What Happens to Huge Sponsors If US Pulls Out of 2018 Winter Olympics?

December 7, 2017 by Douglas A. McIntyre

Source: Thinkstock
Ambassador to the United Nations Nikki Haley said whether Team USA will participate in the 2018 Winter Games in PyeongChang, South Korea, is an “open question.” The reason is because of fear of an attack from North Korea, which would put the lives of American athletes in jeopardy. That leaves another open question, which is what will happen to the huge companies that have spent tens of millions of dollars to sponsor these Olympics.

The Team USA sponsors are a who’s who of America’s largest companies: Coca-Cola, Visa, Toyota, General Electric, Intel, Procter & Gamble, Alibaba, Bridgestone, Atos, Omega, Samsung, Panasonic and DowDuPont.

Sponsors could ask for some portion of their money back. Whether that would happen is likely a legal issue, and at least some of the money already might have been spent. There may be little money to refund.

A collapse of U.S. participation may also have a domino effect. Sponsors may shy away from future games because of the risk the South Korea games represent, although it is unique due to the extraordinary threat it represents.

There is a precedent for a boycott, although on a very different basis. The United States stayed out of the 1980 games in Russian because of that nation’s invasion of Afghanistan. However, for sponsors the reason may not matter much. It still means a loss of a large investment and opportunity to get global exposure. The trouble with North Korea may take a new set of victims.