Toyota and IOC Can Survive TOP Sponsorship Split

It was big news back in 2015 when Toyota became the Olympic movement’s first global TOP sponsor from the automotive industry. The category had previously been sold on the national level and by the local organizing committee for each Olympic Games.

It is equally noteworthy that news reports out of Japan last week say the automaker will not renew the partnership when it ends after the Paris Games this summer. What the two parties will do after that is an open—and very intriguing—question with implications for many other brands and organizations.

The first inquiry of course will be why Toyota would want to walk away. Kyodo News, which broke the story, cited unnamed sources who claimed the reason is dissatisfaction with the way the IOC distributes sponsorship revenue and the belief that “it is not used effectively to support athletes and promote sports.”

While that is not out of the realm of possibility, it seems odd and somewhat disingenuous given that TOP’s revenue distribution model has not changed since the deal was signed nearly a decade ago.

It would be just as reasonable to conclude that a) multiple problems surrounding the delayed 2020 Tokyo Games cast a pall over what was initially seen as a major point of pride for one of Japan’s flagship international corporations and/or b) the difficulty of managing and activating a global sponsorship across a complex go-to-market system that includes independently owned dealers, dealer marketing co-ops, and regional and national marketing organizations became too great.

Regardless, of greater importance is what happens now. According to the Kyodo News report, Toyota is interested in retaining sponsorship of the International Paralympic Committee, but the current partnership between the IOC and the IPC would not allow for such bifurcation. There also is the matter of whether the IOC should maintain the automotive sector as a global category or let it revert to being sold by the national Olympic committees and the organizers of each Games, as was the case prior to 2015.

I suspect in the first case the IOC will insist on keeping IPC rights bundled into TOP partnerships and in the second will be loath to give up the revenue it will earn by securing a replacement for Toyota, assuming it can do so.

But if it wants to approach both scenarios from the perspective of providing maximum value to all parties, the IOC should strongly consider the alternatives.

Allowing for discrete partnerships of the IPC and Paralympic Games would elevate those properties. Currently, they are in a position similar to where many women’s sports properties found themselves just a few years ago: Something seen as “good to do” for social responsibility reasons, or something brands are forced to do in order to obtain the rights they most want. But as Toyota’s previous activations and interest in continuing the relationship demonstrate, parasports can and do stand on their own as vehicles for boosting brands and businesses. The IOC would do parasports a great service by creating more, not less, opportunities for proving their impact, while continuing to provide the critical support it offers the IPC.

As for the auto category, many national Olympic committees would welcome the opportunity to sell sponsorships within their borders, to either domestic or import manufacturers, as the USOPC did for many years—first with General Motors and then BMW prior to Toyota’s TOP deal. Given the growing competition in the traditional and NEV categories, plenty of sponsor prospects would be interested in such potential partnerships in many key markets.

Here’s hoping the IOC will think about shaking things up, but I wouldn’t bet on a change in the status quo just yet.