Why Would Tata Consultancy Services Sponsor NYC Marathon?

24/7 Wall St.

Until yesterday, ING was the title sponsor of the New York City Marathon. The deal made sense as ING Groep N.V. (ING) sells products to consumers and has hundreds of thousands of customers. Now ING is out and Tata Consultancy Services is in. How and why Tata took this position is anyone's guess, but it defies logic. The company provides products to corporations, particularly IT services and technical consulting. As it starts the sponsorship, Tata has begun to waste a great deal of money.

The firm describes itself this way:

We are a leader in the global marketplace and among the top 10 technology firms in the world. Our continued rapid growth is a testament to the certainty our clients experience every day. Building on more than 40 years of experience, we add real value to global organizations through domain expertise plus solutions with proven success in the field and world-class service.

Among the thousands of runners who participate in the marathon and hundreds of thousands who line the streets might be a very few people who would hire Tata for its services. Tata's stated reason for the deal is a real stretch:

The new global partnership -- fueled by movement and empowered by technology -- is built on a shared commitment to elevating the health and well-being of individuals and embodies TCS's historical dedication to strongly supporting the communities in which it operates. The spark of this joint "movement" starts today in New York City, driven by TCS's digital, financial, strategic, and marketing support of NYRR events and programs, most notably a goal to make the New York City Marathon the most technologically advanced and socially engaged marathon in the world.

An analysis of why the deal is a bad one for Tata does not have to go beyond the Marathon's other sponsors, nearly all of which target individual consumers. These include the Asics running shoe company, Foot Locker Inc. (FL), United Continental Holdings Inc. (UAL), Timex, Nissan and ESPN.

Tata has gotten caught up in the thrill and media attention given to one of the world's great athletic events. In the process, it will waste a lot of its shareholder's money and will gain very, very few new customers.

Rates

View Comments (0)