Deloitte has renewed its sponsorship of the U.S. Olympic Committee through the 2020 Tokyo Games after walking away from talks over a worldwide marketing rights deal with the International Olympic Committee.
The renewed domestic relationship indicates the IOC has set aside hopes of signing a global sponsor in the professional services category, Olympic marketing experts said. It would be highly improbable that another firm would bite while the U.S. market is locked up. The IOC declined to comment.
Late last year, the USOC opted out of the second half of an eight-year deal first signed with Deloitte in 2012. At the time, the IOC was in talks with Deloitte, Ernst & Young and PricewaterhouseCoopers about possibly joining the TOP (The Olympic Partner) program.
But sources said Deloitte left the IOC discussions in December after the talks’ momentum stalled, and an Ernst & Young executive said he’s still waiting to hear more from the international body. PwC declined to comment.
A full-fledged sponsorship may not be in the cards, but the IOC is still hoping to strike a limited deal with a major global accounting firm for strategic advisory services. Those would be project-based and not include any category marketing exclusivity, sources said.
Doug Neff, Deloitte’s senior manager of U.S. Olympic programs, said the firm is happy to renew with the USOC, but would not elaborate on the IOC talks. Renewing with the USOC took less than a week once the sides returned to the table, which sources said likely happened only after the IOC gave permission. USOC Chief Marketing Officer Lisa Baird declined to discuss talks with the IOC.
“We had a gentlemen’s agreement that we would re-engage, should the IOC not proceed,” Neff said. “We loved the deal. It was a great deal. There’s no reason for either of our sides to terminate it. [The opt-out] was just driven by macro-level things going on.”
Historically, the professional services category is sold by national Olympic committees or specific Games organizing groups. But in a memo written in early 2015, IOC executives said they wanted their own all-purpose firm to assist with internal reforms and to standardize back office operations from Games to Games.
After a meeting in Malaysia with Deloitte, Ernst & Young and PwC last August, talks went nowhere, multiple sources said. The reform agenda is still in place, and in December, the IOC executive board approved a plan to audit all member sports federations and national Olympic committees.
Ernst & Young remains interested, but it’s not clear whether the IOC still wants to proceed. Deloitte could also still pursue a scaled-down provider contract without affecting its USOC sponsorship.
“Now we are still waiting for the IOC to confirm if they will move along with this plan or not,” said Alexandre Rangel, a Brazil-based partner at Ernst & Young, already a sponsor to the Rio 2016 organizing committee. “We are very interested in this, but we will have to see what the economic fundamentals are that the IOC would put into a proposal.”
This is the second time in six years the IOC has considered adding professional services to the TOP program. In 2010, the body turned down offers from Deloitte and another unknown firm. Then, Timo Lumme, IOC director of television and marketing services, said the business was better served by keeping the category local.
The USOC-Deloitte extension hews closely to its prior arrangement. In exchange for value-in-kind services and an unknown amount of cash, Deloitte receives the marketing rights to the Olympic rings in the United States, designation as an official Team USA sponsor and access to the USA House at Pyeongchang, South Korea, in 2018, and Tokyo in 2020.
Deloitte’s work for the USOC is mostly long-term strategic advice for the nonprofit, including how to find more efficient ways of using its commercial revenue to generate medal-winning athletes.
Neff said Deloitte and the USOC are still finding new ways of working together. “I think we’re in the shallow end of the pool personally, but we’ll learn more as we go down this path together,” he said.
While the Deloitte renewal is a positive step for the USOC, the committee still has 16 sponsors it must replace or re-sign before their deals expire later this year.
Only nine have committed through 2020, including career services provider Adecco and Paralympics sponsor and disability insurance partner The Hartford.
“We’re excited and we’re hoping to have some more good news in the near future,” Baird said. “We set up a strategy of renewals, and we’re really on pace to announce some more good news.”
