SAN FRANCISCO (Reuters) - Intel Corp (INTC.O) said on Wednesday it would become a major sponsor of the International Olympic Committee, making the chipmaker the latest technology company to put marketing dollars behind the global sporting event.
The new deal, which goes until 2024, comes a week after longtime Olympics sponsor McDonald’s Corp (MCD.N) bowed out of its sponsorship deal three years early, citing a change in the company’s priorities as it tries to hold down costs.
Financial terms of the deal were not disclosed but IOC sources have previously told Reuters that major sponsors pay about $100 million per four-year cycle, which includes one summer and one winter games. The IOC has been looking to increase the cost of those deals, sources previously said.
Intel joins about a dozen global Olympics sponsors such as Coca-Cola Co (KO.N), Samsung (005930.KS) and most recently, Chinese e-commerce company Alibaba (BABA.N) which signed on six months ago. The IOC has been trying to make the Olympics more technologically savvy and appeal to younger people through its internet-based TV network, the Olympic Channel.
IOC President Thomas Bach and Chief Executive Officer Brian Krzanich said Intel’s sponsorship will open up new experiences for athletes, fans and spectators in emerging areas such as virtual reality.
“We’ll allow people online to feel like they are there,” Krzanich said, speaking at a press conference in New York.
Intel said it would provide 5G wireless technology, virtual reality, artificial intelligence platforms, and drones that could be used in aerial filming or light shows.
Intel’s business has undergone big changes in recent years. In March, it agreed to buy autonomous vehicle technology firm Mobileye MBLY.N for $15 billion in a bid to expand its reach beyond its core microprocessor business, which has faced declines along with the personal computer market.
Intel may be seeking to expand its reach in Asia, which is preparing to host three consecutive Olympic Games. Pyeongchang in South Korea is staging the 2018 winter games, Tokyo the 2020 Summer Olympics and Beijing the 2022 Winter Olympics. The IOC is deciding between Paris and Los Angeles for the 2024 summer games.
The IOC is looking to sign pricier deals while brands are trying to figure out whether exclusive Olympics sponsorship rights offer the marketing impact they once did. Some companies find it is much cheaper to work directly with athletes or specific countries than the IOC.
Timo Lumme, managing director of IOC Television and Marketing Services, said in an interview that the IOC, with 13 top sponsors, has more partners than ever before, showing that brands see “tangible returns” from investing in the games.
As for the tensions in the Korean Peninsula, Lumme said that the IOC is monitoring the situation daily to see if it could effect the 2018 games.
“We feel very sure and comfortable and that the Korean government will provide a safe environment for the world’s athletes to meet next February,” Lumme said.
Reporting by Liana B. Baker in San Francisco; Editing by Bernard Orr and Bill Trott