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Xerox to end Olympics partnership

Xerox will end its partnership with the IOC after the 2004 Athens Games. After 40 years with the Olympics, the company will refocus its marketing opportunities.
/ Source: The Associated Press

Xerox, which has been involved with the Olympics for nearly 40 years, will drop its global sponsorship agreement after next year’s Athens Games.

The International Olympic Committee said Tuesday that the company would not renew its sponsorship deal when it runs out in December 2004.

“While we certainly appreciate the value of this investment and will leverage it during the Athens Games, Xerox has decided to refocus its marketing to other customer-facing initiatives,” the company’s chief marketing officer Diane McGarry said.

Xerox became a partner of the Olympic movement in 1964 and joined TOP, the IOC’s worldwide sponsorship program, in 1994.

The company has been involved in the publication and distribution of Olympic results and provided photocopiers, supplies, services and other office equipment to organizing committees.

“Xerox has been an excellent partner over the years and we are saddened to see the relationship end,” said Gerhard Heiberg, chairman of the IOC marketing commission. “We recognize, however, that in the world today, companies must adapt and alter their business and marketing strategies to accommodate changing market conditions.”

Xerox has struggled in recent years with increased competition, an accounting scandal that resulted in a $10 million fine and a restatement of its finances, losses, a botched sales force reorganization and a heavy debt load. But the company has implemented a turnaround program that cut costs by billions of dollars and introduced numerous new products, restoring profitability.

“This is a very large investment to make in the Olympics,” said Xerox spokesman Carl Lengsenkamp. “If we can focus those dollars in other marketing areas, that’s good for the bottom line.”

Xerox does not disclose the cost of the sponsorship, Lengsenkamp said. He said he did not have specifics on where the new marketing investment might occur, but cited sports teams and cultural events as possibilities.

“We are just trying to refocus some of our marketing opportunities to provide a really strong return on investment,” Lengsenkamp said. “Clearly we want to see where we can get our best return on investment. There’s no question our market conditions have changed.”

Xerox said it has not decided if it will continue sponsorship arrangements with some national Olympic committees.

The TOP program currently includes 12 multinational corporations, proving the IOC with revenues of more than $600 million. Eight companies have already extended their sponsorship through 2008, the IOC said.

The IOC negotiates four-year corporate sponsorships for a reported $65 million apiece.