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Firms fail to cash in on Olympic golds
By Jia Hepeng (China Daily)
Updated: 2004-09-12 08:12

With 32 gold, 17 silver and 14 bronze medals, China achieved a historic victory at the Athens Olympic Games that ended on August 29.

But outside the Olympic venues, Chinese enterprises are being lagged behind by their foreign counterparts in exploring the business opportunities to be gained from these gold medals.

"Many domestic enterprises' sponsorship of the Olympic medal winners is short-term, and lacks systematic promotion and advertising support. As a result, people remember the name of the athletes, but not the sponsors," Li Xianguo, a professor of marketing at Renmin University of China, said.

Last week, the last group of Chinese champions returned to Beijing. They not only received flowers and praise, but also huge cash prizes.

The General Administration of Sports has promised to award gold medal winners 200,000 yuan (US$24,154), silver medal winners 120,000 yuan (US$14,492) while the bronze medalists get 80,000 yuan (US$9,661). The money, according to related regulations, will be tax free.

Provincial and municipal governments of the athletes' hometowns will also give them huge award.

Shanghai, Fujian and Shaanxi will each award gold medallists 500,000 yuan (US$60,386), with South China's Guangdong Province giving 250,000 yuan (US$30,193) and East China's Jiangsu Province handing out 200,000 yuan (US$14,492).

In addition, the Henry Fok Foundation, formed by Hong Kong Tycoon Henry Fok, will award each gold medalist US$80,000.

For the champions, however, a sustainable income mainly comes from enterprise sponsorship as well as becoming their advertising stars.

For example, Guo Jingjing, gold medal winner in the women's synchronized and single three-metre springboard diving competitions at the Athens Olympic Games, received a luxury villa in the suburbs of her hometown city, Hebei Province's Shijiazhuang.

Zhu Qi'nan, men's shooting champion, was awarded a 300,000 yuan (US$36,000) prize by his fellow entrepreneurs.

Insiders reveal that negotiations on their promotion of enterprises started even before the Olympic champions returned from Athens.

But in terms of enterprises' images, there has been no major benefit for most corporate sponsors, Li said.

"Can you tell the name of any of these sponsors??

He added that corporate sponsorship is not charity. Entrepreneurs must consider how to better promote their own products when they sponsor athletes.

Compared with foreign firms, domestic firms' sponsorship is unsystematic and short-term. They focus more on advertising, but most have not worked out a series of sports marketing strategies, Li said.

After the Athens Olympic Games, no major international firms have been reported to offer any sponsorship to Chinese Olympic champions.

"This is because many international firms good at sports marketing have signed long-term co-operation contracts with promising Chinese athletes before the Athens Games," Li said.

Tian Liang, a gold medal winner of men's synchronized 10-metre platform diving at Athens, and Guo Jingjing, for example, signed advertising and branding contracts with Coca-Cola long before the Games. Tian has also been the brand spokesman for Amway's health food products.

Li said that after Chinese champions become national heroes at the Olympics, domestic firms find it very difficult to compete with foreign giants to obtain the right to hiring them to promote their products because of their weaker financial strengths.

However, he recommended that local firms could take advantage of their familiarity with the local market and the potential of athletes to sign long-term co-operation contracts with them.

"Before Sun Tiantian and Li Ting won the women's tennis championship, who would think of sponsoring these two unknown Chinese athletes? But if some wise Chinese entrepreneurs signed a long-term sponsorship agreement with them, the enterprises could certainly get a great deal of publicity at a very low cost," Li said.

Zhang Zhiyong, chief operation officer of Li-Ning Sports Goods Co Ltd, admitted that the company has lagged behind international firms in Olympic-related promotions.

"Unlike firms such as Samsung, we do not have enough capital and very concrete plans in sports promotion," Zhang said.

The company was launched by the world gymnastic champion Li Ning, and Chinese gymnasts have long featured in its ads.

According to Zhang, Chinese enterprises' poor sports promotion is not only because of their weaker financial capability, but also because China's sports industry is generally immature.

Bao Mingxiao, a senior researcher with the Institute of Physical Science under the General Administration of Sports, said that Chinese sports agents have lost most chances to serve gold medal winners.

"Being increasingly aware of the market potential of their medals and the benefits it brings, many Chinese champions have selected sports agents to promote themselves. Most of these agents are foreign firms or having an international background," Bao said.

He said that international sports agents can better represent the interests of the athletes and can keep close links with international firms so that domestic enterprises might find it very difficult to sign up Chinese champions.

Yang Jun, a senior official with Beijing Century Hero Sports Agent Co Ltd, said that current dominance of foreign agents in the sport industry is only temporary. With China becoming stronger and stronger, more domestic firms will emerge to challenge foreign dominance.



 
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