The 2016 Olympics are, amazingly, around 1,000 days away. The 2014 FIFA World Cup is even closer.
With these two global events being held by Rio within a span of two years, some experts are saying the country of Brazil is in over its head.
Violent street protests are raging because of Brazil’s poor schools, shabby hospitals and soaring costs. Protesters have questioned why the country is spending $15 billion on the World Cup and a similar amount on the Olympics.
With the protests ongoing, sponsors for the 2016 Olympics may be more hesitant to spend big bucks on a Games that could turn sour. At the same time, Rio needs all the help from sponsors it can get.
Rio Olympics Need Sponsor Support
Local sponsorships for the 2016 Olympics are said to comprise about 20 percent of the final Rio budget. The operating budget was $2.8 billion in the original bid in 2009, but is expected to rise to at least $4 billion. That is a huge amount of money.
An early sponsorship market of $500 million dollars was met thanks to deals with Nissan, Banco Bradesco and Claro. But deals have seemingly slowed since then. Gerhard Heiberg, head of the IOC marketing commission and an IOC member from Norway, made sponsors seem cautious:
“I know that some sponsors are waiting to see how things are going to be at the World Cup. Will it be a success? Will it be chaotic? If people feel things are going to be very good for the games, it’s easier to get the sponsors. If people feel things are not going to be 100 percent, they will hold back on the Olympics. First they want to see what’s going to happen with the World Cup.”
But if the FIFA World Cup is considered to be “testing water”, then a good sign comes from the fact that it sold out its sponsorships spots six months ago. Total revenues for the World Cup sponsorships reached nearly $1.6 billion, making the Olympics look a bit more promising.
Even so, there are still some doubting whether Brazil can handle the two global events. Simon Chadwick, a professor at Coventry University in England who researches sports marketing trends, is leery:
“You have the double-whammy of two events. I think it’s a massive ask of corporate Brazil to commit to such huge financial resources to two sets of sponsorship deals. My sense of Brazil right now is that they have overextended themselves. The cost implications of staging two mega events is just too much.”
With sponsors questioning whether their brand will be portrayed properly in a country and city that is under duress, signing those sponsors may prove a daunting task.
Photo credit – riooooolympics.com