July 9, 2021
In just a couple of weeks, athletes worldwide will converge in Tokyo to represent their respective countries in this year’s Summer Olympic games. While it’s a source of national pride to be selected as a host for the games, it does come with a sizeable price tag (the Rio de Janeiro Summer Olympics’ final operating budget totaled $13.1 billion). Host cities look to offset these costs through increased tourism, counting on the thousands of sponsors, media, athletes and spectators that typically visit six months before and six months after the Olympics.
Aside from the impact of the pandemic – and controversies – surrounding this year’s games, sponsorship is typically a win-win situation. It’s a significant revenue source for Olympic teams, allowing the athletes to focus on training without concerns about affording equipment. It also represents an opportunity for the sponsoring brands to gain recognition as leading global players. For the Tokyo Olympics, domestic sponsors contributed a record $3.3 billion in 2019 before the pandemic forced its postponement. With the opening ceremony set for July 23rd, let’s check out a few companies that have become the worldwide brand sponsors of the 2020 Tokyo Summer Olympics.
Airbnb, Inc. (Tii:ABNB) is the official housing partner of the Olympics through 2028. The global online lodging marketplace reportedly paid $500 million for the privilege. The new worldwide partner for the Tokyo Olympics is undoubtedly hoping the global Olympics platform and the rise in leisure travel will combine to offset a dismal 2020 when revenues declined 30% year-over-year. Things are looking somewhat brighter for Airbnb, with first-quarter revenues rising 5%, exceeding not only the same period last year but 2019’s as well.
A worldwide partner of the Olympic Games since 2006, General Electric Co. (Tii:GE) works with host countries, cities and organizing committees to provide infrastructure solutions for Olympic venues. These solutions include power, lighting, water treatment and transportation. The multinational conglomerate also supplies local hospitals with diagnostic imaging equipment and healthcare technology solutions like ultrasound, MRI and electronic medical record technologies to help doctors treat athletes.
An Olympic sponsor since 2015, Toyota Motor Corporation (Tii:TM) is the official mobility partner for the Olympics, providing vehicles, mobility services and mobility support robots for the games. The company is branding itself as a sustainable mobility solutions company for the events. The automaker behind the popular Camry, Rav4, and Lexus brands was not immune to the ravages of 2020. For the calendar year, Toyota Motor North America (the division that oversees operations in Canada, Mexico, and the United States) reported sales of 2,112,941 vehicles, a decrease of 11.3% on a volume basis.
Chinese multinational technology company and e-commerce platform Alibaba Group Holding Limited (Tii:BABA) signed on as a Worldwide Olympic Partner in 2017, leveraging its cloud services, ticketing, and digital media platforms technology to modernize the Olympic experience for the digital era. The company, whose shares are down more than 20% for the 12 months ended July 7, 2021, earned roughly $109 billion for its most recent fiscal year. This total represents a 41% increase year-over-year.
A Worldwide Olympic Partner and the official chemistry company of the Olympics, Dow Inc. (Tii:DOW) plans to leverage its carbon expertise to create tailored mitigation projects to build energy efficiency, packaging and recycling, and industrial applications in the host city. The commodity chemical giant claims its three carbon programs, put in place for the Sochi 2014, Rio 2016 and the IOC programs, have reduced greenhouse gases by more than 5 million metric tonnes of carbon dioxide equivalent.
Television ratings for the Olympic Games wax and wane – particularly in the USA. The 2016 Games underperformed while the New York Times reported that the 2008 Summer Olympics in Beijing was the most-viewed event in American television history with 211 million viewers. However, with the games going strong for 125 years, expect corporations to continue spending millions to associate their brands with Olympic glory.