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Volume 24 No. 135

Marketing and Sponsorship

McDonald's is ending its longtime partnerships with both the IOC and USOC "effective immediately," according to Jessica Wohl of AD AGE. The QSR has sponsored the USOC since '76 and has served as an IOC TOP sponsor since '96. McDonald's and the IOC claim they "mutually agreed" to end the deal. However, Wolh reports McDonald's "changing marketing strategies and business goals appear to have sparked the decision." McDonald's plans to "operate Olympic Park and Olympic Village restaurants one last time" at the '18 PyeongChang Games. McDonald's "remains a sponsor" of that event, but has "rights to do marketing in Korea only." The IOC has "yet not named a replacement sponsor in retail food operations and said it has no immediate plans to do so." McDonald's is the "latest sponsor to walk away from the Olympics." Earlier this year, A-B InBev's Budweiser "ended its sponsorship of the U.S. Olympic Team after a 32-year run." Citi, Hilton, TD Ameritrade and AT&T have also "exited their Olympics sponsorships in recent months." McDonald's in '12 "extended its Olympics sponsorship" through '20, but the brand is trying to cut costs by $500M by the end of '18 and "plans to trim costs even further the following year" (, 6/16).'s Nick Zaccardi notes McDonald's gets "plenty of Games-time buzz for it's athletes' village store, where athletes can get food for free." Gold Medal-winning sprinter Usain Bolt "wrote that he ate 1,000 chicken McNuggets" during the '08 Beijing Games. McDonald's during the '12 London Games "opened the largest freestanding restaurant in the world" -- a 32,000-square-foot facility that had two floors (, 6/16).

Intel is close to announcing a nine-figure global sponsorship deal with the IOC, according to sources, marking the tech giant’s most ambitious step yet in its two-year-old strategy of using sports to market the user experience it powers instead of the microprocessors it sells. Terms are not yet known, but membership in the IOC’s TOP sponsorship program sells for roughly $200M for a four-year cycle, mitigating the loss of McDonald’s from the program announced on Friday. It includes worldwide rights to use the Olympic rings, sponsorships of national Olympic teams and extensive hospitality and activation assets at the Games themselves. Intel’s exact category definition is unclear, and one source said that question has been at the forefront of negotiations for nearly a year. Drones and virtual reality were two possible components of a deal, sources said. It is a crowded space -- the IOC already has several other technology partners, including Samsung (wireless communication equipment and computing equipment), Panasonic (audiovisual equipment), and Alibaba Group (cloud computing). Also, organizers of the upcoming Olympics in South Korea and Japan have signed their own tech partners to domestic deals. Intel CEO Brian Krzanich has been a personal driver of this deal and has insisted that it start in ‘18, a source said, seeing the PyeongChang Games as an inflection point for technology and sports because of Korean telecom provider KT’s plans to showcase 5G technology there. Intel has scheduled a press conference in N.Y. for next Wednesday. It did not disclose the topic, but included the Olympic rings in its note. Intel did not respond to questions and the IOC declined comment.

TIME IS OF THE ESSENCE: Time is short for Intel if it hopes to activate at the Games in eight months. Major sponsors have booked hotels and are in the detailed planning stages for hospitality/activation programs that often involve hundreds of people and staff. Intel is already seeking agencies to help it build a plan around PyeongChang and the ’20 Tokyo Games, sources said. For the IOC, Intel is the second new global sponsor added in just six months, following the blockbuster deal with Alibaba announced in January. It is the fourth addition in an entirely new category at the global level since ‘14, adding new financial stability in an era of rapid change for the Olympic movement and some of its longest-tenured sponsors The deal is also a boon to the USOC, which gets 20% of IOC deals. The IOC’s sponsorship portfolio is evolving as its commercial division seeks sponsors that are willing to support the IOC’s major strategic initiatives as well as market their wares. Since ‘15, Intel has done sports sponsorship deals with the X Games, the PGA Tour, MLB and NBA All-Star Games and the Super Bowl. Its marketing with those properties has demonstrated its role in VR, 360-degree replay technology and advanced analytics. It also recently signed a major technology sponsorship with esports tournament organizer ESL.

The loss of longtime Olympics partner McDonald’s may generate unpleasant headlines for the IOC, but it is not as damaging as it may appear out of context. There’s clearly still demand for the global rights packages offered by the body, which believes globalization and technology has greatly expanded the range of categories that can be sold globally. Since the IOC nearly doubled the price of a sponsorship in ‘14, it has signed four new partners in entirely new categories: Bridgestone (tires), Toyota (mobility), Alibaba (cloud computing and e-commerce) and Intel (unknown, pending a formal announcement Wednesday). The IOC said it is on track to set a new high mark for sponsorship in the current cycle ending in Tokyo. However, the partners whose current relationships predate the price increase (roughly $100-200M per quadrennial, though specific categories vary substantially) must reconsider the value they are receiving as they decide whether to renew, said London-based agency Synergy CEO Tim Crow. McDonald’s was one of six IOC partners whose current contracts pre-date the price hike and expire in ‘20. The others are GE, P&G, Dow Chemical, Visa and Coca-Cola. The other eight TOP members have all renewed or signed since the price hike. “All of these brands are going to be looking at that scenario, and making a decision about whether the additional investment they’re going to require is going to generate a bigger incremental return,” Crow said. “That’s really where the Games are at right now."

QSR HAD LACKED A CLEAR MESSAGE: Crow noted McDonald’s is unlike other brands because it seemed to lack a clear message for its Olympics campaign and did so little to activate in recent years. The IOC’s willingness to break off the relationship three years early was a strong indication of its own ambivalence toward the relationship, he said. “Losing [McDonald’s] is bittersweet, because on the one hand, they weren’t doing anything with it,” Crow said. “But on the other hand, is someone going to market the Games to the young, and young families? Because that’s a big thing they need." Even if financially the portfolio is strong, the Olympics will miss the mass-market, middle-class marketing prowess of the QSR, he said. But the IOC is reconsidering its entire approach to its partnerships. It has been more concerned with signing deals with companies that can power major IOC strategic initiatives as well as market their goods -- like Alibaba and Intel -- indicating food may be sold only at the domestic and individual Games level in the future. It said Friday it will not try to replace McDonald’s in the restaurant category.

NASCAR driver Jimmie Johnson has "signed a three-year contract extension that will keep the seven-time champion" at Hendrick Motorsports through '20, while Lowe's has "signed an extension" to stay on Johnson's No. 48 Chevy through '18, according to Dustin Long of Both contracts were "set to expire" after this season. Lowe's has "served as Johnson's sponsor at Hendrick since he drove three Cup races" in '01. Johnson began running full-time in '02 (, 6/16). SPORTING NEWS' Arthur Weinstein notes the Hendrick Motorsports/Johnson/Lowe's relationship is "one of the most successful and iconic partnerships in NASCAR history." Johnson won his record-tying seventh NASCAR Cup championship last season, and is a "threat to win again this year, with three wins already this season." With 83 career Cup wins, Johnson is tied with Cale Yarborough "for sixth on the sport's all-time victory list" (, 6/16). Meanwhile, Johnson on Friday said that his three-year contract extension "might not be his last one." The 41-year-old said that he could "see himself racing beyond" '20 (, 6/16).

Bulls G Dwyane Wade continues to make inroads in the fashion industry, as he has lines for "ties, socks, underwear, shoes and athletic apparel, and that’s not including his recent capsule collection collaboration with DSquared2," according to Rohan Nadkarni of Each line is "carefully put together before it hits the market." Wade has a signature shoe with Li-Ning, and he discusses with Portland-based designer Eric Miller "silhouettes, materials and more before Miller comes back with a look for the shoe." For everything else Li-Ning, including his lifestyle shoes and apparel line, Wade "works diligently with a team in China, where he is immensely popular." One of Wade’s "most successful accessory lines" is Stance Socks line. Stance Socks Exec VP/Business Development Clarke Miyasaki said that Wade was at the "top of their list when the company wanted to partner with an NBA player." Nadkarni noted Wade "begins the design process 13 to 16 months before the collection will hit stores." The two parties will typically go "back and forth a few times before the designs are settled, with the ultimate goal being to reflect Wade's style." Wade has "earned respect within the fashion world," though he "insists he has a long way to go before you can wear a Dwyane Wade suit" (, 6/14).

In N.Y., Micah Maidenberg notes Nike "is not giving up on its physical stores" despite move its focus more toward online shopping. The company will use its stores to try to "foster relationships with customers and further link the shops to its digital efforts." Nike will also try to "speed up how quickly it designs and works with its suppliers to deliver new gear." The company wants to "cut its product-creation cycle time in half." Retailers have "found success by continually delivering fresh products to its physical and online stores" (N.Y. TIMES, 6/16). CNBC's Sara Eisen said Nike's refocused efforts are "confirmation that growth has slowed down and is slowing at Nike, and that Nike hasn't been fast and adept at keeping up with consumer changes and styles and habits" ("Closing Bell," CNBC, 6/15).

: In Michigan, Edward Pevos noted former NFLer Calvin Johnson "appears in a new ad for the upcoming 'Transformers' movie." In the spot Johnson's Megatron nickname "comes back to haunt him in everyday life." Megatron in the film is the leader of the evil Decepticons. "Transformers: The Last Knight," which was "partially shot in and around Metro Detroit," hits theaters on Wednesday (, 6/15).

In Boston, Olivia Vanni noted last minute Father's Day shoppers can listen to a suggestion from Patriots TE Rob Gronkowski, "give dad a tie made entirely out of dried meat." Gronkowski and Seahawks CB Richard Sherman released videos titled "Father's Day Moments" in "collaboration with jerky company Oberto." In both videos they "explain all the reasons their dads ... deserve the gift of delicious dehydrated cow flesh" (BOSTON HERALD, 6/14).