BMW and Volkswagen


BMW has signed a deal with the U.S. Olympic Committee, making the German car manufacturer the first foreign automobile partner in the history of the U.S. Olympic team.

The deal gives BMW rights to use Team USA marks through the 2016 Rio Games. Sources valued the deal at $24 million in cash — not value-in-kind — over six years, making it one of the organization’s most significant domestic partnerships along with Procter & Gamble, AT&T and Budweiser.

Sources familiar with the agreement said the deal doesn’t include a media commitment with Olympic broadcast partner NBC or any media obligations.

The USOC declined to comment. An announcement is expected in the near future.

BMW is a sponsor of the 2012 London Games, and adding a partnership with the USOC ahead of those Olympics gives the company the opportunity to extend its marketing and advertising campaign into the U.S. market. It will be able to feature U.S. athletes and Team USA marks in its marketing and advertising campaigns.

The intent of the deal mirrors the one that led BP, another foreign company and London 2012 sponsor, to cut a partnership with the USOC prior to the Vancouver Games.

BMW wants to overtake Lexus as the No. 1 luxury car in the U.S. by 2012. The company delivered 242,000 vehicles in the U.S. last year. Lexus sales totaled 290,000, and Mercedes sales totaled 226,000 during the same period.

The agreement with BMW is a major change for the USOC. The organization historically steered clear of partnerships with foreign auto manufacturers.

GM was its last auto partner. The Detroit manufacturer cut a landmark $1 billion, 10-year agreement with the USOC in 1997 that included $5 million in annual payments to the USOC and $100 million in media spending on NBC every Olympics. But GM exited the deal in 2007 because of pressures in the auto industry.

With U.S. auto manufacturers still on the ropes, USOC chief marketer Lisa Baird looked abroad for a partner in the category. She contacted executives at the London Olympic Organizing Committee, and they assisted her in arranging a meeting with BMW at USA House during the Vancouver Olympics. She closed the deal in May.

The deal is the fourth Baird has finalized since joining the USOC as chief marketing officer in early 2009. She also closed agreements with P&G, BP and Deloitte.

Sources familiar with the USOC’s finances said the BMW agreement also means the USOC’s marketing department will meet its revenue projections for the 2009-12 quadrennium, a significant accomplishment considering the organization failed to renew previous partnerships with GM, The Home Depot and Bank of America.

The IOC also has been pursuing a partner in the auto category and has spoken to both BMW and Volkswagen, a Sochi 2014 sponsor, about a worldwide deal. The IOC blessed the USOC’s pursuit of BMW and the USOC’s deal with BMW doesn’t preclude the IOC from cutting an auto deal, but it does make it more difficult.

The IOC’s TOP deals typically include worldwide marketing rights to a Winter and Summer Games as well as rights with all 202 national Olympic committees. The IOC, though, was considering cutting a nontraditional TOP deal with Volkswagen or BMW that would include just one Olympics and rights with a majority of the national Olympic committees, including the U.S.

Now a deal with Volkswagen would exclude rights to both the London Games and the U.S. market. An agreement with BMW, on the other hand, would be easier to negotiate because it would exclude only the Sochi Games.

The IOC hasn’t decided if it will sign an auto partner to a deal that doesn’t include traditional TOP rights. The prospect of doing so is expected to be discussed by IOC members at an executive board meeting in June.

No comments:

Post a Comment

Thank to your comment