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(ATR) A decades-long Olympic TOP sponsorship is abruptly ending with the International Olympic Committee and McDonald’s each saying “it’s mutual”.
McDonald's outside seating at the wrestling venue (ATR)
The news that McDonald’s was ending its 41-year relationship with the IOC was shortly followed by reports that Intel would be joining the TOP sponsor program next week.
Olympic marketing expert Rob Prazmark tells Around the Rings
he had heard rumors of the impending changes for a while now.
“I kinda picked that up about a year ago, just kind of unhappiness on both sides,” Prazmark says. “Certain strategies eventually run out of steam. New leadership comes in and makes different changes.
“To be a FIFA partner AND an Olympic partner and they’ve also got rights in the U.S. with the NFL – it’s a crowded calendar to pump in the money to support all of that stuff,” he continues.
McDonald's was the sponsor of the ATR Newsmaker Breakfasts at Beijing 2008. ATR Editor Ed Hula with IOC member Anita DeFrantz and Olympian Willie Banks. (ATR)
Michael Payne, former marketing director for the IOC tells ATR the needs of the sponsorship for McDonald's and the IOC have changed.
"The restaurant category has gotten more complicated with McDonald’s. At first it was hamburgers but through the years other products have been added. It’s made things very difficult for national Olympic committees and their national sponsors as well as for organizing committees," Payne says.
While the McDonald’s and the IOC’s separation is immediate, the fast food giant will continue to serve its world famous burgers and fries at the PyeongChang 2018 Games in South Korea, making it 10 consecutive Games that athletes and fans alike have enjoyed McDonald’s hamburgers at the Olympic Village and Olympic Park.
McDonald's was also the sponsor of Around the Rings
' Newsmaker Breakfasts during the Beijing 2008 Olympics.
McDonald’s chains in South Korea will maintain domestic marketing rights up and through the 2018 Games, including the use of the iconic Olympic Rings found on McDonald’s cups and packaging.
McDonald's Big Mac and a Coca-Cola at Sochi 2014 Main Press Center. (ATR)
The decision ends the contract extension signed by both parties in 2012 three years early. The eight-year deal worth $100 million was intended to extend through the Tokyo 2020 Olympics. Hints that McDonald's was on the way out became clear at the Rio 2016 Games, the first not to include a McDonald's in the Main Press Center cafeteria.
As one of the founding members of The Olympic Partner (TOP) program in 1985, the break up demonstrates a shift in the marketing priorities of both companies.
“I would not be surprised if the IOC went to McDonald’s and said ‘you want out, we want to make a change, too’,” Payne tells ATR
McDonald’s says it has been reviewing its priorities and realized the Olympics were not at the top of the list.
"As part of our global growth plan, we are reconsidering all aspects of our business and have made this decision in cooperation with the IOC to focus on different priorities," McDonald's global chief marketing officer Silvia Lagnado said in an IOC statement.
The IOC intimates that it was the review process by McDonald’s that led to the separation.
“In today's rapidly evolving business landscape, we understand that McDonald's is looking to focus on different business priorities,” IOC Television and Marketing Services managing director Timo Lumme said in a statement.
The IOC adds that it has no plans to immediately seek out a replacement in the retail food operations sponsorship category and it will review whether the category is even necessary.
“My understanding is the category will remain in the TOP program but there are only a handful of global players out there that could even take a look at it,” Prazmark suggests.
“You take Subway which is a global brand now, Dunkin’ Donuts is a global brand, Wendy’s somewhat, Domino’s is a global brand, so it really opens up a lot of potential out there if you keep it TOP, and if not what do you do? Do you just release the category?
“The IOC is not hurting for TOP sponsors a la the Intel announcement today,” Prazmark adds, noting that sources have indicated that U.S. chip maker Intel will announce its TOP sponsorship June 21 at a press conference in New York. Details of the deal could not be confirmed by the IOC.
The category for Intel is not clear, though it is expected the company will highlight the chip technologies that can heighten the spectator experience. The company is already using that technology as part of its sponsorship of Major League Baseball.
The shakeup in the Olympic TOP sponsors keeps the number of companies that can utilize the Olympic brand to 13, including Alibaba, Atos, Bridgestone, Coca Cola, Dow, General Electric, Omega, Panasonic, P&G, Samsung, Toyota, Visa and soon Intel.
Written by Kevin Nutley
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