What Toyota’s Olympic departure tells us about the present and future of TOP sponsorship

In one of my first newsletters of 2024, I suggested that there were likely to be some changes to the IOC’s TOP programme this year, which will see contracts expire with five of the top-tier sponsors of the Olympic Games.

One of those partners is Toyota, which apparently has no plans to renew its deal with the IOC beyond this year. Kyodo News, the outlet that broke the story, claimed this is because the Japanese car manufacturer does not believe the Olympic body uses sponsorship money effectively to support athletes and promote sports.

All eyes will now be on who could potentially replace Toyota, and whether Atos, Bridgestone, Panasonic and Intel follow the carmaker out the exit door. What they decide could say a lot about the appeal of the Olympics and the future of the TOP programme.

One side of the argument

During the last quadrennial, the TOP partners accounted for approximately 30 per cent of the IOC’s US$7.6 billion revenue, equal to around US$2.3 billion. Toyota alone is reported to have contributed US$875 million over the life of its deal.

For any other sports property, the end of a sponsorship as lucrative as that would be treated as a commercial crisis. But there are still 14 other blue-chip companies currently spending hundreds of millions of dollars to activate their association with the Olympics worldwide.

The amount those sponsors pay is testament to the strength of the Olympic brand and the perceived benefits of being associated with an event that is broadcast free-to-air in most countries, promising to reach billions of people.

Those familiar with the TOP programme therefore don’t view Toyota’s departure as reason to sound the alarm. Ricardo Fort, who previously managed Coca-Cola’s sports sponsorships, told me the changeover of TOP sponsors is “very normal”.

“Relationships such as Coca-Cola’s and Omega’s - the two longest standing partners - are the exceptions, not the rule,” he said.

The other side of the argument

Some onlookers will argue that Toyota’s departure is evidence that the Olympics no longer delivers for partners.

After all, television viewership of the Games has dipped in key markets during recent editions amid a period of media fragmentation that’s changing the way people consume the Olympics. And despite recent efforts by the IOC to modernise the event, including by adding sports like skateboarding and breakdancing, there are concerns that younger fans simply aren’t as interested in the Games as previous generations.

A Covid-hit Tokyo 2020 and geopolitically charged Beijing 2022 resulted in muted sponsor activity, and top-tier partners of the Games have increasingly been challenged to hold the IOC to account over its host selection and handling of various scandals.

More than US$800 million is a lot of money to spend only to tread carefully on activations, and some brands may be starting to believe that other sports properties now represent better value and carry less risk.

The middle ground

The reason cited by Kyodo for Toyota’s departure will do no favours for an organisation that has faced questions about rewarding athletes, but there are likely other factors at play.

Toyota itself has been dealing with its own issues around falsified safety testing of its cars. Perhaps more pertinent, though, is that the company signed its TOP deal in 2015, just two years after Tokyo was awarded an Olympics in the manufacturer’s native Japan, making this a natural time to exit now that event is over.

That logic could also apply to Bridgestone, another Japanese company which partnered with the IOC ahead of a sequence of Olympics in Asia. Panasonic is also headquartered in Osaka, but may be more tempted to prolong a partnership dating back to 1985.

It would be a surprise if Intel were to walk away from the Olympics given it is now using the Games as a testing ground for AI innovations, although the future of Atos’ partnership with the IOC is less certain amid a period of upheaval at the company.

The real answer, then, might lie in what the other brands with expiring contracts choose to do. But even in the unlikely event all five did not extend, the IOC still has ten other top-tier partners locked in until at least 2028.

The future of the TOP programme

The addition of Anheuser Busch InBev to the TOP programme in January was a reminder that the world’s biggest brands are far from giving up on the Olympics. It also showed that the IOC will still embrace traditional sponsorship categories alongside its recent trend towards tech-focused partnerships that support the delivery of the Games.

If its departure is confirmed, Toyota will also vacate the highly competitive mobility category, which will have no shortage of suitors from the automotive industry looking to take centre stage as the world transitions to electric vehicles.

According to Terrence Burns, an Olympic marketing veteran who has worked on numerous winning bids, the challenge for the IOC is to open up new categories while also ensuring it releases enough attractive ones for local organising committees to reach their sponsorship targets.

But Burns also suggests future TOP deals could even move away from the traditional model of categories, which he believes “have reached their limits in efficacy” for sponsors, and instead focus on certain programmes and assets within the Olympic movement, such as the volunteer programme.

In the meantime, though, neither he nor Fort believe the IOC will struggle to fill any gaps that might emerge after 2024.

“The IOC TOP programme has been the most successful global sports programme in history,” Burns said. “Why? Because of the popularity and reverence for the Olympic Games. That isn’t going away, so I imagine there are plenty of global brands who would love to participate if the opportunity arises. The IOC has plenty of options.”

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