What postponing the 2020 Olympics means to brands—and athletes
Sakura Kokumai is no stranger to training alone in her garage.
“In my discipline, in particular, all I need are mats and a mirror,” says the Los Angeles–based athlete, who had qualified to make her Olympic debut this summer as a member of the USA Karate national team.
Her particular discipline, called kata, doesn’t require a sparring partner and is easy to practice solo—Kokumai describes it as a “choreography of punches, kicks, and blocks” with an “invisible opponent.” Still, the past few weeks have upended life for the athlete, even as she’s managed to keep training.
For one, she hasn’t been able to travel to San Diego to work with her strength and conditioning coach due to a shelter-in-place order in California. What’s more, the cloud of uncertainty that, up until recently, hung over the 2020 Summer Olympics in Tokyo was causing Kokumai to feel like she was on an emotional roller coaster. “Us athletes have all been on the same boat, trying not to think about the unknown,” she says.
That’s why, earlier this week, when the International Olympic Committee (IOC) officially announced it would postpone the Games to a date “beyond 2020 but not later than summer 2021,” Kokumai was relieved. “It all made sense, and I was glad they postponed it,” she says.
Even better: Her sponsor, Japanese electronics giant Panasonic—one of the 14 top-tier “worldwide Olympic partners”—is sticking with her despite the decision to delay the Games.
“Now my goal is to reset, to take care of my mental and physical health,” says Kokumai.
Like Kokumai, many other competitors—and their sponsors—were relieved to hear that the IOC had finally made the call to postpone the Summer Games. But they now find themselves in unprecedented territory, scrambling to figure out what the postponement means for their contracts.
“I don’t think any deal I’ve ever done has included any language about ‘pandemics,’” says Lowell Taub, head of sports endorsements at talent agency CAA.
According to Taub, most rookie Olympians have contracts that start 12 to 18 months prior to the Olympics and run through the Games. “Every single athlete and every single deal is individual,” says the longtime agent.
Taub has the luxury of representing top athletes in audience-pleasing sports like surfing and skateboarding. These are big names who have the security of large endorsement deals with lengthy timelines. Relative unknowns don’t tend to get those kinds of deals.
“I’m hoping none of these brands walk away,” says Taub.
Brands might be able to wind down endorsement deals with individual athletes. But the top-tier, global Olympics sponsors have multiyear deals with the IOC, and many have most likely already spent hundreds of millions of dollars on their sponsorship.
“What people often don’t understand is that when you buy an Olympic sponsorship you’re mostly buying rights to intellectual property,” says Michael Lynch, a partner at consultancy firm 3 Emerald Marketing and the former head of global sponsorship marketing at Visa. “You’re buying the five rings—one of the most recognizable symbols in the world.”
According to Lynch, for every $1 a brand spends paying for the actual sponsorship rights, it typically spends an additional $1 to $3 on bringing its marketing campaigns to life.
With most of the “creative”—i.e., television commercials, retail promotions and social media campaigns—set to roll out 100 days before the start of the Summer Olympics, much of that money had already been spent. Now those marketing campaigns, or at least some of them, might need to be completely rethought. After all, they were developed pre-pandemic, in a different global environment.
“You can’t use humor when people are sick and dying,” says Lynch.
Ricardo Fort, VP of global sports and entertainment partnerships at Coca-Cola, says that if any adjustments to the tone of campaigns are needed, his team is well positioned to make them.
“We are tracking consumer behavior, and we are going to do it in an even more detailed way as this situation evolves so that we can reflect the mood in our messaging,” says Fort. “Because of the flexibility of digital platforms, we will be able to adjust.”
Fort says that when it comes to anything already shot for online video or television, the messages are “timeless.” Still, he says, “this is a moving target, and we will wait for the end of this situation to reassess.”
Coca-Cola has sponsored every Olympic event since the 1928 Games in Amsterdam, and the company’s current contract with the IOC runs through 2032. (Typical Olympic sponsorship deals run at least four years and cover two Olympic Games.) But Fort says that the IOC has been “very reasonable” in accommodating those companies whose deals were set to expire in 2020. “It’s the 2020 Olympics but happening in 2021,” says Fort. “So all the rights roll over.”
Coca-Cola was a sponsor the last time an Olympic event didn’t take place as planned—in 1944, when the Games were canceled because of World War II. But Airbnb, which didn’t even exist until 2008, is a newcomer to the (pricey) world of Olympic sponsorships.
Last year, the online marketplace for short-term rentals announced a nine-year, five-Games partnership with the IOC, a sponsorship deal that aims to “create a new standard for hosting that will be a win for host cities, a win for spectators and fans, and a win for athletes.”
As part of the deal, Airbnb was slated to launch a new program called Airbnb Olympian Experiences early this year. This would have enabled Olympians to earn direct revenue by offering fans the chance to train with them or to explore the streets of Tokyo, all booked via Airbnb.
It’s not clear how much Airbnb had already spent on crafting this new program—nor exactly how much it is paying to be an Olympic sponsor. The company declined an interview, but a spokesperson sent along this statement: “There’s nothing more important than public health. We support the IOC’s decision and our community stands ready to support the Olympic and Paralympic Games in Tokyo in 2021.”
Indeed, despite the complications—and potential financial losses or added expenses—that postponing the Games has created, most brands and athletes seem relieved that the 2020 Olympics will not take place as planned. As for 2021, they have high hopes that the Games will be even more meaningful, not to mention lucrative, than ever.
“If the Olympics get this right, this could be a perfectly timed global celebration of togetherness and competition,” says CAA’s Taub. Lynch, the marketing consultant, agrees: “What the virus has taught us is how small the world really is,” he says. “The importance of the Olympic message, bringing the world together in peace, is now more relevant and compelling than ever before.”
Kokumai is also optimistic. “This extra year will be that year where I grow as a person and as an athlete,” she says. “I’m sure the kata I perform next year will be better than the kata I would have performed this year.”
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