EXCLUSIVE-Visa extends sponsorship of Olympics through 2020

* Extends sponsorship for eight years

* Top sponsors often pay $100 mln over a four-year period

* Visa says Games' popularity has boosting its business

By Ben Klayman

CHICAGO, Oct 27 (Reuters) - Visa Inc (V.N) has extended its deal as the exclusive payment service of the Olympics for eight years, through 2020, saying the Games worldwide popularity has boosted its business and brand.

The world's largest payment network said the sponsorship deal with the International Olympic Committee (IOC) runs through the 2020 Summer Games and extends a relationship that began in 1986.

Terms of the deal, which includes Visa being the only card accepted at Olympic venues as well as use of the Games' five-ring logo, were not disclosed.

However, top Olympic sponsors, such as Coca-Cola Co (KO.N) and McDonald's Corp (MCD.N), often pay as much as $100 million in cash and in-kind services as sponsors for a four-year period that includes a summer and winter games, analysts said. Many spend three times that amount in marketing the relationship.

The IOC has said it wants to raise about $1 billion from top sponsors for the 2010 and 2012 games, up from $866 million in prior two games.

"The Olympics have proven to build our business over time," Antonio Lucio, Visa's chief marketing officer, said in a telephone interview.

"It's basically a marketer's dream," he said, adding it was one of two sports properties along with soccer's World Cup that appeal to a global audience. Visa also sponsors the World Cup.

Last month, Visa extended its sponsorship of the U.S. National Football League by five seasons at an estimated $8 million a year.

Sports leagues and teams have been hurt over the past year as major corporate sponsors have cut spending on sports marketing, including sponsorships, advertising and tickets.

Spending on sports sponsorships by North American-based companies is expected to rise only 0.7 percent this year to $11.48 billion, after growth in 2008 of 14.6 percent, according to IEG, owned by advertising giant WPP Plc (WPP.L).

Visa has seen its revenue growth slow over the last year as debt-burdened consumers use their credit cards less often. Last month, Visa CEO Joseph Saunders said U.S. consumer spending would remain lackluster for the rest of the year.

However, the company has pushed ahead with sponsorships, as Lucio said research shows sports deals drive consumer transactions and improve brand image.

Since 1986, Visa and its partners have issued more than 21 million Visa cards bearing the Olympic rings. For the Summer Games last year, Visa added about 90,000 ATM machines and signed up some 216,000 merchant acceptance locations in China.

Visa also said its brand equity is 25 percent higher among consumers who are aware of its Olympic sponsorship.

The Olympics has not been immune to the slowdown, although more of the pain has been felt by local organizing committees rather than the IOC. Locking in sponsors so far ahead only helps, said Timo Lumme, IOC director of TV and marketing.

"There's no question the financial stability that comes from long-term support, and early long-term support, cannot be underestimated," Lumme said in a telephone interview.

Nine sponsors are signed for the current four-year period ending in 2012. Atos Origin SA (ATOS.PA), Panasonic Corp (6752.T) and Samsung Electronics (005930.KS) have extended until 2016, while Coke and Omega, like Visa, are signed through 2020.

The Olympics' appeal is simple, said Chris Welton, a former top marketing executive for the IOC who now works as a consultant.

"It's not about who wins, but how people get there," he said. "When you're at an Olympic Games, you can feel that kind of magic in the air, and that's why despite tough economic times ... it still survives because people yearn for the purity of those values." (Reporting by Ben Klayman; editing by John Wallace)