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McDonalds ends 40 years of Olympic sponsorship

Penny Brooks

18th June 2017

McDonald's are focusing their efforts on its core business, with a mix of lower costs and investment in in improving food quality, restaurant service and online ordering. One part of this is withdrawing their sponsorship of the Olympics three years early - they have been major sponsors of the International Olympic Committee (IOC) since 1968 and the current deal was due to run to the end of the 2020 games in Japan, but will end with the 2018 Winter Games in South Korea instead.

Reuter's offer a variety of reasons, on top of McDonald's desire to cut costs. Firstly, the Games no longer get the TV audiences that they once did, as more people follow on social media instead - Comcast said that in the US. the Rio games last year were watched on NBC by 8.6% fewer viewers than the London games in 2012.

Secondly, the next three games all take place in Asia so may attract fewer US sponsors and viewers.

Thirdly, the IOC are reported to be asking major sponsors to double the amount they pay to support the games; although the amount paid is not disclosed, it is believed to be $100mn for a 4-year cycle now. 

Next, there are issues around the ethics of sports events being sponsored by producers of 'unhealthy products' like fast-food and fizzy drinks (Coca Cola are also a major sponsor). 

Finally, there has been a change to a rule that imposed a marketing blackout for companies that sponsor athletes rather than the event itself. Reuters reports that John Lewicki, who oversees global Olympic sponsorship deals for McDonald's, said last year the company would reevaluate its Olympic relationship in the light of that change, so they may now feel that more targeted sponsorship of individual athletes would be more effective than blanket sponsorship of the whole event. 

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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