Kodak to end Olympics sponsorship after 2008 games

NEW YORK (Reuters) - When the Beijing Olympics closes in August 2008, more than a century of “Kodak Moments” at the global sporting event will also come to an end.

A model displays the Kodak Easyshare V705 camera one day before the opening of the Photokina 2006 World Fair for Imaging in Cologne September 25, 2006. Kodak said on Friday it will end its long-standing sponsorship of the Olympics after the 2008 Beijing Games. REUTERS/Ina Fassbender REUTERS/Ina Fassbender

Eastman Kodak Co EK.N said on Friday it will end its Olympic sponsorship after the 2008 Beijing Games, part of a redirection of the company's marketing strategies as it completes a long expensive move from photographic film to digital products.

Kodak has been one of 12 top-tier sponsors of the event for some 20 years, linking its logo and advertising with marketing efforts for the Olympics.

For advertisers, the Olympics is one of the splashiest events for reaching the widest possible audiences on a world stage.

Top sponsors rank among the world's largest companies, from McDonald's MCD.N to Coca-Cola Co KO.N.

Chinese state media predict the Beijing Games will reach 4 billion television viewers in 2008, 1 billion more than the Athens Games in 2004.

Kodak made the decision as part of an effort to direct its marketing message “closer to our customers,” and not out of financial considerations, a company spokesman said.

“Our new business strategy requires us to reassess our marketing tactics as well, and adapt them to changing market conditions and evolving customer behavior,” said Kodak Director of Brand Management Elizabeth Noonan.

Analyst Shannon Cross of Cross Research said Kodak may believe its brand is so strong that it no longer needs to invest in Olympic advertising.

“Now they are going to be more targeted with their advertising dollars ... probably pushing more advertising spending to new initiatives such as inkjet (printing),” she said.

The move also mirrors that of industry peer Xerox Corp XRX.N, which ended its relationship after the 2004 Games in Greece.

Shares in Kodak rose 4.8 percent to $28.33 on the New York Stock Exchange.


Rochester, New York-based Kodak is in the final stages of a long, expensive shift away from film toward digital products like cameras and consumer printing.

At the Olympics Kodak has run an Image Center for photojournalists to edit and transmit their pictures of competitions, a diagnostic imaging clinic to treat athletes, and a facility for printing photos of accredited participants.

A company spokesman declined to detail the costs involved with being a top-tier partner. In prior years, major sponsors were estimated to spend about $55 million each as part of their association with the world’s premier sporting event.

Kodak in 1986 joined the International Olympic Committee’s TOP program, a worldwide sponsorship system that operates on a four-year term aligned with the Olympic quadrennium.

Gerhard Heiberg, Chairman of the IOC’s Marketing Commission, said he was grateful for years of support from Kodak, whose association with the Olympics dates back to the first modern Games in 1896 in Athens.

“We also look forward to continuing to work closely with Kodak in preparation for the Beijing 2008 Olympic Games,” he said in a statement.

But some experts say removing Kodak’s imprint and its bold red logo and yellow packaging from the high profile, three-week sports event may be a miscalculation.

“It is a global, high visibility event where they can leverage and promote their brand like crazy,” said brand consultant Alan Siegel of Siegel & Gale in New York.

“Their image and reputation have been tarnished somewhat and this gives them a platform to speak to the world in a powerful way,” Siegel said, referring to the affects of the company’s complex turnaround.

Over the past four years Kodak has cut over 30,000 jobs and closed manufacturing plants around the world, while its stock has languished between $22 and $30.

The IOC has already reached agreements with eight of the existing 12 TOP Partners to continue their partnership with the Olympic Movement beyond the Beijing 2008 Olympic Games.

Worldwide sponsorship partners currently confirmed for the Games in Vancouver 2010 and in London 2012 are Coca-Cola, Atos Origin ATOS.PA, GE GE.N, McDonald's, Omega, Matsushita's 6752.T Panasonic, Samsung 005930.KS and Visa. Panasonic and Samsung have extended their partnership until 2016 and Coca-Cola's partnership continues through 2020.

The International Olympic Committee received about $2.5 billion for the broadcasting rights for the Turin 2006 Winter Games and the Beijing Summer Olympics.

Additional reporting by Karolos Grohmann in Athens, editing by Brian Moss