Do Olympic Sponsors Face Reputational Risks?

by T+B Blog Team on February 13, 2014

The XXII Olympic Winter Games in Sochi are well underway and the eyes of the world are turned to the Black Sea city to watch the most expensive Olympic Games in history. Even the preparations for the Games promised it will be an event to remember, considering Russia’s controversial stance on civil freedoms, security tensions, and corruption allegations, which raised questions for brands associating their names with the event. We will soon find out whether Olympic sponsors including Coca-Cola, Samsung, McDonald’s, and Visa have put their brand reputations at risk by partnering with the Winter Olympics, Katie McQuarter writes in an article for The Drum.

While the relationships between sports, sponsorship, and geopolitics have always been a sensitive topic, the close scrutiny that sporting events are exposed to today hardly makes things easier. This should be extremely clear to brands when deciding whether to enter into sponsorship deals, Christian Schroeder of branding agency Lambie-Nairn told The Drum. Brands that sponsor a sports event must always be prepared for the worst, otherwise the chance of suffering from failure is significant. Today’s sponsorship deals bring both risk and reward; without preparing for possible downfalls, brands are taking a huge reputational risk and Sochi is a brilliant example of that, according to Andy Sutherden from PR company Hill+Knowlton.

Growth in global media coverage and the advent of social media have made it even more difficult for sporting events to “exist in a bubble,” with topics surrounding homophobia, terrorism, and human rights threatening to eclipse an event that should rather be perceived as an outstanding sporting spectacle, Schroeder noted.

Companies may face reputation challenges when they are closely associated with a sporting event where incidents occur—whether there are problems with the venue, accidents, or acts of nature that disrupt events. Most brands do risk analyses before entering into sponsorship agreements and their agreements usually include remedies for any breach of contract.

What are some of the potential threats that you think could lead a brand down a path to reputational risk? Let us hear your thoughts in the comments below.

 

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