On thin ice: Olympic sponsorships

Canadian Olympians scramble for sponsorship.

Catriona Le May Doan was the undisputed queen of Canada's Olympic team in 1998. The powerful speed skater from Saskatoon won 500-metre gold and 1,000-metre bronze in Nagano, Japan, and was picked to carry the flag into the closing ceremonies. Le May Doan was also a sponsor's dream–or so everyone said. In addition to athletic excellence and international acclaim, she had an engaging personality and telegenic smile, and she had staying power–she had already declared her intention to compete at least through the next Olympics in 2002. After a decade of training and competing and living on a shoestring, the then 27-year-old Le May Doan appeared on the verge of a windfall.

So much for appearances. Immediately after the 1998 Games, Le May Doan wasn't signed by a single new sponsor. She and her husband, rodeo rider Bart Doan, continued to live in a cramped condo not far from the Olympic Oval training complex in Calgary, and finances were tighter than ever. In the 18 months or so prior to the 2002 Games, when it was clear she would again be the 500-metre favourite–and a practically risk-free investment for sponsors–she did land some off-ice contracts with companies such as Bell Canada, AMJ Campbell and Warner's. And they became even more valuable when she had won gold again: sources say performance clauses boosted their worth to more than $1 million over the life of the deals. Good thing Le May Doan was patient–and realistic. In 1998, she says, “Everyone else assumed I was going to strike it rich, but I really didn't expect much after Nagano.”

A lot of fresh-faced athletes are appearing these days on TV commercials, billboards and cereal boxes. Michelle Kelly careers headfirst down a skeleton track for RBC Financial Group; freestyle aerialist Deidra Dionne and figure skater Jeff Buttle cheer for Team Visa. That's because Canadian companies spend tens of millions on Olympic sponsorships, broadcast rights and advertising in the weeks leading up to and during the Games. So, to the casual observer, it looks as though team members are currently enjoying a bonanza.

But the reality is almost completely the opposite. Other than in men's hockey and, to a lesser extent, figure skating and alpine skiing–winter sports that get some between-Games coverage–Le May Doan's experience is classic Olympian economics. Biathlete Myriam Bédard (Lillehammer in 1994) and gymnast Kyle Shewfelt (Athens in 2004) encountered a similarly muted response when they returned home from gold-medal-winning performances.

There are exceptions when athletes become part of news stories that transcend sport (figure skaters Jamie Salé and David Pelletier in the 2002 judging scandal) or achieve notoriety (snowboard gold medallist Ross Rebagliati tested positive for marijuana in 1998). Otherwise, says Nathalie Cook, director of sponsorship for Special Olympics Canada, “the time to get the deals done is before the Games.” Cook used to work as an agent and handled many of Rebagliati's post-Nagano deals. She adds: “Ross made money afterward because he was on the front page of newspapers all over the world.”

Experts estimate that less than 5% of the millions spent on Olympic marketing in Canada actually goes directly to individual competitors. And the current climate is so bleak that the Canadian office of the International Management Group in Toronto, which used to represent the country's most star-studded roster of Olympians, has freed its clients to negotiate their own deals, in part because the dollar amounts are so small that there would be too little left for athletes if IMG took its cut.

Why are Olympians such a hard sell? For one thing, some companies are holding back on 2006 and on Beijing in 2008, waiting to see how best to leverage the great prize ahead: the home Winter Games in 2010. Instead of building ad programs around current stars, the thinking goes, it's better to invest in emerging talents whose performance in Turin signals greatness in Vancouver-Whistler. Some agents estimate that there's 50% less money available to this year's star performers than in past Olympic years. “There's a wait-and-see factor that's affecting all the athletes going to Turin,” says agent Elliott Kerr, president of Mississauga, Ont.-based Landmark Sport Group Inc., which represents medal favourites such as cross-country skier Beckie Scott and speed skaters Clara Hughes and Cindy Klassen. “And it's going to be even worse for the athletes going to Beijing in 2008.”

That said, it's tough any year. Most athletes fade into obscurity between Games. Their competitions aren't televised, and their results, if they're reported at all, are buried at the back of sports sections. That grates on Dave Bedford, executive director of revenue generation for the Canadian Olympic Committee. A former IMG executive, Bedford was chef de mission for the Canadian team in Athens, and knows both the character and quality of the people who compete. He thinks there's at least one quick fix that would help them become more attractive to sponsors: “It would involve the media giving a crap for more than just the 17 days that the Games are on.” The media response is that it's a fan problem. If a significant audience were clamouring for more luge and Greco-Roman wrestling coverage, media outlets would send reporters.

The greater difficulty facing athletes and their agents, however, is finding companies that see value in ongoing associations with athletes in non-Olympic years. “These people are perfect representatives for both the Maple Leaf and for a company–if you come up with the appropriate marketing plan,” says Dan Cimoroni, IMG's director of athlete representation. Corporations also worry that sponsored competitors might get injured, perform disastrously, or test positive. “If your company is putting up huge dollars,” says veteran sports marketing consultant Mike Gouinlock, the former CEO of Toronto's Gem Group, “you better choose your horses pretty well.”

As a hedge, General Motors Canada, which has sponsored Hockey Canada and Alpine Canada for decades, prefers to support athletes indirectly by underwriting their sport federations. GM does have some arrangements with athletes to add profile to grassroots initiatives–women's hockey stalwart Cassie Campbell, for instance, represents the Chevrolet Safe & Fun Hockey program for kids. Otherwise, says Stew Low, GM's director of communications, “we've always gravitated to the team approach rather than to individual athletes.”

Sponsors have trouble evaluating the return on their athlete deals because the value is not always in dollars. Le May Doan says intangibles are what make the deals worth every penny. “When a company gets behind an athlete for four years, that's a pretty exciting journey for the company and its employees,” she explains. “Sports don't just bring the whole country together. It works for companies, too.”

It's not as if Canadian Olympians don't benefit from significant corporate support. As in the GM example, sport sponsorships help federations pay for training, travel, coaching and medical expenses for all team members. The COC, meanwhile, raked in more than $41 million in the four-year cycle ending in 2004 by selling marketing rights to companies such as Bell Canada, Petro-Canada and RBC Financial Group. During the same period, it allotted 48% of those revenues–or about $20 million–to direct athlete funding. As well, top winter-sport athletes can now draw on funds available through the Own the Podium initiative, a new COC program designed to help Canadian athletes going to the 2010 Games.

And the biggest athlete benefactor, the federal government, has restored most of the funding it cut back in the 1990s. Elite amateurs now receive $1,500 (tax free) a month, up from $1,100 in 2004 and $810 in 1998. For some, it will mean having to work fewer hours at part-time jobs. “Compared to even a few years ago, there have definitely been huge changes for the better,” says Clara Hughes, the only Canadian ever to have won medals in both Summer (cycling in 1996) and Winter (speed skating in 2002) Games.

The good news is that the Vancouver-Whistler Olympics will shine the spotlight on Canadian teams like never before. Kerr describes the current climate as “the calm before the storm,” which could bring on the windfall outsiders assumed was already taking place. That doesn't do much for the current team members, but now, so close to the Games, it's unlikely they're thinking about that. “I didn't have any expectations after Nagano,” says Le May Doan, who will work as an analyst on the CBC's coverage of the Turin Games, “because that's not why I got into sports in the first place.” For Canadian fans, it's a good thing that competing for the love of sport isn't completely dead.