.S.-U.S.S.R. hockey game was asked how many tickets had gone unused, she replied, "Too many."

Nobody is quite sure who's to blame for all the empty seats. Shanks suspects that the IOC is probably the main culprit. According to the Calgary Herald, the IOC, along with the sports federations and the national Olympic committees, was given about 900 seats at the Saddledome, 300 at the Corral, 200 at the speed skating oval and 200 at Max Bell Arena. But Renèe Smith, an OCO spokeswoman, says the empty seats are primarily the corporations' fault. "If an envelope with a bunch of tickets sits on a CEO's desk during an event, there's nothing we can do about it," she says. "If they're sold, they're sold."

To alleviate the problem, OCO decided to resell seats at some events, with the proviso that the second buyer would have to move to another seat if the original ticket holder showed up. Not a bad financial strategy, eh, you CEOs? One seat, twice sold.

So what about 1992, when the Games move to Albertville, France? Shanks says Albertville may have to spend as much as $1.4 billion on its extravaganza—almost twice what Calgary shelled out, if you include the cost of renovating facilities. Yet an American network will not likely pay as much for the Albertville TV rights as ABC did this year. Indeed, one ABC spokesman estimates that they could go for "as low as $200 million" and even lower if the Communist countries keep playing their heavy-medal music in Calgary. How many times can viewers in Peoria stand to hear the East German national anthem?

Further, a live Olympics in France means a taped Olympics in the States, and that's not going to make too many American advertisers happy. So where is Albertville going to find the money? Some of it, no doubt, will come from government subsidies, but the rest...you guessed it.

IOC president Juan Antonio Samaranch once said the Olympics are not commercial because advertising banners are banned from the venues. Never mind that the Russian team wears the Mizuno logo on its warmups, that during interviews skiers hold their skis so the trademark faces the camera and that after being awarded his gold medal, figure skater Brian Boitano stepped down from the platform, turned to a special camera and said, "I'm going to Disney World." All of this makes Samaranch look like a man standing in a swimming pool boasting that his hat is not wet.

Jim Peterson, manager of OCO's supplier program, puts it bluntly: "The Games could not be staged effectively, if at all, without sponsors and suppliers." Anybody who disagrees has his official Olympic headband on too low. Remember Montreal and its $1 billion debt? Let's face it. The Olympics were sinking until Peter Ueberroth reinvented them in Los Angeles with a bunch of marketing guys in $900 suits.

Of course, some of you might disagree. You might think that these Games have already stepped over the line between "support" and "vulgarity," and that the best thing to do with them is simply flush them down the toilet. Which is fine. But if you do, would it be too much to ask you to use Waste Management, Inc., of Oak Brook, Ill.? It's the official waste management service of the Olympics.

SEVEN PHOTOSRICHARD MACKSONCalgary was overrun with legions of corporate guests nattily attired in their host's uniform.PHOTOCHRIS THOMAS[See caption above.]PHOTOCHRIS THOMASCoca-Cola's logo appeared everywhere—on buses, signs and its popular pin-trading tent.THREE PHOTOSCHRIS THOMASAmerican Express was there, despite Visa's TV ad suggesting the contrary; Merrill Lynch did lunch; Team Petroleum kept the Games oiled.THREE PHOTOSCHRIS THOMASKodak donated film, Xerox provided copiers, and 3M tried to give U.S. lugers an extra edge.THREE ILLUSTRATIONS