Olympics sponsors hire consultants to weigh reputation damage

14 June 2021 Consultancy.asia 2 min. read
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Big-ticket Japanese sponsors of the Tokyo Olympics 2020 have called in a consortium of consulting firms to explore the prospect of withdrawing from the games – for fear of reputational damage.

The news was broken by the Financial Times, which cited anonymous sources to report that brand and analytics consultancy Kantar and two Japanese consultancies – Macromill and Intage – are helping sponsors weigh the pros and cons of going through with the Tokyo Olympics 2020

The games were already pushed back by a year from July-August 2020 to 2021 due to the Covid-19 outbreak. Now around the corner, the event is being met with doubt by the Japanese public – as they fear a spike in infection, and the risk of new variants entering with thousands of athletes from around the world. 

Olympics sponsors hire consultants to weigh reputation damage

A recent Nikkei poll revealed that more than 60% of people in Japan are still opposed to the games going through – despite predictions of strong Japanese success. Weary of being associated with an event so demonstrably unpopular, over 60 Japan-based sponsors with a cumulative investment of over $3 billion in the games are having second thoughts. 

Kantar, Macromill and Intage are set to help the backers – which include Toyota, Asahi, Fujitsu and several others – understand the implications for their brand if they go through with the games amid widespread doubt and criticism. 

Economic impact

The repercussions of a withdrawal could be immense. Once touted as lucrative investment, the Tokyo Olympics 2020 already brought losses of around $6 billion for organisers just by being pushed back one year. Losing Japanese sponsors would add another $3 billion to this figure – topping off a $15-billion-plus investment for hosting the games per official stats.

And that’s if the event survives the sponsor exit and widespread criticism. Some expect the games to be postponed further or even canceled – a move that could bring over $16 billion in losses for Japan.

While devastating in its own right, a recent report by Nomura Research Institute – as cited by Reuters – explained how such a loss pales in comparison to the longer term economic impact of another infection spike, or the entry of new variants.