Li Ning Co Olympic Dream Is Blocked

The Olympic Plan for the Chinese sports and clothing enterprise (Li Ning Co.) has been stifled in the bud, which includes an agreement to provide clothing for the CCTV sports channel during the Olympic Games.

Although the Olympic Games cost less than Adidas (Adidas AG) and Nike (Nike Inc.) in the local market, it still cleverly discussed some agreements to share the Olympic feast.

The agreement with CCTV is a marketing strategy. It will make Lining's "L" logo similar to Nike's logo, appearing in front of China's TV audience of tens of millions watching the Olympic Games.

This will help to compete with Adidas and Nike. Adidas is a partner of Beijing Olympic Games, while Nike provides sponsorship for many athletes.

But now, the Li Ning Co's L logo will be much less likely to be seen in the Olympics.

The company said the hosts and guests of CCTV studios would stop wearing Lining's logo until the end of August, but reporters on the spot could still wear Lining's costumes.

The agreement between Lining and CCTV 5 (now Olympic Channel) began in January this year and was scheduled to be suspended by the end of this year.

Li Ning Co executives have previously said that the agreement will not encounter problems.

Such implicit marketing agreements are mostly used by companies that do not become Olympic sponsors but want to get a slice of the world's biggest sporting event.

The opening ceremony of the August 8th Olympic Games in Beijing is expected to be the first live sports event attracting 1 billion TV viewers.

A sudden change in the agreement between state television and closely related Chinese companies is no doubt a warning to recessive Marketers: this time, the government seems to be in a position to implement the sponsorship agreement.

Experts say companies should be careful not to annoy the Chinese government, or they may jeopardize their own business growth in China.

According to Octagon, a sports marketing agency, the Beijing Olympic Games received about $1 billion 500 million in sponsorship fees, about two times the 2000 Olympic Games in Sydney and more than three times the 2004 Olympic Games in Athens.

Paul Paull, the Beijing sports marketing consultant at R3, said that the previous Olympic organizing committees had little power to curb hidden marketing, but there were some changes in the Olympic Games.

I didn't see any company breaking the rules and angering the Chinese government.

For example, although the International Olympic Committee (International Olympic Committee) and the organizing committee can prevent the use of Olympic symbols, they are hard to control the consumer's idea.

According to a survey conducted by R3 in April, four of the 10 brands that Chinese consumers consider most closely related to the Olympic Games are not Olympic sponsors. They are Lining, Nike, Pepsi and Mengniu Dairy.

In June this year, Beijing promised to step up efforts to prevent the non sponsorship of the more than 60 Olympic Games from ambushed by the official sponsors.

Chen Feng, Vice Minister of market development department of Beijing Olympic Organizing Committee, told reporters this month that China's media had recommended Olympic advertising partners or sponsors' ads in the Olympic Games report, and no non Olympic partners were allowed to appear. This is considered to be a direct agreement between Lining and CCTV.

According to people familiar with the matter, the activities of non sponsors during the Olympic Games in Beijing will also be harder to get approval.

The changes in the agreement did not arouse much repercussions outside.

Ricky Wu, a senior consultant at Ruder Finn Asia, who is responsible for Li Ning Co's public relations, said that it was not the relevant departments of the Olympic Games that ordered the company to abandon the agreement. It was Li Ning Co who voluntarily reduced the best opportunity to display itself in the Olympic Games, with the purpose of respecting the main theme of the Olympic Games.

International Olympic Committee spokesman Emmanuel Emmanuelle said that International Olympic Committee will strive to protect the rights of its partners, "said Moreau.

CCTV declined to comment.

Nonetheless, companies that do not spend money to become official partners of the Olympic Games may also share the Olympic feast.

Although Adidas paid $more than 100 million to become an official provider of sportswear, rival Nike still has many opportunities to use the Olympic Games to show itself by sponsoring many Chinese sports associations and Liu Xiang players.

Liu Xiang, the 110 meter hurdler, is the most famous Chinese athlete outside Yao Ming.

This means that when Chinese athletes rush through the end or shoot, the audience will see more of Nike's logo than Adidas.

This means that Nike has a lot of opportunities to show itself, because according to a report released by PWC (PricewaterhouseCoopers) this week, the total number of medals in China is expected to surpass that of the United States.