Chicago: Bank of America Corp will not renew its sponsorship deal with the US Olympic Committee unless it gets more bang for its marketing dollars under a restructured agreement, the company said on Wednesday.
“The bank cannot renew its existing sponsorship as structured,” said Joe Goode, Bank of America’s senior vice president of global media relations.
Bank of America told the USOC late last week it would not extend a prior deal that expired following last summer’s Beijing Olympic games unless it were restructured to provide a better return. The earlier deal generated around $12 million to $15 million from 2004 to 2008 for the US Olympic team.
In a statement, the USOC said it is in talks with the bank regarding a sponsorship running to 2012, and is “confident that we can find a structure that will work.” It called the bank an important partner over the last 16 years, and a tremendous supporter of the Olympic movement.
Goode declined to say whether the bank was seeking a lower payment or greater marketing clout. “We remain in discussions with the committee on exploring alternative ways to continue our support,” he said.
General Motors Corp and Home Depot Inc previously ended their USOC sponsorship deals, and numerous companies have slashed sports marketing budgets to cut costs during the recession.
The US banking sector has been battered by soaring credit losses and depleted capital.
Bank of America is cutting several billion dollars of annual costs and a possible 42,500 jobs after buying Merrill Lynch & Co and Countrywide Financial Corp over the last year. Bank of America also has received about $45 billion from the Treasury Department’s Troubled Asset Relief Program (TARP).
US regulators ordered Bank of America to raise $33.9 billion after the bank underwent a government “stress test” of its ability to handle a deep recession. It has said it has raised nearly all of that sum.
Goode, however, said the decision was not related to the economy, a need to cut marketing expenses or the pressures facing banks that took TARP funds.
“It was really about looking at the return on our investment and how we can maximize and optimize that,” he said.
Bank of America’s official USOC team sponsorship began in 1992 for the Barcelona summer games and continued through the Beijing games. Goode said the company will continue to support Chicago’s efforts to host the 2016 summer games.