Olympic sponsors caught in the middle of diplomatic boycotts against China
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Hong Kong/Tokyo (CNN Business)Sponsors of the Olympics are walking a tightrope ahead of the Beijing Winter Games next month as worsening geopolitical tensions force them to consider downplaying their involvement without upsetting China.
Political fervor in the United States reached a high last month as the White House called for a diplomatic boycott of the Games, a statement against human rights abuses that Washington has accused Beijing of perpetuating in the country’s western Xinjiang region.
That’s added to pressure on companies such as Coca-Cola (KO), Intel (INTC), Visa (V) and Airbnb, which in recent months have faced calls to cut ties with the event because of Xinjiang.
To be sure, sponsors aren’t holding back within mainland China.
Over the last several weeks, brands have seized the opportunity to connect with consumers on the ground, with Coca-Cola, Visa and Procter & Gamble (PG) all rolling out promotional campaigns.
CNN Business reached out to all 14 top Olympic partners for comment. Most did not respond, while Intel and China’s Mengniu Dairy declined to comment.
Atos (AEXAY), a French IT company, said it would “not comment on issues outside of our role as worldwide IT partner,” and fully abides “by the IOC’s strategy on human rights, in addition to our own ethics and compliance program.”
Coca-Cola said its top executives wouldn’t be at the Games due to the Covid-19 pandemic and a scheduling conflict with its upcoming earnings, without commenting further.
Allianz (ALIZF), a German insurer, said that it was focused on the achievements of the athletes, while Swiss watchmaker Omega said that it planned to concentrate on “ensuring that each result is measured with utmost precision.”
Addressing the issue
Some companies, however, have tried to address the elephant in the room.
Last July, a US Congressional Commission summoned American companies to a hearing to address their commitment to human rights in China and the risks of being associated with the Games.
Executives from Airbnb, Coca-Cola, Intel, P&G and Visa testified, each noting that they were long-term partners with the IOC and not focused on any particular set of Games.
“We do not believe our sponsorship degrades our global commitment to human rights,” said Steve Rodgers, Intel’s general counsel.
“Our sponsorship is not an endorsement of any specific host country or its government, nor an acceptance or approval of domestic activities that may take place within that country.”
Some companies have even met with activists.
Last October, Allianz spent time with campaigners from the World Uyghur Congress, according to Zumretay Arkin, the group’s program manager. The organization says it represents the interests of the Uyghurs, an ethnic minority group in Xinjiang that the United States and others allege is a victim of China’s human rights violations.
Arkin said the organization, along with a Tibetan human rights group, had reached out to all Beijing Olympic sponsors, and found that “Allianz was the only company willing to meet with us.”
During the meeting, a former Uyghur teacher in detention camps and a former Tibetan political prisoner shared their past experiences with Allianz representatives, according to Arkin.
In a statement to CNN Business, Allianz said that “we consider dialogue with civil society organizations to be very important.”
“We have been in exchange with [such organizations] on our sponsorship in recent months and know their expectations towards sponsors,” the company added, without elaborating further.
The big picture
Still, there is broad recognition that this isn’t likely to be the first or last controversy with the Olympics.
Observers point to the Berlin Games in 1936, Moscow in 1980, Salt Lake City in 2002, and even Beijing in 2008 as also having been highly politicized.
Companies “know that if they’re going to be a sponsor of the Olympics, that there are going to be protests and boycotts. It happens just about with every Games,” said Rick Burton, a sports management professor at Syracuse University, who was chief marketing officer for the US Olympic Committee for the 2008 Beijing Games.
“I think they take the stance that they’ve got to operate regardless,” he added.
The companies realize that the upside potential is greater than the downside risk.
Rob Prazmark, CEO of 21 Marketing who helped create the IOC's global partnership program in 1985
Brands also typically lock themselves into deals that can stretch out over a decade, according to Prazmark.
“Some of these companies have contracts now through 2032, some 2028,” he said. “And so they kind of flow with the tide, meaning there are some Games that are great, some Games that are not that great, but they realize they’re in it for the long haul.”
— CNN’s Beijing bureau, Emiko Jozuka and Chris Liakos contributed to this report.
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