When good money goes bad: the IOC, the Olympics and conscious uncoupling

The end of McDonald's Olympic sponsorship was an example of the value of an awkward deal dropping below its difficulty level.

When good money goes bad: the IOC, the Olympics and conscious uncoupling

Arnold Goodman, who served as the chairman of the Arts Council of Great Britain from 1965 until 1972, had some rather bullish ideas about sponsorship and its sources.

“Wherever the money comes from – it can be rolled by the mafia – if it goes to the arts it becomes good money,” said the one-time advisor to British prime minister Harold Wilson.

The logic could as comfortably be applied to sport as to the arts, which occupies a similar space in the public consciousness – generally acknowledged as a wider good for society but also seen as something of a luxury, with public funding of both often viewed with suspicion.

For that reason, sporting bodies have long taken a more or less Goodman-esque approach to sponsorship, largely ignoring worries about the source of money and instead trying to focus on what the funds can help to achieve. It is an issue, however, that the industry at large was required to consider in June as two major sponsorship deals came to a premature end, both of which were, in their way, contentious arrangements.

The sudden end to fast-food giant McDonald’s multi-million dollar partnership with the International Olympic Committee (IOC) after 41 years was perhaps not so shocking as the initial reaction suggested. Although the separation was described as ‘mutual’ in an IOC press release, the phrasing was reminiscent of Chris Martin and Gwyneth Paltrow’s “conscious uncoupling” a few years ago – and the suspicion remains that the break-up was rather more one-sided than that.

The latest deal, signed for eight years in 2012, saw McDonald’s paying a reported US$12.5million annually to the IOC, but it always felt like an agreement that was more beneficial to the restaurant chain than the Olympics’ governing body. At a time when concern and awareness around obesity and healthy eating have been on the increase, McDonald’s has faced an uphill struggle to convince consumers that its food can fit into an active lifestyle. In 2015 and 2016, McDonald’s closed close to 1,200 outlets worldwide amid declining profits, while the fast-food sector as a whole has been plagued by negative press led by the likes of Morgan Spurlock’s 2004 documentary Super Size Me.

Though the Rings and the Golden Arches had been connected since the Innsbruck Winter Games in 1976, the Olympics really became a key part of McDonald’s’ rebranding over the past two decades as it attempted to freshen up its image. For all the salads it introduced to its menu and advertising campaigns it ran about the wholesome origins of its burgers, it also leaned heavily on its Olympic partnership, often pointing to the popularity of its outlets in athletes’ villages as evidence that a Big Mac could be part of a balanced diet. The claim of the world’s fastest man, Usain Bolt, to have consumed more than 1,000 Chicken McNuggets over the course of the Beijing Olympics was possibly the greatest PR coup McDonald’s could have hoped for out of its Olympic sponsorship.

That only held, however, for as long as the Olympics itself remained a positive association. Recent years have seen the IOC’s own brand tarnished somewhat, with the value of its sponsorships declining accordingly, after a series of damaging news headlines. Athletics, the Olympics’ most popular sport, is still embroiled in a doping crisis which looks set to continue into the foreseeable future, while the bungled bidding process for the 2024 and 2028 Olympics – which has effectively left the IOC with one candidate in the running for each Games – represents further bad press itself while also being indicative of a wider malaise.

For the IOC, the McDonald’s funding still represented “good money”, regardless of its source. For McDonald’s, the investment was simply no longer paying off.

In the long term, however, the move may prove a boost for the IOC as well, and not just in cutting away an association that had often forced it on to the defensive. Just days after the dissolution of that partnership was announced, computing giant Intel stepped in to join the elite TOP sponsorship programme with a deal that provides more than just cash. As with Chinese ecommerce giant Alibaba’s IOC tie-up, Intel will help the Olympic body update its output for the 21st century, developing the broadcast offering at each Games through the use of Intel TrueVR, drone cameras and Intel 360 Replay technology.

The conscious uncoupling of the Football Association (FA) from its betting partner Ladbrokes, meanwhile, represents a movement in the opposite direction, and is an even more salient example of a rights holder questioning at exactly what point good money goes bad.

In this column in issue 94 I wrote that, in the aftermath of English soccer player Joey Barton’s suspension for gambling, the FA must now take a look at its own addiction to gambling. That it did with such alacrity was, admittedly, a surprise, and demonstrates that Goodman’s adage is not necessarily always applicable to sports. The case of Barton, among others, left the FA in a position where its own relationship with bookmakers was compromising its integrity and ability to govern the game even-handedly.

We all, of course, believe that sport offers a net positive to society, and to some degree that will occasionally mean turning a blind eye to the sources of funding. Increasingly, however, as the world and the sports industry in particular – despite how it may sometimes seem – continues to move into a more responsible, progressive era, these deals will be held under ever greater scrutiny, by brands and rights holders alike.