Olympian effort pays off for Tokyo sponsors

By Rob Pearson / Stephen Bradshaw - Teneo Sports Advisory?

In spite of huge challenges posed by the pandemic, and the $20 billion bill, research shows it was worth brands throwing their weight behind this year’s Olympic Games

The truth is that the Olympics does not need fans to be commercially viable, as more than 90 per cent of revenues come from the sale of broadcast rights and sponsorship.

Against the odds, and despite the ongoing Covid-19 pandemic as well as mass disapproval among the Japanese public, the Tokyo Olympic games were delivered. But at what cost?

In a purely financial sense, it cost $20 billion to hold the event, making it the most expensive games in history. Part of this can be chalked up to the considerable expense of postponing it for a year, but much of the outlay was sunk into infrastructure and stadium development, with little or no comeback or pandemic insurance cover.

For this reason the Tokyo Games were almost too big to fail, and the International Olympic Committee (IOC) was bullish in its resolve that the show would go on. It did, albeit with empty stadiums and not a single dollar recouped in ticket sales.

The truth is that the Olympics does not need fans to be commercially viable, as more than 90 per cent of revenues come from the sale of broadcast rights and sponsorship. It is the most viewed sporting event in the world; every Olympic Games since 2004 has attracted an average of 3.5 billion viewers.

With almost half the global population tuning into the Games, TV broadcast rights are a lucrative source of revenue for the IOC. NBC’s $7.75 billion purchase of broadcast rights for three Olympic Games makes it the IOC’s biggest benefactor.

There were 14 global sponsors, known as the Olympic Partners (TOP) sponsors, all of whom paid in excess of $100 million per Olympic cycle. This contributed $2 billion in total. A further 68 local Japanese sponsors added $3 billion to the pot.

Added to this, every domestic Olympic federation, including the Olympic Federation of Ireland, partnered with brands looking to align themselves with the games.

With big sponsorship fees come big expectations from brands that they will yield a decent return on investment. Every business will use sponsorship for different reasons, some for fame and others more discreetly for employer brand or corporate hospitality.

Teneo’s Sports Advisory team polled over 300 Irish sports fans to gauge their attitudes towards the games, and to discover which brands stood out. Just under 90 per cent of respondents tuned into the games, yet time zone differences posed a major challenge. Only 19 per cent of respondents tuned in live, and overall viewership figures in Ireland were below those for Rio 2016 or London 2012.

Despite this, unprompted sponsorship awareness levels were high for many of the Olympic’s biggest sponsors. When asked to name any global sponsors, the top five chosen were Samsung (16 per cent), Visa (16 per cent), Coca Cola (13 per cent), Toyota (13 per cent) and Omega (10 per cent).

The survey then put forward a number of major brands, some of which had sponsored the games and some of which hadn’t, and asked which of those listed were global Olympic sponsors. Many respondents were able to identify main contributors, leading with Coca Cola (59 per cent), Visa (36 per cent), Toyota (36 per cent), and Samsung (28 per cent).

Interestingly, there were a number brands credited as being Olympic partners despite having no affiliation with the games. These brands included MasterCard and TikTok, which enjoyed prompted awareness levels of 39 per cent and 34 per cent respectively.

Team Ireland sponsors also enjoyed high levels of sponsorship recall, with Circle K (58 per cent), FBD (49 per cent) and Indeed (22 per cent) topping the list of official sponsors when it came to brand recall.

Circle K, which sponsored RTé’s coverage of the games, was also credited by 15 per cent of respondents as being a global sponsor, which demonstrates the impact of its forecourt activations and ownership of RTé’s coverage.

Again, we witnessed brands without an affiliation to Team Ireland, such as An Post, successfully capitalising on the public’s enjoyment of the games. A third of respondents identified the brand as a Team Ireland sponsor despite the fact that it did not officially partner with the team. One can imagine that the brand’s gold post box in Portland Row to celebrate Kellie Harrington’s homecoming played a role.

Every Olympic Games, we see the rise of new superstar athletes. With global success comes earning potential and the better the performance, the greater this potential is.

Harrington, Paul O’Donovan and Fintan McCarthy, Ireland’s gold medal winners, all stand to benefit from six-figure personal sponsorship deals. Harrington’s earning potential probably eclipses that of O’Donovan and McCarthy due to the particular lure of professional boxing.

The Tokyo Games will always be known as the pandemic games, asking unprecedented questions of its organisers, athletes and sponsors. The organisers of the Paris 2024 games are focused on becoming the first ever sporting event to mitigate climate change, seeking to close the door on a cycle marred by Covid-19 concerns and open the door for brands and organisations with environmental agendas.

The upcoming Winter Olympics in Beijing will remain under pressure to put athletes’ safety first while the pandemic lingers. Nevertheless, the impact of sponsorship of the games, even during Covid-19, has been proven, and brands looking to activate around the event will be buoyed by that.

With a condensed three-year cycle until the next summer games, and the hope of an event free of pandemic restrictions, Paris 2024 is an appealing commercial prospect for the IOC, the competing nations and the thousands of athletes all looking to stand out from the crowd and catch the attention of potential sponsors.

As appeared in the Business Post 12/09/21