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Article

17 Mar 2008

Author:
Mei Fong, Wall Street Journal

Sponsors' Olympic Balancing Act - Tibet Unrest Could Devalue Investments, But Firms Fear Riling China's Government

The violent clashes in Tibet and western China are causing Olympic sponsors to evaluate how they can protect their investment in the coming Games here, without appearing to undermine China's government. Lenovo Group Ltd., Coca-Cola Co., McDonald's Corp., Volkswagen AG and others have paid record sums...to sponsor Beijing's Olympics... But there is growing concern among corporate sponsors that the rising tide of protests over Tibet and China's support of the Sudanese government will detract from the Games' commercial success, say some executives, who spoke on condition of anonymity for fear their comments could sour relations with the Chinese government... Several high-level executives from U.S. sponsor companies had already planned to meet in New York, said a person familiar with the matter. The meeting, which is scheduled to take place in the next two weeks, was prompted by an anti-Olympic campaign from activists, who say the Chinese government's ties with Khartoum are aggravating strife in Sudan's Darfur region... Now, the deadly violence in Tibet...is likely to add urgency to the matter, said a person advising several Olympic sponsors. Unlike Darfur, Tibet is more obviously linked with China, and the Chinese government's sensitivity over the issue of Tibetan independence makes it more likely that they could overreact. "The last thing [the sponsors] want is another Tiananmen tank incident," said the person... Coca-Cola, Samsung Group and Lenovo have more immediate worries, too, as sponsors of the Olympic torch relay that begins in two weeks and is scheduled to pass through Tibet... The celebration now could be in danger of being marred either by activists or a heavy military presence... In a statement, computer maker Lenovo -- the only Chinese company to be a top-tier Olympic sponsor -- said the company is following news reports from Tibet "with concern and regret" and noted that "the situation involves a longstanding dispute and political forces beyond the control of Olympic sponsors, and it would exist even in the absence of the Olympic Games." Adidas AG said it was concerned about violence in Tibet and would continue to monitor news on Darfur and Tibet closely, but "we should however not lose sight of the fact that the Olympics is being held to celebrate sports." General Electric Co. spokeswoman Deirdre Latour said any issues regarding the Olympics should be left to the governing bodies, and the Olympics "is a force for good." McDonald's said in an email that political issues should be resolved by governments and international bodies such as the United Nations... Few expect the sponsors, which have longstanding businesses in China, to pull out of the Games at this stage. But people close to the matter say some companies could scale back Olympic marketing to distance themselves... Executives at some sponsor firms also say they have been privately lobbying the Chinese government and the International Olympic Committee to improve human-rights issues. Such an approach has its problems because the nature of its privacy makes it hard to appease activists, who are increasingly seeking to publicly link the Games and sponsors. To that point, a coalition of Darfur activists is planning to target sponsors the activists deem unresponsive in a campaign beginning March 31. Called Turn Off/Tune In, the campaign is asking the public to pledge to turn off Olympic sponsors' ads during the Games, and instead tune in to daily live broadcasts with Ms. Farrow from a refugee camp in Darfur, according to the Dream for Darfur Web site.