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June 16, 2017updated 23 Dec 2021 12:10pm

McDonald’s pulls out of Olympics sponsorship deal three years early

McDonald’s, the largest fast food chain in the world has ended its sponsorship deal with the International Olympics Committee (IOC) three years early.

The partnership between the IOC and McDonald’s was first established in 1976.

As a “Top Partner,” the fast food giant typically generates $100m for the IOC, the body that runs the world’s biggest sporting event, over each four-year Olympic cycle.

“Its never good to lose a notable sponsor,” Ivan Feinseth, chief investment officer at Tigress Financial Partners, a New York-based investment bank told Bloomberg. “This is like getting a divorce.”

McDonald’s said on Friday that it was “reconsidering all aspects of its International Olympics Committee business” as part of a plan to re-invigorate its business.

The IOC said it understood “that McDonald’s is looking to focus on different business priorities,” in a statement.

“For these reasons, we have mutually agreed with McDonald’s to part ways,” added the IOC. “The financial terms of the separation was agreed by all parties, details of which are confidential.”

Other factors played a role in breaking up the partnership between the IOC and McDonald’s, including concerns surrounding the link between fast food and obesity.

“The brand relevance is simply not there anymore,” Patrick Nally, who in the 1980s helped the IOC construct its sponsorship model said in an interview. “At every games you see a storm of criticism in the media about McDonald’s being present at the Olympics, and that’s just gotten worse.”

The restaurant chain is the latest US company to abandon its sponsorship of the games in the past two years, joining the likes of Budweiser, Citi, Hilton, and AT&T.

Losing so many American sponsors has forced the IOC to focus on acquiring financial support from Asia.

In January, the IOC announced an agreement with Chinese e-commerce giant Alibaba to sponsor the next six Olympics.

The deal is expected to generate at least $600m.

McDonald’s partnership with the IOC will be terminated immediately, but the fast food chain will continue to sponsor the Olympic Winter Games in PyeongChang, Korea next year.

“The company will deliver its Games-time operations, including restaurants in the Olympic Park and the Olympic Village,” McDonald’s said in a statement.

The next Olympics will take place in Japan during 2020.


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