Biotech Snake Oil: A Quack Cure for Hunger
Nuclear's Power Play: Give Us Subsidies or Give Us Death
Conservation Corp.: Enviros Ally with Big Grain Traders
The Concession Trap: Auto Worker Givebacks and Labor's Future
The Commercial Games: Selling Off the Olympic Ideal
Bad Samaritans: How Rich Country "Help" Hurts the Developing World
Unhealthy Solutions: Private Insurance, High Costs and the Denial of Care
Arts, Inc.: The Corporate Control of Culture
The Commercial Games: Selling Off the Olympic Ideal
Sponsored by Visa, brought to you by GE and made possible, in part, by Coca-Cola, the Beijing 2008 Olympic Games floated in a sea of corporate sponsorships. The Olympic Games have long been a valuable marketing venue for multinational companies, but commercialism around the Beijing 2008 Olympics reached a whole new level as virtually every facet of the Games was auctioned off to the highest bidder.
The Beijing Olympics featured an “official noodles sponsor,” an “official leather goods supplier” and an “air humidifier and purifier exclusive supplier,” along with dozens of other official sponsorship arrangements from prominent and obscure companies alike.
Corporate sponsors showered millions of dollars on each tier of the Olympic organizational committees: from the International Olympic Committee, the Beijing Organizing Committee of the Olympic Games and the international federations governing each individual sport, to each country’s National Olympic Committees. Corporations sponsor many Olympic teams and national governing bodies for particular sports — including virtually every national governing body in the United States — and individual athletes themselves.
Corporate sponsors raced to sign up for Olympic partnerships because of the unique opportunity to access China’s enormous and growing market of middle-class consumers. Companies from Adidas to McDonald’s initiated a marketing blitz around the first Olympics ever to be hosted by a Chinese city.
Official Olympic bodies eagerly exploited the opportunity. The 2008 Olympic Marketing Plan Overview of the Beijing Organizing Committee of the Olympic Games (BOCOG) announced, “For international entities looking to expand into the thriving Chinese marketplace, a partnership with the 2008 Olympic Games will deliver a powerful business opportunity for growth and product/service showcasing, while serving to strengthen and build ties of friendship throughout China.” A record 63 companies became sponsors or partners of the Beijing Olympics, and Olympic-related advertising in China alone reached an estimated $4 billion to $6 billion, according to CSM, a Beijing marketing research firm.
“This year in particular, the commercialism is far more intense than previous Olympics,” says sports commentator Dave Zirin. He calls the Olympics a “commercial, privatized, hyper-logoed atmosphere.”
“It is something that has certainly accelerated as part of the Olympic Games since 1984, which was the first privately funded Olympic Games. This year is like commercialization on steroids,” Zirin says.
The International Olympic Committee (IOC) and the United States Olympic Committee (USOC) did not respond to repeated requests for comment for this story.
Failing to Curb Commercialism
The IOC acknowledges that excessive commercialism threatens the integrity of the Games, as well as conflicts with the official ideology of “Olympism,” which venerates healthful living and celebrates a pure blend of sport, culture and education. The IOC bans sponsorships from tobacco or hard liquor companies, or “other products that may conflict with or be considered inappropriate to the mission of the IOC or to the spirit of Olympism.” The IOC prohibits billboards or advertising in Olympic stadiums or sports venues, and forbids NASCAR-style ads on athlete’s uniforms. Also prohibited is the use of images of Olympic events from being broadcast with any kind of commercial association.
However, corporate sponsors were adept at finding the loopholes and limitations in these restrictions. Although athletes and officials were barred from wearing ads, manufacturer logos were allowed on uniforms and equipment. Adidas capitalized on this loophole by providing sportswear for all staff, volunteers and technical officials of the 2008 Games — apparel that carried Adidas’ widely recognizable logo. Equipment used by athletes also prominently displayed manufacturer logos. Visa circumvented the ban on use of Olympic imagery with an ad campaign based around footage of past Olympic performances. And while distilled spirits sponsorships were banned, beer and wine marketing was not.
The pinnacle of Olympic marketing is The Olympic Partners (TOP) program, run and managed by the IOC since 1985. This year, the TOP program included 12 companies, which are granted exclusive global marketing rights, including partnerships with the IOC, all National Organizing Committees and their Olympic teams, and the BOCOG. The 12 TOP companies were Atos Origin, a European-based information technology company; Coca-Cola; GE; Johnson & Johnson; Kodak; Lenovo, a computer manufacturer and the only Chinese company to be a TOP partner; Manulife, a Toronto-based insurance company; McDonald’s; Omega; Panasonic; Samsung; and Visa.
From limited-edition Olympic-branded merchandise and Olympic-themed corporate social responsibility programs, to pavilion showcases in the Olympic Village, interactive online platforms and athlete blogs, each company worked to capture consumer attention and ensure its brand was associated with the ideals represented by the Olympic rings.
Companies paid the IOC approximately $70 million to become worldwide partners of the 2006 Turin and 2008 Beijing Olympics. The combined revenue from all 12 partners for the 2005-2008 cycle came to $866 million, according to the IOC. At least 25 percent of that revenue — about $216.5 million — went directly to the BOCOG.
Sponsoring the Olympics provides “unparalleled returns on an investment for sponsors,” boasts the IOC in its marketing media guide.
“The Olympic Games provide a global marketing platform, based on ideals and values, providing excellent opportunities for a company’s sales, showcasing, internal rewards and community outreach programs,” the IOC states. In addition to exclusive worldwide marketing rights, TOP partners are granted use of all Olympic logos and icons, preferential access to Olympic broadcasting advertising, on-site opportunities and protection against so-called ambush marketing (efforts by non-TOP companies to use the Olympics as a marketing venue).
The Chinese government lent its hand to limit ambush marketing. Beginning in July, it restricted advertising space in Beijing, giving priority to the official sponsors. In the past year, the government reportedly tore down more than 30,000 outdoor ads in Beijing in an attempt to clear the advertising terrain for official Olympic sponsors. Throughout the Olympic Green, the government even hung Olympic banners over signs, or put small pieces of tape over logos of companies that were not TOP sponsors.
The lower tiers of the Olympic bureaucracy are also laden with sponsorship money. Each individual sport is governed by an international federation, each country governed by a national Olympic committee, and each sports team run by a national governing body — with many receiving money and supplies from dozens of corporate partners.
Among the international federations, the International Equestrian Federation is sponsored by Alltech, HSBC, Rolex and Samsung. The International Modern Pentathlon Union is sponsored by Lufthansa, New Balance and Speedo, and the International Tennis Federation lists 13 sponsors, including Kia Motors, Sega and Wilson. The Badminton World Federation advertises its “Title Sponsor Benefits” on its website in an attempt to garner more sponsorship contracts.
At the national level, Canada’s National Olympic Committee boasts 42 sponsors and suppliers including 3M, General Mills, Hudson’s Bay Company and Air Canada. The Japanese Olympic Committee’s sponsors include Budweiser, Toyota and Yahoo! Japan, along with 19 others. The Olympic Council of Malaysia is sponsored by Air Asia, BHP Billiton and Nestle, among others.
In the United States, only two of the 30 individual governing bodies for summer Olympic sports report no sponsorships. The national governing body for triathletes has 60 sponsors and suppliers, but is still actively searching for other corporations to partner with. “Enhance your brand image by positioning yourself with one of the most intriguing, exciting, fastest growing sports in the world,” USA Triathlon posts on its website. “Many of our current partners view their relationship with USA Triathlon as a strong tool in their marketing platform. Aligning your product with a sports property as dynamic, driven and intense as triathlon brings a strong dimension to your brand.”
USA Gymnastics is sponsored by Adidas, AT&T, Chevron, CoverGirl, Tyson and Gillette’s Venus razor, among several others. U.S. Canoe & Kayak has AT&T, Nike and Time Warner Cable among its many sponsors.
Marketing in China
Any summer Olympics in 2008 would have generated an advertising spree, but the Beijing Games had a special attraction: the opportunity to appeal to the roughly 300 million middle-class Chinese consumers with significant disposable income. Companies worked hard to create commercials and advertisements with Chinese themes and sports metaphors that would appeal to these valuable Chinese consumers, as well as the growing faction of Chinese corporate consumers.
“Since announcing its Olympic Games partnership in 2005, GE has used the sponsorship to build brand awareness in China with key business audiences,” states GE’s fact sheet on its Olympic partnership. GE, a TOP partner, focused its advertising campaigns heavily on China and featured the now-iconic Bird’s Nest stadium, as well as other Olympic imagery.
Johnson & Johnson, another TOP participant, played up Chinese history and heritage in its campaign, transporting five Terracotta Warrior statues from the city of Xi’an in Shaanxi province to its showcase pavilion in the center of the Olympic Green. To build brand recognition among children, the company partnered with the BOCOG to initiate a Band-Aid Brand Olympic Education Campaign, which worked to teach Chinese students about the “values that define the Olympic Movement as well as health and wound care.” The program distributed 800,000 sets of posters to elementary and secondary schools across China.
Many companies, such as Adidas and Volkswagen, chose to partner only with the BOCOG rather than the IOC. These companies only had Olympic marketing rights in China, not worldwide, but were still able to take full advantage of their access to Chinese consumers.
Adidas saturated the Chinese market with advertising and plans to have 6,300 stores in China by the end of the year in an attempt to surpass Nike in market share. The sportswear company launched a marketing campaign intended to invoke Chinese nationalism with the slogan, “Together in 2008, Impossible is Nothing.” Advertising spots featured prominent Chinese athletes being assisted by average citizens to achieve greatness.
Amid the marketing mania, consumer advocates raised concerns about the ability of junk food and alcohol companies to associate their brands with the Olympics. McDonald’s and Coca-Cola are both TOP partners and deeply intertwined with official Olympic bodies. The companies heavily promoted their Olympic connection both in the United States and abroad. Budweiser was a BOCOG partner and advertised its Olympic ties in China and through television spots during Olympic events.
McDonald’s and Coca-Cola are also both sponsors of several U.S. national governing bodies, including the U.S. Soccer Federation, the U.S. Fencing Association, USA Softball and USA Basketball, whose sponsorships are vetted by the National Basketball Association (NBA). Only the NBA responded to requests for comment about associations with fast food and soda companies.
NBA Senior Manager of Marketing Communications Carmine Tiso says the NBA is “not at all” worried about being associated with companies selling unhealthy products, such as McDonald’s and Sprite (Coca-Cola). “McDonald’s and Coca-Cola both offer a variety of products that can be a part of a healthy diet when consumed in moderation and responsibly. By partnering with USA Basketball, both companies are promoting sports and exercise, not only among elite athletes but also among all of us who are inspired by the members of the team.”
Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest, rejects this line of reasoning. “While the Olympics provide a great opportunity to energize the country about physical fitness and sports, that shouldn’t be undermined by promoting unhealthy foods and obesity,” she says. Using sports to market junk food “creates a halo around the junk food in that it creates a more healthful image.”
McDonald’s television advertising campaign, for example, featured athletes training and expressing their “dream” of eating McDonald’s food — equating it with a gold medal. The association of the athletes’ toned physiques with McDonald’s presented the message that McDonald’s food is part of a healthful diet.
“China is such a big country that all of these companies are eager to get into that market,” Wootan says. “The health professionals in China should be very concerned about Americanizing the Chinese diet. As their traditional diet, with lots of fruits and vegetables and reasonable portion sizes, starts to shift to more fast food,” obesity rates are likely to worsen.
A May 2008 study by the Chinese National Task Force on Childhood Obesity found that one in five Chinese children under the age of seven was overweight, and 7 percent were obese. This is double the amount of obese children compared to just 10 years ago.
Meanwhile, beer companies were omnipresent at the Olympics. There were three beer company partners for the Beijing Olympic Committee: Anheuser-Busch, Tsingtao and Yanjing Beer. COFCO Wine & Spirits is a BOCOG supplier.
Anheuser-Busch says it is also the sponsor of two dozen other national Olympic committees, including those in Great Britain (Michelob Ultra), Japan (Budweiser) and the United States (Anheuser-Busch). The Japanese beer company Kirin is a sponsor of the Japanese Olympic Committee. Anheuser-Busch is also a sponsor of the soccer national governing body, the U.S. Soccer Federation, and Dry Creek Vineyard is a sponsor of U.S. Sailing. Tequila maker Jose Cuervo is a sponsor of the U.S. Soccer Federation, which apparently does not follow IOC guidelines concerning Olympic sponsors. The U.S. Soccer Federation did not respond to requests for comment.
“Associating alcohol and sports appeals to young people and sends the wrong message about drinking,” says George Hacker, director of the Alcohol Policies Project at the Center for Science in the Public Interest. “It’s an incongruous association given that alcohol has nothing to do with success in sports.”
“Sports are a fundamental building block of character building and of youth development in this country,” Hacker says. “It’s something that most young people engage in and associate with good health, and camaraderie, friendship, teamwork, all kinds of values that we try to develop among young people. Those values are essentially being high-jacked by beer companies when they get closely associated with sports, be they Olympic or college or even professional.”
Sweatsuits and Sweatshops
By virtue of their multifaceted sponsorships, the fact that they outfit the athletes, and their ability to place prominent logos on athletes’ uniforms and equipment, sportswear manufacturers were among the most prominent Olympic sponsors. Adidas was an official BOCOG partner and provided the official sportswear for all the staff, volunteers and technical officials of the Games, as well as uniforms for Team China.
While not an official Olympic sponsor, Nike capitalized on the Olympic atmosphere by launching what it termed “largest campaign in the brand’s history,” featuring some of China’s top athletes. The company launched new footwear for all 28 sports of the Olympics and is the sponsor of several U.S. governing bodies, including the U.S. Olympic Committee, USA Archery, USA Basketball, U.S. Canoe and Kayak, USA Cycling Inc, U.S. Soccer, USA Softball and USA Track and Field. Nike also provided footwear or apparel for 22 Chinese governing bodies and is a supplier for the World Taekwondo Federation. Speedo is the main sponsor of USA Swimming.
Virtually all leading sports apparel and equipment makers have been tied to sweatshops, notably among them Adidas, Nike and Speedo. The Play Fair Alliance, a coalition organized by the Netherlands-based Clean Clothes Campaign, the International Trade Union Confederation, and the International Textile, Garment and Leather Worker’s Federation, notes that while some sportswear companies have announced highly publicized initiatives to address these abuses, little has changed for the workers in the subcontractor factories that make shoes, clothes and equipment for these companies. “Despite more than 15 years of codes of conduct adopted by major sportswear brands, such as Adidas, Nike … and Reebok [owned by Adidas], workers making their products still face extreme pressure to meet production quotas, excessive, undocumented and unpaid overtime, verbal abuse, threats to health and safety related to the high quotas and exposure to toxic chemicals, and a failure to provide legally required health and other insurance programs,” wrote Play Fair 2008 in its report, “Clearing the Hurdles.”
The report documented “horrendous” working conditions in factories along the supply chains for Adidas, Nike and Speedo, among others. Throughout the sportswear industry, “Clearing the Hurdles” revealed poverty wages, excessively long hours of forced and underpaid overtime, exploitative terms of employment, sexual harassment, and physical and verbal abuse.
“Clearing the Hurdles” highlights Yue Yuen-owned factories in China as an example of rampant and ongoing labor rights abuses in subcontractor factories. Yue Yuen manufactures about 25 percent to 30 percent of Nike’s shoes and about 15 percent to 20 percent of all Adidas and Reebok shoes. Workers in Yue Yen factories in Dongguan, China reported working an average of 10 to 12 hours a day. They are under intense pressure from supervisors to meet production quotas, but are only paid RMB500-600 a month — equivalent to about $0.53 an hour — which is much less than the legal minimum. According to Play Fair, a worker making Adidas shoes in China would have had to work more than four months to buy a ticket to the Opening Ceremonies in Beijing.
Meanwhile, Yue Yuen’s profits grew from $95 million in 1992 to $387 million in 2007. Nike reported profits of more than $2 billion in 2007; Adidas tallied profits of more than $1 billion.
Campaigners have pressured Yue Yuen to raise wages, but after wages were raised in one factory, production quotas were then increased to 75 shoes an hour — a rate workers had difficulty maintaining. As a result, workers received fewer production bonuses and “their total take-home salary has not increased.”
There is little evidence of Olympic officialdom’s interest in these concerns or willingness to demand suppliers and partners manufacture in sweatshop-free conditions. The IOC refused to commit staff or resources to the issue, or to use its influence to clean up supplier manufacturing operations, according to Play Fair.
In the United States, the NBA’s formal position on Nike’s operations appears to endorse Nike’s existing practices. Nike, a sponsor of USA Basketball, is “firmly committed to improving working conditions in its contract factories around the world,” says NBA spokesperson Tiso. “To do so, Nike has instituted a comprehensive corporate responsibility program that respects the rights of all employees, provides a safe and healthy work place, and promotes the health and well-being of all its employees. A part of the program is Nike’s code of conduct, which provides an extensive set of guidelines for workplace conditions for all its contracted facilities. USA Basketball, as represented by the NBA, is committed to conducting its business in a socially responsible and ethical manner and maintains its own licensee and supplier code of conduct that requires licensees and their contractors to share this commitment.”
By contrast, the issue has not appeared on the radar of U.S. Canoe and Kayak, which is also sponsored by Nike. When asked if U.S. Canoe and Kayak had any comment or reaction to Nike’s reported affiliation with sweatshops, Media Relations Director Bill McMillan said, “I haven’t heard of that.”
No other U.S. teams responded to requests for comment.
More evidence of worker rights abuses in subcontractor factories comes from the New York-based National Labor Committee. In a November 2007 report, “Olympic Sweatshop: Speedo Production in China Breaks Records for Worker Abuse,” the National Labor Committee charges that sweatshop conditions prevail at Guangzhou Vanguard Water Sport Products Company Ltd in Guangzhou, China, a factory that produces swim gear and sporting goods for Speedo, its major client. The report says workers are forced to toil for 100 hours a week in unsafe conditions. “During the peak season, which can last up to nine months, the routine shift is 14 1/2 hours a day, from 8:30 a.m. to 11:00 p.m., seven days a week,” states the report. “Workers report going for months at a time without a single day off. All overtime is mandatory.” Workers are forced to operate at a grueling pace, subjected to frequent abuse from supervisors, and cheated out of 40 percent of the wages owed them, according to the report.
“The factory we researched was horrific,” says Charlie Kernaghan of the National Labor Committee. “Every single labor law in China was being blatantly violated.”
“There was very harsh discipline,” he continues. “The workers couldn’t speak back to the supervisors. Supervisors would call them idiots and garbage, but if the workers tried to speak back or defend themselves, they would be beaten, choked and fired. It was run like a prison.”
In a statement, Speedo’s parent company, Warnaco, said, “We sincerely regret that worker’s conditions have been compromised at a supplier factory despite our efforts to work with them to improve standards. We operate a rigorous Code of Conduct to monitor correct business standards with the objective of achieving the highest ethical standards possible.”
“We have been consulting with the Vanguard factory … in an effort to highlight the need for better working conditions,” the statement continues. “Despite concerted efforts on our part, there has been little compliance, and as a result we have reduced our business with the factory. … We will continue to work closely with our suppliers to ensure fair working conditions and high business standards are met.”
Kernaghan says he would prefer Speedo had remained at the factory and made more of an effort to improve labor practices there.
A month prior to the Olympic Opening Ceremonies, Adidas, Nike, Speedo and others agreed to form a joint working group with trade unions and nongovernmental organizations to address fair labor practices. Only a few weeks later, however, Adidas reportedly announced it was transferring large amounts of its production out of China because wages set by the government were “too high.” Adidas did not respond to requests for comment.
Corporate entanglements also have the potential to affect the very conduct of Olympic sports and events.
One issue involves the loyalties and favoritism of sports governing bodies and coaches who have commercial ties to equipment makers.
In May, California-based TYR Sport filed an antitrust lawsuit against Speedo, the U.S. Swimming head coach and U.S. Swimming Inc., the governing body of U.S. Olympic swimming. The lawsuit charges that U.S. Swimming refused ads from Speedo competitors for its magazine Splash, the largest circulation swimming magazine in the United States. It also alleges Splash has at times airbrushed photos to remove the logos of Speedo competitors from swimmers’ apparel. The central charge of the lawsuit involves swim team coach Mark Schubert, a paid spokesperson for Speedo, who publicly endorsed Speedo’s high-tech “LZR Racer” suit on numerous occasions — telling athletes to wear the suit, regardless of their sponsorship deals and contractual commitments. Olympic swimmer Erik Vendt was one swimmer who switched from TYR to Speedo. TYR also named Vendt as a defendant in the suit, claiming he broke a binding sponsorship contract by using the Speedo swimsuit.
The Australian Courier Mail reported in April that “Schubert is recommending all Americans wear the Speedo suit at their Olympic trials even if they are sponsored by another company. ‘I would strongly advise them to wear the suit at trials, or they may end up at home watching on NBC,’ Schubert said. ‘Do you go for the money or for the gold?’”
The TYR lawsuit claims that “The actions of USA Swimming, Speedo and Schubert have had the desired effects. Numerous elite swimmers — including several Olympic medal winners — have worn the Speedo LZR in competition despite being under contract to other manufacturers and have defected or are considering defecting from their former equipment providers in favor of Speedo. Some athletes (including defendant Vendt) have followed through on Schubert’s recommendation that they breach contracts with their equipment providers in order to avoid ‘staying home’ during the Olympic Games. These highly publicized events have had a pervasive impact on the competitive swimwear market not only at the elite level, but also at the collegiate, high school, club and summer league levels. Not only have these events affected sales of the swimsuits themselves, but due to the high visibility of the swimsuits, sales of accessories will be similarly affected because they are inextricably linked.”
With the Olympics approaching, the lawsuit was put on pause until after the Beijing games concluded. Neither TYR nor Speedo responded to requests for comment about the pending litigation.
Two-time U.S. Olympian Greg Ruckman feels that these sorts of conflicts become inevitable with the influx of corporate money into sports. “When you bring in the money you start bringing in the wrong people for the wrong reasons,” he says.
Ruckman, a rower, faults the current system of Olympic funding. Unlike other countries’ National Olympic Committees, the USOC receives no federal funding and so relies on private and corporate donations. The National Governing Bodies that control each individual sport also rely on private and corporate sponsors to make ends meet. Individual athletes, too, often garner funds for equipment and training from corporate sponsors.
Sports that receive little media attention, like rowing, often struggle to find sponsors, while more popular sports with well-known athletes, like track and field, rake in large amounts of revenue. In 2006, corporate sponsorships accounted for only about 4.6 percent of all revenue for the U.S. Rowing Association, but made up nearly 50 percent for USA Track and Field.
“It gets more and more about money, to the point now where everything that goes on within U.S. Rowing is about how many medals we have to win to continue to get subsidized by the USOC to the tune of a million, $2 million every year,” Ruckman says. “And where does that money go? It goes to building up a bigger bureaucracy.”
Ruckman says that this commercialization of Olympics detracts from the “purity” of the Games. “It detracts from what the sport is supposed to be about and can hurt the athletes who are in it just for the sport of it,” he says. “The athletes are so vulnerable in this process. The more money that comes in, the worse it gets.”
Jennifer Wedekind is a researcher for Multinational Monitor. Additional reporting by Ben DeGrasse. This article is based on a Multinational Monitor report, “The Commercial Games: How Commercialism is Overrunning the Beijing 2008 Olympic Games.”