What Does an Olympics With No Spectators Mean for Nike, Asics & Other Sponsors?

The Tokyo Olympics can’t catch a break.

After COVID-19 forced organizers to delay the games by a year, Japanese Prime Minister Yoshihide Suga today declared a state of emergency in Tokyo. “Although the number of severely ill patients and occupancy rates of hospital beds have remained at a low level, the impact of COVID-19 and mutated strains must be taken into account,” Suga said addressing media. “We must strengthen the council measures to prevent the infections from spreading to the rest of the country again.”

Because of this, a decision was made by the government of Japan, the International Olympic Committee and others that no spectators will be allowed into any venues in Tokyo during the Olympic Games.

When asked if the Tokyo Games were a lost cause at this point, The NPD Group Inc. senior sports industry adviser Matt Powell responded by saying, “They never were a major cause,” and followed with a simple “yes.”

However, the industry insider said brands with any form of financial investment in the games — most notably, Team USA domestic sponsor Nike and Tokyo Olympics gold partner Asics — don’t stand to lose much, despite the lack of in-person viewing.

“Only the sponsors who sell products at the venues will be affected. Many more people watch the Olympics on TV than in person,” Powell said. “The Olympics never drive specific product sales except souvenirs — it’s a long-view marketing play, not an immediate sales driver.”

Marc Beckman, founder and CEO of advertising agency DMA United, went a step further, explaining that the lack of in-person attendance will make whatever is left of the viewing experience worse.

“Without fans in the seats, a major emotional component is literally sucked from the stadiums. This leads to lower TV audiences, less engagement on social media and shortened interest spans in general,” Beckman said. “In turn, if brands were planning to see a spike in sales during this time period, which is commonplace, predictably consumers will not purchase at past levels.”

He continued, “In my estimation, gross sales will be diminished, but not entirely. Predictably, a majority of the planned sales goals and projections for the brands should be realized. But the brands also lose an intangible component — an emotional fan connection with the brand culture.”

However, not all is lost with the Olympics from a brand perspective.

Beckman said consumers should expect top-notch presentations on the social media channels of athletic market leaders surrounding the event.

“Nike, Asics and other performance brands invested in the Olympic Games will execute digitally at a very impressive level,” Beckman said. “That said, there is nothing comparable to the energy fans bring at live Olympic competitive matches — painted faces, chants and flag waving. It is simply impossible for the brands to replicate the energy derived from live fans in the seats.”

The Tokyo Olympics were one of the first major events to feel the impact of the coronavirus. In March 2020, the International Olympic Committee and the government of Japan agreed to cancel the games for the summer. Also, they agreed to reschedule the event for “a date beyond 2020 but not later than summer 2021, to safeguard the health of the athletes, everybody involved in the Olympic Games and the international community.”

Aside from the elimination of in-person viewership, the Olympics have not been immune to controversy as of late. On Tuesday, the Team USA roster was released, and track-and-field star Sha’Carri Richardson was noticeably absent.

Richardson accepted a one-month suspension on July 2 after testing positive for marijuana, which she apologized for during an appearance on NBC’s “Today” show. Despite the suspension, Richardson — who recorded a qualifying time of 10.86 seconds in the 100 meters at the U.S. Olympic Track and Field Trials — could have been able to compete in the 4×100m relay in Tokyo, as it is slated to take place on Aug. 6. However, the USA Track and Field organization opted to not give the 21-year-old a slot on the team.

USATF said in a statement, “While our heartfelt understanding lies with Sha’Carri, we must also maintain fairness for all of the athletes who attempted to realize their dreams by securing a place on the U.S. Olympic Track & Field Team.”

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