After 41 years of marriage, the Olympics and McDonald’s will take different paths forward. The news came like a bomb in the sports marketing business.
Let us first focus on this bullshit called ”mutually agreed” termination.
Read this two quotes from the press release:
”In today’s rapidly evolving business landscape, we understand that McDonald’s is looking to focus on different business priorities. For these reasons, we have mutually agreed with McDonald’s to part ways”, said Timo Lumme, Managing Director of IOC Television and Marketing Services.
”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”, said McDonald’s Global Chief Marketing Officer Silvia Lagnado.
Just… no. They may agree that they do not agree. Nothing more.
Will the IOC have a backup partner?
There can be one main reason for why a rightsholder like the IOC terminate such a contract as this with McDonald’s – and that’s if they already have someone who can replace them with more money.
But that’s not the case here. A competitor to McDonald’s wouldn’t pay so much more than McDonald’s, it’s not worth the risk and surely not the work to get another company through the media clutter.
All (other) TOP Partners have agreements through to 2020, with Bridgestone, Panasonic and Toyota through to 2024, Alibaba through to 2028, and Omega through to 2032.
McDonald's fast food fit with Olympic health values was often criticised by media, now media howling no more big macs at press centre
— Michael.R Payne (@MichaelRPayne1) June 16, 2017
Could it be a political statement?
There is more likely that this is a political statement from McDonald’s (read: I’m not saying it is, but it’s more likely).If I worked at the FIFA marketing department, I should be a little bit nervous about the fast-food contract that will display the company in questioned World Cups as in Russia and Qatar.
If I worked at the FIFA marketing department, I should be a little bit nervous about the fast-food contract that will display the company in questioned World Cups as in Russia and Qatar.
And please note that McDonald’s will never say that it is a political statement (if it is). In four decades they have been a part of the Olympic development and decisions, so saying the IOC is ”developing in the wrong” way will implicitly mean that they didn’t care during the last years.
Business trumps someone else’s legacy.
Athletes' hearts around the world are breaking as McDonald's and IOC terminate partnership. No more 24hr service in Olympic village.
— Michelle Sammet (@michellesammet) June 16, 2017
Will Intel take the leap?
However, for the IOC Marketing department, the rumor says Intel will take a step upwards to become a TOP Partner.
According to SportsBusiness Global, ”the question over Intel’s exact category definition has been at the forefront of negotiations for nearly a year with drones and virtual reality both possible components of a deal”. And keep in mind that the IOC already has numerous other tech-partners, including Samsung, Panasonic and Alibaba.
Intel will have a press conference on June 21, but it’s not confirmed that it will be about the Olympics.
Will Average Joe care at all?
But let us head back to McDonald’s decision one last time, because I want to note that the timing is logical. The next three Olympics will be held while McDonald’s largest market (America) are asleep.
Maybe Pyeongchang, Tokyo and Beijing was a brilliant move in the long-term, efficiently work the growing Asian market, but it might have fastened this decision.
”The IOC has three sturdy hosts lined up next, but you can see the cracks spreading. They needed to go back to Beijing for the second time in 14 years, which looks desperate”, wrote Cathal Kelly in a read-worthy column.
”McDonald’s departure is just the latest signal that the Olympic operation is in decline, along with the benefit to being linked with it.”, he adds.
As a sponsorship nerd, it will also be interesting to see how McDonald’s brand recognition and brand values will (maybe) change – in context with the Olympics. I’m sure we sports marketers overestimate what ”Average Joe” thinks about sponsors and rightsholders.
(And I don’t blame them…)
I promise you a very, very large share of the population will still think McDonald’s is an Olympic (TOP) partner for many, many years. And for all the National Olympic Committees, the food category will easily be filled with local partners. So by the end, it’s no big deal for a big meal.// Magnus Berglund
Want more? Subscribe to SportsBizTrends.com newsletter!
Join tons of sports professionals from all over the world. Receive handpicked trends and topics from the sports business and sports marketing industry.