Nissan for Rio 2016 Auto Sponsor?

(ATR) Neither Rio 2016 nor Nissan will confirm reports to Around the Rings that the Japanese automaker is the winning bidder to be the auto sponsor for the 2016 Olympics.

But ATR understands that a record-setting deal with Nissan has been struck. The package could be worth $250 million, a record for the category at an Olympic Games. The sponsorship is a national one, marketing rights limited to Brazil.

David Reuter, vice president of corporate communications for Nissan Americas, tells ATR that the company has been in discussions with Rio 2016.

"I can confirm that we have been in discussions with Rio 2016 but we have nothing further to announce at this time," he said.

Rio 2016 communications director Carlos Villanova termed reports about Nissan as "gossip and speculation’. He says a formal announcement would be coming in a week or so.

There is no word from the IOC as to whether the deal has been approved by Lausanne, a must before Rio can go public with the news.

The awarding of the automotive sponsorship brings to an end a process launched last year with a tender request.Volkswagen, number-one brand in Brazil and sponsor for both Sochi 2014 and Beijing 2008, would seem to have been a favorite to claim the category.

But Brazil represents an important growth market for Nissan, the country’s 10th-ranked auto line. In October the company announced that it would invest $1.5 billion to build a manufacturing facility in the state of Rio de Janiero. The company aims to capture five percent of market share by 2016 and establish itself as the leading Asian automotive brand in Brazil. Nissan had a market share of 1.7 percent in 2011.

"Just as Nissan has demonstrated in China, Russia and India, we are investing in the regions with the most potential for growth," said Carlos Ghosn, chairman and CEO of Nissan Motor, back in October.

He added, "Brazil has clearly emerged as the engine of Latin American growth, and we look forward to contributing to Brazil's economic landscape and its automotive manufacturing base in the 21st century."

If the estimate is accurate, Nissan’s $250 million for the category surpasses the value of past Olympic sponsorships by Volkswagen and BMW. Volkswagen’s deal with the Beijing Olympics in 2008 was reportedly worth $150 million, while BMW’s partnership with London 2012 is valued at $70 million, a similar amount for VW's Sochi 2014 deal.

The deal is likely to include substantial amounts of cash and value-in-kind. With automobiles a major need for the Olympic torch relay across Brazil, the category sponsor probably will have a major presence on the relay.

Rick Burton, former chief marketing officer for theU.S. Olympic Committee, tells Around the Rings that Nissan is probably counting on the deal to pay for itself in the upcoming years.

"While the price tag may appear steep to some, Nissan was probably willing to pay a premium to protect market share … or to grow market share in Brazil during the next four years," said Burton, now the David B. Falk Professor of Sport Management at Syracuse University.

"Additionally, you very rarely (if ever) read about an Olympic sponsorship going for less than the market rate. That is, if the market would bear the price paid, it is probably within an acceptable range," he added.

"Given that Brazil has been enjoying a robust economy, Nissan is probably counting on the additional visibility and velocity this deal will create for the brand to ensure that it pays for itself during the next half decade."

Nissan has also recently shown interest in supporting large sporting events, serving as a top tier sponsor for the 2011 Pan American Games in Guadalajara.

The automotive category will be the fourth national sponsorship closed for Rio 2016. Bradesco holds the banking and insurance categories while Embratel and Claro share the telecom category.

Written by Ann Cantrell.

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