Olympic Sponsors Pay Almost $200 Million to Back Torch Tour

Coca-Cola Co. is leading three sponsors of the Olympic torch relay that will cross Brazil’s 26 states before arriving at 2016 host Rio de Janeiro.

The world’s largest beverage company is joined by carmaker Nissan and Brazilian bank Bradesco in supporting a tour through 250 towns and cities in South America’s most populous country. The deals are worth “below” 500 million reais ($194 million) in total, said Renato Ciuchini, head of marketing at Rio 2016.

“We have a good combination,” Ciuchini said yesterday in an interview in Rio. “You have Bradesco, which is very strong in every city of Brazil, you have Coke, an international company with Olympic torch experience, and we have Nissan, a huge global conglomerate which is just a startup in Brazil.”

The torch’s arrival is a significant part of the buildup to the games, helping to boost enthusiasm among domestic audiences who in recent years have watched billions of dollars being spent in preparation. The event in Rio will cost 37.6 billion reais ($14.6 billion), according to local organizers.

“It’s incredibly valuable because it brings that sort of indefinable Olympic magic if you get it right to the whole country,” said Tim Crow, chief executive officer of London-based sponsorship consultant Synergy, which has worked on Olympic programs for two decades. “Many Olympics talk about making it a games for a nation and the torch is their opportunity to deliver on that promise.”

Global Symbol

Michael Payne, former head of marketing at the International Olympic Committee, said the torch relay “is the single most sought-after marketing opportunity” of the games.

“The meeting with the Brazilian people will reinvigorate the strength of this global symbol and spread the Olympic spirit,” Rio 2016 head Carlos Nuzman said in a statement.

For Coke, which is sponsoring the relay for the 11th time since first putting its name to the event at the Barcelona Games in 1992, the opportunity of going nationwide is one of the biggest assets of the Olympic program, said Flavio Camelier, a vice president of Coke Brazil, who’s managing its Rio 2016 operation.

“It allows us to stretch time because we bring the Olympic Games prior actually to the games themselves,” he said.

Bradesco and Nissan are first-time participants. In London 2012, Samsung and Lloyds Banking Group also backed the relay. London-based Lloyds used the sponsorship to promote community values and its nationwide reach with the slogan “for the journey.”

Local Leverage

Crow said he expects Bradesco, Brazil’s second-biggest bank, to adopt a similar strategy.
“Bradesco will want to leverage that they are everywhere in the country,” he said.

Rio organizers have raised $1 billion from sponsors. Ciuchini said he expects to raise 400 million reais more by the time the Olympics begin. Bradesco is among the first two sponsors, and paid more than $300 million for exclusive rights to the banking category. Nissan signed up as car partner in 2012.

Nissan’s president for Brazil, Francois Dossa, said the sponsorship was not part of the package it signed, and involved getting through a competitive tender process. The company built a $1.5 billion plant in Rio in April and is trying to increase its business in a country where it’s the ninth-biggest automobile company by sales.

Targeting Growth

A special Olympic edition of its new March model will accompany the torch.

“We are investing in Brazil, we want to grow in Brazil,” Dossa said. “We believe that this market, which today is the fourth or fifth market in the world, will continue to grow.”

Rio was awarded hosting rights in 2009 and the event has been overshadowed by last year’s soccer World Cup in the country. That tournament attracted some local protests and demonstrations about the amount of money being used to fund sporting events.

In 2013, the World Cup was among the targets for the biggest nationwide demonstrations in a generation. A few months before the tournament, Coke had to abandon a tour of the World Cup trophy in Brasilia after police clashed with an indigenous group that fired arrows.

Before the Beijing Games in 2008, the Olympic torch relay attracted protesters as it toured cities around the world. Demonstrators used the event to voice opposition to China’s human rights record.

“I really don’t see protests happening because the torch relay is very much about the community and the people,” Payne said. “When the relay went to London they were scared about there being protests, but that didn’t happen.”

Sponsorship accounts for 51 percent of the 7 billion reais organizing budget. The remainder is made up from ticket, hospitality and merchandise sales, and a payout from the IOC.
The torch will be carried by at least 10,000 people across more than 12,000 miles (20,000 kilometers), and will fly about 10,000 miles over Brazil before the cauldron is lit at the opening ceremony in the Maracana Stadium on Aug. 5, 2016.