Sponsors walk a fine line ahead of the Beijing Olympics

Just six months after the Tokyo Summer Olympics, the opening ceremonies for the Beijing Winter Games are scheduled for February 4. Beijing will be the first city to host the Summer Games (in 2008) and the Winter Games. In the United States, the 17-day event will, once again, be televised and broadcast by NBCU and Peacock. With the pandemic underway and similar to the Tokyo Games, the only spectators allowed for the Beijing Games will be from the host country. China has invested nearly $ 4 billion to host the Games.

However, with the Beijing 2022 Olympics approaching, China’s human rights policy requires sponsors to walk a fine line. On the one hand, China’s lucrative market with a population of 1.4 billion, the world’s second-largest economy and a major growth region for brands. On the other hand, the policies adopted by the Chinese government have made traders, under pressure from human rights groups, government officials and consumers, uncomfortable. A recent poll from Pew Research found 67% of Americans have an unfavorable view of China compared to 46% in 2018. This trend is also present in other Western democracies.

In a statement earlier this year, US Secretary of State Anthony Blinken noted, “China uses coercion and aggression to systematically erode autonomy in Hong Kong, undermine democracy in Taiwan, violate human rights in Xinjiang and Tibet, and claim maritime claims in the South China Sea that violate international law. ”

President Joe Biden announced last month that he was considering whether the United States would engage in a diplomatic boycott of the Beijing Olympics in response to China’s human rights violations. A diplomatic boycott, in which no US official attends the Olympics, would enjoy rare bipartisan support. In March, Senator Mitt Romney (R-UT), who had served as chief executive officer of the 2002 Salt Lake City Winter Olympics, wrote a opinion piece in the New York Times

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call for an economic and diplomatic boycott. In May, House Speaker Nancy Pelosi (D-CA) said she also supported a diplomatic boycott. Other Western democracies, including the UK, Canada and Australia, are also considering a diplomatic boycott. With a diplomatic boycott, the athletes would still compete.

In 1980, the United States boycotted 65 countries at the Moscow Summer Games after the Soviet Union invaded Afghanistan. The boycott banned athletes from competing and spectators in attendance. It was the only time the United States did not field an Olympic team. Despite the initial public support for the boycott, it was ultimately seen as ineffective. The Soviet Union then returned the favor by leading a boycott of the 1984 Games in Los Angeles.

The sudden disappearance of tennis player and three-time Olympian Peng Shuai has added to the list of concerns about China. Peng went missing on November 2 after posting online that she had been sexually assaulted by a former government official. His sudden disappearance sparked global alarm with tennis stars Serena Williams and Naomi Osaka, human rights organizations and political leaders speaking out.

While the fate and well-being of Peng Shuai remained unknown, the International Olympic Committee, the governing body of the Olympics, had clearly remained silent and then asked “”quiet diplomacy”. The IOC’s late response drew much criticism. On November 21, Peng reappeared for a 30-minute phone call with IOC President Thomas Bach, who was pictured. During the phone call, Peng said she was safe, but questions about her safety remained.

Among the sports organizations, only the Women’s Tennis Association intervened. The WTA demanded a full and transparent investigation by Chinese authorities, which did not take place. As a result, the WTA announced suspension of all tennis matches in China and Hong Kong, potentially losing hundreds of millions of dollars in revenue.

One of the main sources of income for the IOC is its sponsorship program called The Olympic Partner Program (TOP). Launched in 1985, TOP allows global merchants to sponsor all sanctioned Olympic events by ensuring product exclusivity and the use of their five-ring logo. For the 2021 to 2024 Olympic cycle, more than a dozen traders are expected to invest more than $ 3 billion by sponsoring the Beijing Olympics and Paris 2024. Human rights groups pressured TOP sponsors to speak out on China’s policies, to no avail. For example, Sportico contacted several TOP sponsors, including Airbnb

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, Bridgestone, Coca-Cola, Procter & Gamble

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, Toyota and Visa about Peng’s disappearance and neither responded.

Human Rights Watch, a global human rights non-governmental organization, reached out to each TOP member to get their answers on why they are sponsoring the Beijing Olympics. Only Allianz responded in a statement: “We support the Olympic Movement and our long-standing support for its ideals will not falter.”

In addition, Omega, another TOP sponsor, told Bloomberg: “As a global brand, we are certainly aware of international tensions and are watching them carefully… We sincerely believe that the Olympic Games are a perfect opportunity to meet on a common ground in the spirit of oneness. “Airbnb said,” We believe China is an important part of our mission to connect people from all over the world and from different backgrounds, now more than ever. “

The Congressional Executive Commission on China (CECC) recently asked representatives of Olympic sponsors, including Procter & Gamble, Coca-Cola, Visa, Intel

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and Airbnb on the Beijing Games. The Visa spokesperson responded: “As long as governments allow athletes to attend the games, we as Visa will be there to support or sponsor them.” Airbnb said, “The company’s partnership with the International Olympic Committee is ‘not focused on Beijing or other games.’

When asked if the games should be moved out of China, Paul Lalli, Coca-Cola’s global vice president for human rights, said, “We don’t make decisions on these sites. Home. We support and follow athletes wherever they compete. Coca-Cola has been an Olympic sponsor since 1928 longer than any other distributor.

One of the main reasons for the silence is the financial importance of the Chinese market for Olympic sponsors. According to Bloomberg, ten of the 12 biggest Olympic sponsors, including Toyota, Intel, Coca-Cola and Procter & Gamble, generate $ 110 billion in revenue in China alone.

Therefore, marketers need to exercise good judgment between criticizing China’s domestic policies without alienating the government and consumers. Earlier this year, Adidas, was one of many traders who cited China’s forced labor program in the cotton-growing region of Xinjiang among other abuses. As a result, the clothing company faced a strong backlash from consumers in China, leading to revenue drops of 16% and 15% in the second and third quarters, respectively. China accounts for around a quarter of Adidas’ global sales. As the Beijing Games approach, Adidas is sponsoring the German and British Olympic teams as well as Peng Shuai.

Other clothing companies including H&M, Burberry and Nike

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have also criticized Chinese policies and are being impacted by Chinese consumers. The backlash was triggered by online activists with the support of the Chinese government. According to Euromonitor International, China with $ 376 billion in annual revenue surpassed the United States at $ 330 billion as the world’s largest market for clothing and footwear.

2022 marks the start of a new broadcast / broadcast rights agreement in the United States between NBCUniversal and the IOC which was concluded in 2014. From 2022 to 2032 (six Olympiads), NBCUniversal will contribute $ 7.7 billion, an increase of 16% by Olympic Games. compared to the previous four-game deal.

Although NBC’s prime-time audience for the Tokyo Olympics fell to an average of 15.6 million (Total Audience Delivery), their Olympic coverage dominated audiences over the 17 days. Additionally, Peacock recorded its best two weeks of use. NBCUniversal said it sold a record $ 1.25 billion in domestic ad sales.

For the 2018 Winter Games in Pyeongchang (South Korea), NBCU attracted an average of 19.8 million viewers (Total Audience Delivery) during prime time, easily overtaking competing networks and generated $ 920 million with national advertising dollars.

For the first time, the Super Bowl will be played during the Winter Olympics. NBC Sports will broadcast both. For the Super Bowl, the cost of: 30 ad will be a record $ 6.5 million and is nearly sold out. The Olympics will be broadcast during the coveted “Big Game” launch period. Super Bowl LVI will be played on Sunday February 13, 2022 from SoFi Stadium near Los Angeles.

Despite concerns and possible protests, the NBCU announced last September that the ad was “virtually sold out” for the Beijing Olympics. A number of advertisers are investing in both the Super Bowl and the Beijing Games. One product category cited was streaming services.