Media watch: Olympic sponsorship deals an open secret

As we pointed out in this space a few weeks ago, the investigation into possible bribes paid to Tokyo Olympics official Haruyuki Takahashi, which led to his arrest last week, might not have happened if Shinzo Abe were still alive, mainly because of the timing. Most of what prosecutors dug up on Takahashi’s dealing with Aoki Holdings, an official sponsor of the Games, was pretty much out in the open even before the Olympics took place. And while reportedly prosectors starting looking into Aoki last spring, they didn’t really get serious until after Abe’s killing on July 8.

A fairly good explanation of how cavalierly the whole bribery matter was handled by those involved was provided by journalist Itsuro Goto in an interview with Aera.dot that appeared August 9, or about a week before the arrest. Goto points out how the Japanese organizing committee for the Tokyo Games had lobbied the International Olympic Committee to change the rules regarding sponsors. Prior to Tokyo, official sponsorship deals were limited to one company per industry. The IOC’s logic in this regard is that if you limit sponsorship to one company per industry, that company can maximize its exposure, thus getting more bang for their sponsorship buck. The IOC can charge a huge amount of money for such exclusive exposure and use of the Olympics logo and resources while guaranteeing that no competitors can get within a mile of an Olympic venue or broadcaster. But Dentsu, the advertising company that practically ran the Tokyo Games, and for whom Takahashi once worked, lobbied the IOC—through the organizing committee—to get rid of the exclusivity and allow more than one company in an industry to be sponsors, saying that while an exclusive sponsor could be charged a lot, multiple lower-level sponsors would actually bring in more money for the IOC since so many companies wanted to be sponsors but couldn’t afford to bid that high for the exclusive contract. 

The IOC agreed, because, as Goto says, “money always comes first” at the Olympics; even though they must have understood that, at bottom, the entity that would benefit the most was Dentsu, which could broker multiple sponsorship deals for its clients. Of course, as the Aera interviewer pointed out, if multiple companies can represent an industry as sponsors, they lose out on the biggest benefit of exclusivity, which is exclusive supply contracts. But as Goto points out, it’s still possible to have it both ways. A company like Aoki can get to be a non-exclusive sponsor at a much lower price and still get a supply deal—in their case, as a clothing company, they made uniforms for staff and referees and sold apparel at retail with the Olympic logo—because they have an insider who can pretty much guarantee that deal: Takahashi, who, after leaving Dentsu started his own consulting company, Commons, which had a contract with Aoki to help them with promoting their brand. Takahashi had been working for Aoki in one capacity or another for 20 years. Now he also happened to be an executive on the organizing committee. The ¥51 million he received from Aoki in monthly installments prior to the Olympics was described by him as a consulting fee, but now prosecutors are saying it was a bribe to get Takahashi to broker the sponsorship and supply deals. Also Aoki paid the sponsorship fee through Takahashi, who presumably took a cut (Dentsu probably did, too) before it went to the IOC; or, at least, that’s what the prosecutors think.

As a member of the organizing committee Takahashi is deemed to be a civil servant, and thus it is illegal for him to receive a reward for any Olympic-related transactions. But anyone who just looks at the way Dentsu convinced the IOC to change the sponsorship rules would have to conclude that corruption was built into these new rules, especially since Dentsu itself didn’t have to worry about competition. No other Japanese advertising company had any hand in the 2020 Games (or any Japanese-related Olympic endeavor). As Goto said, in essence the organizing committee was Dentsu. The committee’s core staff were all either working for Dentsu or “lent” by Dentsu, which saw the 2020 Games as their own project.

According to Goto, that is the main reason for eliminating exclusive sponsorship contracts. Any member of the organizing committee who has a connection that could possibly benefit from an Olympic deal can himself benefit. This is what prosecutors are looking at right now, and the fact that various members of the committee didn’t see this coming just goes to show how casual they are about the personal profitability of the Olympics. And it isn’t limited to companies who have a stake in the Games. Author Ryu Honma often talks about how the game company Sega-Samy was talked into funneling cash to a sports association that could then be used to bribe African countries to vote for Tokyo as the 2020 host back when the hosting gig had yet to be decided. Samy-Sega did not profit from the Olympics, but it could make a killing when casino gambling finally takes off in Japan. 

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