The postponed Tokyo Olympics are due to start in less than 50 days. Yet there is no fanfare. The cancellation of a reception for overseas guests is an ominous sign for Japanese corporate sponsors. They are right to call for further delay.
Six years ago local companies in Japan were clamouring to sign up to the 2020 Games. The Olympics means unrivalled exposure to global consumers. Collectively, companies like Nomura, Asahi and Asics paid a record ¥361bn ($3.3bn), the most for any Olympic Games. Becoming a gold partner, the highest tier of sponsorship, was reported to cost about ¥15bn.
For Asics, the Olympics carries particular importance. The Kobe-based sportswear maker has fallen far behind global rivals like Nike and Adidas in both sales and brand recognition. The company claimed its return on sponsorship fees could be at least tenfold. Olympic-related sales were estimated to reach ¥200bn. Asics shares began to rise in mid-2019 on those expectations, halting a five-year long decline.
Yet these forecasts relied heavily on foreign fans attending the games. The International Olympic Committee’s policy requires all venues, including those not used for competition, to be free of commercial and advertising messaging. Supplying products to athletes and volunteers and selling them to spectators is an alternative form of marketing. Asics had been planning to promote its brand by supplying 80,000 jerseys for volunteers and local teams — marketing that will mostly not make its way into televised coverage.
With overseas spectators now banned, sponsors have lost their target audience.
Opinion polls show that 80 per cent of people in Japan — including vocal SoftBank founder Masayoshi Son — want the Olympics to be either cancelled or postponed until the pandemic has eased. Yet the head of Japan’s Olympics organising committee has ruled out further suspension. Local frustration is growing towards those who take part. Sponsors must hope that their lossmaking involvement will not also have a negative impact on their brands.
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