McDonald’s Extends Olympic Sponsorship, Continues to Draw Ire

McDonald’s (NYSE:MCD) once again is a top sponsor of the Olympic Games. But not everyone is lovin’ it.

On Thursday, McDonald’s announced it would continue its sponsorship through 2020, a deal estimated around $100 million per four years, or for every pair (winter and summer) of Olympic Games.

In addition to its role in this year’s Games in London, McDonald’s now will gain exposure in Sochi, Russia (2014), Rio de Janeiro, Brazil (2016) and Pyeongchang, South Korea (2018). The 2020 Summer Games location has yet to be determined. McDonald’s also uses the Olympics as a primary part of its advertising initiatives each year in the U.S.

In a statement, McDonald’s President and COO Don Thompson said, “In keeping with McDonald’s ongoing commitment to children’s well-being, we will continue to communicate with kids about the importance of balanced eating and active lifestyles through our partnership with the Games.”

However, it’s the topic of health that’s landing McDonald’s in hot water.

For years, various organizations have protested McDonald’s sponsorship of the Olympic Games on the basis of hypocrisy — many are galled by the notion that a restaurant known for flipping fatty burgers and greasy fries is joined at the hip with one of the foremost showcases of athleticism and fitness. Numerous protests already are planned for the 2012 Games.

A former Olympian is particularly outraged at one of the 2012 initiatives for London. McDonald’s will build its largest location ever — a 30,000-square-meter, two-story behemoth capable of seating 1,500 customers — in the Olympic Park. 2004 boxing silver medalist Amir Khan has criticized organizers, telling the Daily Mail, “It is clearly sending the wrong signal to kids and young people. If we want them to be healthy and educate them to eat healthily, we need to think about approaching them in a different way, especially around sport.”

Also, McDonald’s position as the exclusive “meal brand” of the games has drawn much ire across Britain for putting an American face on the food. Other chains must remove their labels and/or change packaging on food sold throughout several Olympic sites, according to The Guardian, meaning the country’s mix of British, Indian and other ethnic fare will go mostly unnoticed.

Coca-Cola (NYSE:KO) has a similar exclusivity deal with the Games as the sole provider of non-alcoholic drinks. However, spectators will be able to bring their own drinks into the various Olympic venues.

McDonald’s isn’t alone in drawing ire as an Olympic sponsor. In December, the Indian Olympic Association executive board planned to protest Dow Chemical’s (NYSE:DOW) sponsorship of the Games. Dow Chemical in 2001 bought Union Carbide India Limited, which owned a pesticide plant in Bhopal, India, that leaked toxins and killed thousands in subsequent years. While Dow had no direct connection to the incident, protestors have decried the mere link between the two companies.

— Kyle Woodley, InvestorPlace Assistant Editor

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