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McDonald’s ends Olympic Games sponsorship 3 years early

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McDonald’s ends Olympic Games sponsorship 3 years early

Food & Beverage

McDonald’s ends Olympic Games sponsorship 3 years early

US fast-food group and IOC ‘mutually agree’ to end decades-long relationship

McDonald’s has been an official Olympics sponsor since the Montreal games in 1976

McDonald’s has ended its decades-long sponsorship of the Olympic Games, becoming the latest US company to pull support and marking the latest financial blow to the body that runs the world’s biggest sporting event.

On Friday, the International Olympic Committee, the games organisers, and McDonald’s announced they had “mutually agreed” to end their sponsorship deal with immediate effect. The financial terms of the separation have been kept confidential.

The US fast food group’s deal as one of the IOC’s principal global sponsors was due to run until 2020 and typically generates $100m over each four-year Olympic cycle. McDonald’s has been an official Olympics sponsor since the Montreal games in 1976.

The restaurant chain becomes the latest US brand to abandon its Olympic sponsorship in the past two years, following Budweiser, Citi, Hilton and AT&T, which ended their sponsorship of the US Olympic Committee.

In response, the IOC has looked elsewhere for major sponsorship deals, particularly Asia. In January, it announced that Chinese ecommerce giant Alibaba would sponsor the next six Olympics, in a deal expected to deliver at least $600m for the IOC’s coffers.

But the departure of another big-name sponsor comes at a difficult time for the IOC, which is struggling to convince cities to take on the multibillion-dollar costs of staging the spectacular.

Last week, the body moved towards awarding the 2024 and 2028 summer Olympics to Paris and Los Angeles in an unprecedented double vote.

The French capital and the US city are the remaining bidders for the 2024 games, after other potential host cities, including Budapest, Hamburg, Boston and Rome, pulled out citing cost concerns.

Sponsorship and broadcasting revenues are split with the host cities, helping to soften the financial cost of holding the games.

Overall revenues from broadcasting rights and other commercial deals netted the IOC $5.6bn between 2012 and 2016, with roughly 18 per cent of that coming from marketing and sponsorship contracts.

“As part of our global growth plan, we are reconsidering all aspects of our business and have made this decision in co-operation with the IOC to focus on different priorities,” said Silvia Lagnado, McDonald’s global chief Marketing officer.

“In today’s rapidly evolving business landscape, we understand that McDonald’s is looking to focus on different business priorities,” said Timo Lumme, managing director of IOC television and marketing services.

The IOC added that it had “no immediate plans” to find a direct replacement as a food sponsor of the games.

This article has been revised to make clear that Budweiser, Citi, Hilton and AT&T had been sponsors of the US Olympic Committee.

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