Olympic Sponsorships Face Difficulties Ahead of Games

Spectators Banned from Tokyo Games

Japanese companies, including Asahi Breweries and Toyota (TM), have collectively spent $3 billion to advertise during the upcoming Summer Olympic games in Tokyo. They envisioned stadiums full of potential consumers. But now that spectators are no longer allowed at the events, advertisers are in a difficult position.

Global companies which have multi-year contracts with Olympic organizers should be able to weather the storm, but local Japanese sponsors are pouring money into a one-time event. They will not have an opportunity to make up for losses at future Olympic Games.

Disappointment for Sponsors

Nippon Telegraph & Telephone was gearing up to showcase its augmented reality technology via live demos at the Olympics, while Toyota had plans to show off its green vehicles. Now only employees and those participating in the games will be able to experience these displays of new products.

Asahi, which paid $135 million for the most expensive tier of sponsorship at the Olympics, had envisioned stands full of people drinking its beer. It is now coming up with ways to promote its beer to spectators watching the games at home or in bars. Meanwhile, sponsor KNT-CT, one of Japan’s largest travel agencies, had planned to provide clients with tour packages to the Olympic Games.

Olympics’ Image May Be Tarnished

Headlines about rising COVID-19 cases in Japan are hurting the Olympics’ reputation and causing backlash among Japanese citizens. A recent poll found that more than two-thirds of people living in Tokyo were worried the games would bring new variants of COVID-19 to the city.

The pandemic has caused innumerable challenges for the Summer Olympics. The decision to ban spectators was a blow for sponsors. However, sponsors are now finding creative ways to rapidly adjust their plans ahead of the games.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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