Olympics helps Russian Sponsorship Growth

In Russia, the relationship between sport and business has been one of patronage than partnership, meaning that sport clubs and personalities are often dependent on sugar daddies or state corporations, and Russian athletes miss out on the lucrative advertising contracts enjoyed by their well-heeled counterparts in Western Europe, America or East Asia.

Now, led by a wave of sporting success, a consumer boom and increasing advertising savvy, that mentality is starting to change.

Whereas in the United States, 15 percent of advertisements use celebrities, with the figure rising to around 40 percent in East Asia, in Russia the total is a miniscule 2 percent. But the volume of contracts is set to shoot up from $60 million in 2007 to about $200 million this year.

That means that come autumn, the country should be festooned with pictures of victorious Olympians, promoting everything from washing machines to mobile phones.

Omsk-born Alexei, 24, won gold in Athens four years ago and has a number of sponsorship and endorsement contracts with Russian companies, his father said. His first fight is scheduled for Monday.

"The number of companies and the interest has increased since the last games," he said. "It is not a massive increase, but the amount has gone up steadily."

Many Russian sportsmen and women will be looking for inspiration to their compatriots who have made it big on the international stage and forged a global name for themselves. All follow in the wake of golfer Tiger Woods, who looks set to become the world's first billionaire sportsman over the next few years.

"Once the Olympics are over, the winning athletes will be looking at average contract from $50,000 to $200,000," Kormilitsyn said. Athletics and boxing are the most profitable Olympics disciplines, and firms from the telecommunications and banking sectors are keenest to cash in, he said.

It's not just for the athletes that this year's Olympics represents a potential boom time. China has spent $42 billion getting the country ready, and income from both broadcast rights and sponsorship are soaring.

As they set out to crack the mammoth Chinese markets, companies are betting big on Olympic sponsorship.

From 2001 to 2004, sponsorship made up just over one-third of total revenue for the Olympics. Fees for broadcast rights account for just over half of all revenue during that period. Organizers estimate that the Beijing Games will bring in over $1.7 billion in broadcast rights.

But although they get their equal share of the central pot, the Russian Olympic Committee has lagged behind many of its counterparts in other countries.

Compared with the lengthy list of major corporate sponsors on the glossy web site of the U.S. Olympic Committee, the list of corporate sponsors for the Russian team is dominated by state firms, such as VTB, Sberbank and Aeroflot.

VTB is sponsoring the men's volleyball, women's basketball and gymnastics teams.

"They're the most promising. We think they will win," said Vasily Titov, deputy chairman of the VTB bank management board. "We want to be associated with the leaders." The bank has featured the basketball players in advertising campaigns.

From The Moscow Times