Geopolitics Becoming an Unavoidable Part of the Sponsorship Portfolio

A quick scan of Olympic and World Cup headlines should be sufficient for sponsors of any global sporting event or organization to realize that it’s no longer if, but when. When will they be called to state their stance on the non-sporting actions of a host country? Given that near-inevitability, they cannot wait until it happens to figure out what they are going to say, let alone what their posture is and what they plan to do about it.

Along with every other standard procedure, contingency and tripwire, the sponsorship binder needs a section devoted to geopolitics and international affairs.

2022 will be a pivotal year for international sports sponsors

The International Olympic Committee turned up the heat on themselves over their 14-year old decision to award the 2022 Winter Olympics to Beijing.

Activists, journalists, athletes and fans were already putting their spotlights on the sports industry’s approach to holding events and doing business in China. One of the NBA’s most outspoken players on international human rights issues, Boston Celtics’ Enes Kanter, upped his activist game to include his footwear. More than just being the one part of his uniform he can customize, the shoes specifically targeted Nike’s operations in and stance towards China. Not long after he began his recent campaign, tennis player Peng Shuai disappeared in China after she accused a high-ranking politician of sexual assault.

Facing rising calls to say or do something about the Olympian from the imminent host country, IOC president Thomas Bach held a video call with Peng.

To understate, that had the opposite effect of anything the IOC may have intended or hoped. The IOC’s actions compared particularly unfavorably to the Women Tennis Association’s. WTA chairman Steve Simon said they would withdraw future events from China – accepting the loss of revenue – if the Chinese government does not prove and guarantee Peng Shuai’s safety and fully investigate her accusation.

The New York Times asked all the IOC’s Partners – the top sponsorship tier – for their comments. Thirteen of the 15 partners ignored the request, while AirBnB and Coke declined comment.

As all this was playing out, Qatari authorities detained two Norwegian journalists and re-arrested the whistleblower they were set to meet. The journalists were reporting on working conditions at Qatar’s World Cup stadiums.

Demonstrating that investigative journalists and organizations like Amnesty International are not the only ones who doubt the integrity of the upcoming World Cup, the Danish soccer federation said they will go to Qatar next summer only to play. They will not participate in commercial activities on behalf of the hosts or FIFA’s sponsors; and they will conduct independent due diligence on their hotels and training facilities, which could bring them into conflict with sponsors or commercial partners.

What options do sponsors have when responding to global affairs?

Two quotes in recent New York Times articles sum up the opposing schools of thought on sponsoring global sporting events.

Rick Burton, the US Olympic Committee’s CMO for the 2008 Summer Olympics in Beijing, said “you know what you’re getting into” when you sign on as an IOC major sponsor. Perhaps he is saying that a blind eye and a closed mouth are parts of the sponsor activation package, or he is falling back on “caveat emptor” as a warning to any future IOC partners. Either way, the implication is that sponsors will take a reputational hit over their involvement, so their sponsorship goals should not be linked to brand sentiment or perceptions of social responsibility.

On the other side, professor of international sports business Simon Chadwick suggested to the Times that silence, like that from the IOC’s partners, may no longer be an option. “I think we are rapidly heading toward the kind of terrain where organizations, businesses, and sponsors will be forced to choose one side or another.”

At least among the lower-profile international events, sponsors have more influence than they may think. They do not have to be purely reactive or performative.

Pressure from Ice Hockey World Championship sponsors Liqui Moly and Skoda contributed to the International Ice Hockey Federation’s decision to remove the tournament from Belarus in early 2021. IIHF cited safety and security concerns around Belarus’ domestic politics and COVID-19 response, but the sponsors’ threat to withdraw their involvement stemmed from Belarus’ worsening human rights record.

Sponsors need their plans in place before they become necessary

One of the classic case studies in sports marketing is “Dan & Dave” from the 1992 Summer Olympics. Reebok ran the campaign, but overlooked a critical potentiality: one of the two not qualifying for the Olympics. That’s what happened when Dan O’Brien finished eleventh at the Olympic Trials. Since then, sponsors and advertisers have learned to plan for black swans, or at least those that have already happened.

Every sponsor needs to understand the international networks they buy into. Those include the property’s location, governance, ownership and even their fellow sponsors. They need to prepare contingencies for domestic and geopolitical events, including the red lines that will trigger a re-evaluation of their involvement or bring about an immediate action.

The trigger may be a black swan, but not the resultant request for comment or demand for action.

Whether they subscribe to “you knew what you were getting into” or  “a time for choosing,” companies cannot wait until the New York Times is on the phone or a change.org petition goes viral before figuring out what their position is. They certainly can’t wait until then to decide if they are even going to have a position.

“No comment” is a position, and rarely is it an advantageous one.