Kodak ends long Olympic run

ROCHESTER, N.Y. -- Photography icon Eastman Kodak Co. said Friday it is ending its role as a top corporate sponsor of the Olympics after next summer's games in Beijing.

The company, which is undergoing an arduous digital overhaul, cited a shift in marketing tactics for halting a relationship that dates back to the first modern games in Athens in 1896, when it ran advertisements in the scoring program.

"As we complete the transformation of Kodak, it makes sense for us to take a new direction," said Elizabeth Noonan, Kodak's director of brand management.

"Digital technology changes everything, including the way we market our products and services," she 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."

Kodak is one of 12 sponsors in "The Olympic Program," the top tier of business corporations that each spend tens of millions of dollars for rights to market the Olympic logo. Kodak has served as the official photography sponsor for the games over the years. Other global Olympic sponsors include Coca-Cola, McDonald's, General Electric and Visa.

In Beijing, Kodak will provide an imaging center for photojournalists, a diagnostic center to treat athlete injuries and Olympic identification badges for thousands of athletes, officials, journalists and volunteers.

Kodak signed an eight-year agreement valued at more than $100 million to be a global sponsor for the 2002 Winter Games in Salt Lake City, the 2004 Summer Olympics in Athens, the 2006 Winter Games in Turin and the 2008 Summer Games.

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

While the Olympics are "a great way to build a global brand," Kodak spokesman David Lanzillo said, "they also lock us into promotional activities within a finite time period. We fully plan to reinvest those marketing dollars into other activities that more directly connect us with our customers over a much broader time period."

For example, a Kodak van equipped with photo scanners has been traveling to U.S. cities since last April to encourage people to digitize film prints currently stored in drawers or shoe boxes.

"I've … seen consumers bring suitcases full of pictures," Lanzillo said. "They have those digitized and uploaded" to Kodak's online business.

The picture-taking pioneer, which remains the world's top maker of photographic film, is applying the finishing touches to a drastic, four-year digital makeover.

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., which ended its relationship after the 2004 Games in Greece.

Gerhard Heiberg, chairman of the International Olympic Committee's Marketing Commission, said he was grateful for the years of support from Kodak.

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

At least one expert said 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.

Kodak has piled up nearly $3.2 billion in restructuring charges and accumulated $2.1 billion in net losses over the last 11 quarters. Its work force will slip to around 34,000 at year-end, half what it was five years ago.

The International Olympic Committee has already reached agreements with eight of the existing 12 top corporate partners to continue their relationship beyond 2008.

Worldwide sponsorship partners confirmed for the Games in Vancouver 2010 and in London 2012 are Coca-Cola, Atos Origin, GE, McDonald's, Omega, Matsushita's Panasonic, Samsung 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.