Why did McDonald’s end its Olympic sponsorship?
Joining Budweiser and other major advertisers, McDonald’s has ended its a 41-year run as a sponsor of the Olympics.
The fast-food chain’s contract was scheduled to last through 2020. Others not renewing their sponsorships following the Rio games include Budweiser, Citi, Hilton, TD Ameritrade and AT&T.
“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 (International Olympic Committee) to focus on different priorities,” Silvia Lagnado, McDonald’s global chief marketing officer, said Monday in a statement.
McDonald’s first Olympic appearance was at the 1968 Winter Games in Grenoble, France, when burgers were airlifted to U.S. athletes homesick for McDonald’s food. The sponsorship began with the 1976 Montreal games.
Beyond geopolitical concerns, among the reasons seen for McDonald’s opting out:
- Asia time-zone: With the 2018 Winter Olympics in Pyeongchang, South Korea, the 2020 Summer Olympics in Tokyo and the 2022 Winter Olympics in Beijing, the next three events won’t hit prime-time live coverage in North America.
- Olympics Not Paying Off: The games may not be providing the payback they once did. Television audiences began shrinking with the Beijing games in 2008. During the Rio games, many followed the events on social media, such as Facebook and Twitter. Wrote Reuters, “Some companies find it is much cheaper to work directly with athletes or specific countries than the IOC.”
- Fast-food mismatch: Despite its increasing emphasis on healthier options, McDonald’s core offerings land far off most dietitian’s recommendations. British sports marketing expert Patrick Nally told AFP, “The scale of obesity and diet-related disease around the world is alarming, and although we can’t put this at McDonald’s door they must be aware that sponsoring the Olympics has now become ‘illogical’ and even in many ways ‘counterproductive.'”
- Cost-cutting: McDonald’s is seeking to reduce costs by $500 million by the end of 2018 while investing in its food quality and technology, including in-store kiosks and mobile ordering.
To make up for non-renewals, the IOC has reached new deals with Alibaba, Bridgestone and Toyota, and is set to land a major deal with Intel.
- IOC And McDonald’s Mutually Agree To End Worldwide Top Partnership – IOC/McDonald’s
- Intel To Announce Global Sponsorship Deal With The IOC, Sources Say –Sports Business Daily
- McDonald’s ends Olympics sponsorship deal early – Reuters
- McDonald’s Exits Longtime Olympics Partnership – Advertising Age
- McDonald’s shuts up shop on Olympic support – Yahoo/AFP
- Why Budweiser Backed Out of the Olympics – Advertising Age
DISCUSSION QUESTIONS: What do you think is the primary reason McDonald’s ended its sponsorship deal with the Olympics? Will they regret the decision?