Monday, April 7, 2008

Love is in the Air........somewhere.

Ah, the wafting scent of tear gas in the air, police klaxons blaring, the sounds of rocks hitting plexiglass shields, riot police with arms linked marching through the streets. It must be Paris in the Spring.

I know. It’s not particularly sporting. Anyone can have a pretty good go at the French. This, however, is a return to a subject covered some weeks ago when unrest in Tibet first broke out and we explored both issues that corporate sponsors of the games may face and some strategies for dealing with these challenges ( See March 17 blog entry). Today’s efforts by thousands of protestors in Paris to extinguish (or steal?) the Olympic torch on its way to Beijing not only marks the French equivalent of Opening Day of the baseball season (protesting, sanctions violating, and slander being the national sports), it also suggests that there will be a real and sizeable community seeking to politicize the games and draw attention to China’s human rights record. Since the chances of China responding to French protests or any other type of criticism are slim, the ante has just gone up for Olympic sponsors.

Despite the government mobilizing some 3000 police, protestors so disrupted the running of the torch across Paris that the torch was indeed extinguished several times as it was ferried from area to area on a bus, and eventually the run was abandoned altogether. In a remarkable break with tradition, the French even stood up to a foreign force in their country. According to AP, “Outside, a few French activists supporting Tibet had a fist-fight with pro-Chinese demonstrators. The French activists spat on them and shouted, ‘Fascists!” What, instead of welcoming them with open arms, champagne, and dates with their sisters? How bizarre. “Le Monde” reported at least twenty arrests.

So, what now for the companies that have sunk millions into sponsorship of the games and built entire marketing campaigns and product launches around the games? Withdraw support and face an angry board-room and being shut out of the world’s largest potential consumer market? Stick it out with tired lines like Omega’s “We don’t get involved in politics”? With French protesters actually showing some spine, the likes of VW, a Beijing games sponsor, have to be getting increasingly nervous. At the Eiffel Tower, Green Party activist and politician Sylvain Garel commenced today’s fracas by lunging at the torch shouting “Freedom for the Chinese”. Later, some 35 legislators shouted “Free Tibet” outside Parliament as the torch passed. The Green Party is a serious force in VW’s home market, a reasonably strong movement across northern Europe, and influential with a lot of 70mpg diesel VW Polo buyers. When mainstream politicians are saying things like, “It is inadmissible that the games are taking place in the world's biggest prison”, things are getting tricky indeed. Socialist Party spokesperson Julien Dray said that the games were” turning into a sinister farce before they had even begun” and attributed the disturbances in Paris today “entirely to the Chinese government which has not seized the opportunity it was offered to show its desire for democracy and recognition of civil liberties”. He also called on the International Olympic Committee to announce that a boycott of the games is possible unless the Chinese government makes concessions on human rights.

And what of the IOC? Spokeswoman Giselle Davies said, “We respect that right for people to demonstrate peacefully, but equally there is a right for the torch to pass peacefully and the runners to enjoy taking part in the relay,” she said. IOC President, Jacques Rogge, a Belgian, shook off today’s reaction by the French saying "there was no momentum for a boycott of the games". This despite French Foreign Minister Kouchner reiterating President Sarkozy’s earlier statement that he would reserve the right to do so "depending on conditions". In Beijing at an IOC meeting, and well aware of China’s increasingly furious response to criticism over its handling of unrest in Tibet (the government announced that the first group of people charged with “inciting unrest” will go on trial this week,) Rogge called for the “rapid, peaceful resolution of unrest in Tibet”, the first time he has done so and a sign that the pressure is mounting on the IOC.

The Beijing meeting was doubly tough with Rogge under pressure to issues guidelines on athlete conduct with regard to their views on China and the games. Patrick Hickey, President of the 49 member group of European Olympic Committees and a substantial IOC power-broker said, "We just want him (Rogge) to tell us straight out where athletes cannot give their opinion or make demonstrations. There will be absolutely no gagging whatsoever of our athletes. We just want to be absolutely clear, and the only one to hear it from is the IOC president." Rogge will allegedly reveal those rules during a Thursday meeting. Expect more fireworks.

Time to review strategies, sponsors. “Masterful Inactivity” is looking less and less like a winning approach, although the Bloated Plutocrat seems to still favor it. While he has a good deal to say about the undervalued Yuan, he has been remarkably silent on this subject. Speaking to me this afternoon, he said, “It’s bad for business, all this fuss and noise, not what we need now. It’s not like the Chinese intervened when all those long-haired hippies and yippies were getting knocked on the head in Chicago in ’68, so people need to calm down and let the Chinese handle this. With recession afoot and the amount of US debt that China holds, some discretion is in order”. The Bleeding Heart could not be reached. Apparently he is in San Francisco, where today activists draped the Golden Gate Bridge in pro-Tibet banners. He did send Your Genteel Moderator an e-mail calling for everyone “to come together and love one another right now”, along with some star-struck saga about meeting Richard Gere. It sounds like he was revisiting some rather dubious Haight-Ashbury locales…

A boycott of the games is not what sponsor companies need fear most. In fact, for those with good risk management and aggressive insurance policies, a large scale boycott could help extricate them from an increasingly difficult situation by providing them a relatively face-saving way out. The games going forward against the backdrop of an increasingly truculent China and a growing movement of consumer boycotts against sponsor companies is the scenario that should be causing sleepless nights. Especially in Europe, politically and socially motivated consumer boycotts over the last decade have been extremely well organized and largely effective in forcing changes in corporate behavior. Without getting out in front of such boycotts, companies face the increasing likelihood that down the road they will have to choose between angering China or angering their shareholders (and in some cases both!).

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