Home Stocks McDonald’s Follows New Global Growth Plan, Ends Olympic Sponsorship after 41 Years

McDonald’s Follows New Global Growth Plan, Ends Olympic Sponsorship after 41 Years


McDonald’s (MCD) broke the news on Friday that the fast good giant will end its 41-year sponsorship with the International Olympic Committee (IOC). The end of the sponsorship is part of the company’s new “global growth plan” and comes three years early.

The company said they reviewed their marketing plan and spending prior to making the decision.

Chief Marketing Officer Silvia Lagnado states that it was time for the company to rethink their marketing strategy. The company made the decision to abandon their spot as the only food sponsor for the IOC in cooperation with the IOC.

No immediate replacement for the sponsorship is in the plans, according to the IOC.

Terms of the agreement to break the contract have not been disclosed at this time. McDonald’s choice to abandoned the contract three years early is likely to come with some form of monetary punishment from the IOC.

McDonald’s has been an Olympic sponsor since 1976 and has been a top sponsor since 1996. The company chose to join the professional association to increase brand awareness. McDonald’s isn’t the first company to abandon their sponsorship.

AT&T, Budweiser, Hilton and Citi are all big-named companies that chose not to extend their partnership with the IOC.

“In today’s rapidly evolving business landscape, we understand that McDonald’s is looking to focus on different business priorities,” states Timo Lumme, managing director of Television and Marketing for the IOC.

McDonald’s first airlifted hamburgers to Olympians in 1968 in France.

The company plans to maintain their presence at the 2018 Winter Games, operating their restaurants at Olympic Village and Olympic Park for the final time. The company has rights to market only in Korea at the PyeongChang Winter Games.

Analysts suggest that U.S. viewers may be to blame for the company leaving their sponsorship. Experts speculate that advertisers may be less inclined to participate in the 2018 Olympics in Korea and in the Tokyo 2020 Summer Games. Beijing will also host the 2022 Winter Olympics.

Several sponsors with the IOC have signed agreements through 2024, with Omega signing an agreement through 2032 and Alibaba signing on as a sponsor through 2028.

McDonald’s resigned their sponsorship agreement in 2012 and was contractually obligated to the agreement through 2020. The company has since changed leadership, with CEO Steve Easterbook trying to trim costs by as much as $500 million by the end of 2018.

The company plans to trim additional costs in 2019 and has changed their menu to include breakfast items all day to lure in more customers.