Japanese automotive giant Toyota Group is reportedly planning to step down as a sponsor for the Olympic games according to reports that suggest that i
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Japanese automotive manufacturer Toyota Motor is reportedly set to end its massive sponsorship contract with the International Olympic Committee after this year’s Paris Olympics due to dissatisfaction with the utilisation of funds. The contract, valued at $835 million when it was announced in 2015, has been widely reported to be the largest Olympic sponsorship deal. It included four Olympic events, beginning with the 2018 Winter Games in Pyeongchang, South Korea.
While Toyota declined to comment about financial details, Japanese news agency Kyodo said that the company was not happy with the way the IOC had utilised the sponsorship money. Citing sources, the agency said that the IOC did not effectively use the sponsorship money to provide support for Olympic athletes or to promote sports.
During the 2021 Tokyo Games, which was delayed due to the Covid-19 pandemic, Toyota had pulled its Olympic advertising in Japan over strong public sentiments. The company said that they were responding to public discourse against staging the Olympics and the IOC’s push to hold the event at such a time.
“We have an agreement with Toyota until the Olympic Games Paris 2024,” the IOC said. “We continue to work closely together in preparation for Paris and we look forward to bringing these plans to life.”Toyota is supplying 3,000 fuel-cell vehicles for the Paris Games to show off its green technology.
The IOC generates 91 per cent of its income from selling broadcast rights and sponsorships. The IOC has had an income of $7.6 billion in the last four-year cycle ending with the Tokyo Games. The IOC’s 15 so-called top sponsors provided over $2 billion in funds during that period. The figure is expected to reach $3 billion in the next cycle. “There’s no sports property that touches as many bases as the Olympics in truly every country,” Rick Burton, a sports marketing professor at Syracuse University, told news agency Associated Press. “You have high brand recognition. You just don’t have other sports properties that gives you that,” Burton added.
Burton said the IOC was likely to find another automotive brand if Toyota Motor steps out of the contract. He said that it would be within the IOC’s best interests to find a replacement quickly. In addition to Toyota, the top sponsors are: ABInBev, Airbnb, Alibaba, Allianz, Atos, Bridgestone, Coca-Cola, Deloitte, Intel, Omega, Panasonic, P&G, Samsung, and Visa.
Japan officially spent $13 billion on the Tokyo Olympics, at least half of which was public money, but a government audit suggested the real cost was twice that. The IOC contribution was about $1.8 billion.
The Tokyo Games were mired in corruption scandals linked to local sponsorships and the awarding of contracts. Dentsu, the Japanese marketing and public-relations company, was the marketing arm of the Tokyo Olympics and raised a record $3.3 billion in local sponsorship money, separate from TOP sponsors. French prosecutors also looked into alleged vote-buying in the IOC’s decision in 2013 to pick Tokyo as the host for the Olympics.
First Published Date: 27 May 2024, 18:56 PM IST