McDonald's, one of the highest tier global Olympic partners, has ended its sponsorship agreement three years early.
McDonald's has been an Olympics sponsor for 40 years and the deal was due to run until the 2020 Games. It will continue to partner the PyeongChang 2018 Winter Games where is will only activate marketing within Korea, but will not be a part of the Tokyo 2020 Games.
The move is a massive shift for McDonald's which has invested millions of dollars globally on Olympics marketing activity.
McDonald's Australia is also a partner of the local Australian team. It's not yet clear exactly how the move affects this partnership, but it's likely to also come to an end.
It's not clear what the end of the deal will mean for McDonald's marketing budgets and whether the previous budgets flagged for Olympics activity will be funnelled into other areas or cut from the bottom line.
The deal is thought to be around US$100 million for each four-year Olympic cycle which covers the Summer and Winter Games.
For the 2016 Rio Games, DDB Australia developed a number of tongue in cheek campaigns that celebrated “non-athletes”.
It also developed a range of novelty sportswear in partnership with We Are Handsome.
Both parties have caught flak in recent years for the sponsorship, with many criticising the International Olympics Committee for allowing a fast food brand to align with the sporting event.
The IOC says it has no immediate plans to appoint a direct replacement in the retail food operations sponsorship category and it will “review the category in the broader context of existing Olympic marketing programmes”, suggesting that it may move away from fast food vendors.
McDonald’s says it is looking for focus on different business priorities and that the split is “mutual”.
Steve Easterbrook, a former McDonald's marketer took over as global CEO in 2015 and had been on a mission to “reset” the business and improve its performance.
McDonald's global CMO Silvia Lagnado, who also took on her post in 2015, says: "As part of our global growth plan, we are reconsidering all aspects of our business and have made this decision in cooperation with the IOC to focus on different priorities."
“We have been proud to support the Olympic Movement, and we thank our customers and staff, the spectators, athletes and officials, as well as the IOC and local Olympics Games organising committees, for all of their support over the years.”
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