- In the second of a trilogy of interviews with the Tokyo 2020 Organising Committee, SportBusiness spoke to Masahiko Sakamaki, the executive director of the committee’s marketing bureau.
- Sakamaki has since 2015 overseen TOCOG’s record-breaking sponsorship sales, that have generated $3.3bn in revenue.
- To understand the success of the sales, one must understand some unique characteristics of Japanese business and of the Tokyo 2020 story.
The Tokyo 2020 organising committee’s $3.3bn-and-counting sponsorship revenue haul is arguably the year’s outstanding sports business success story. Japan’s omnipresent advertising agency Dentsu is managing the sponsorship sales, but they are overseen and finalised by TOCOG’s Marketing Bureau, led by ex-Dentsu man Masahiko Sakamaki.
Sakamaki’s career has included eight years in the sumo business, and before that in marathons: he helped launch the Tokyo marathon and around 10 others. He took his latest role in 2015, succeeding Hidetoshi Maki, another former Dentsu executive who is now back at the advertising group.
Speaking to SportBusiness at TOCOG headquarters on Harumi Island in Tokyo last month, Sakamaki said several stars aligned to help Tokyo 2020’s sponsorship programme reach such remarkable heights.
“A lot of it has to do with timing. The growing economy certainly helped,” he explained. The early stages of the sponsorship sales process coincided with positive economic trends linked to ‘Abenomics’, the economic reforms introduced by prime minister Shinzō Abe following his election for a second term in December 2012.
“Many corporations and businesses wanted to set a landmark, a milestone for themselves, and 2020 became the ideal target,” Sakamaki adds. “Many businesses wanted to invest in society and the country via 2020…After the earthquake in 2011, we had to rebuild. In the past eight years, a lot of the infrastructure has been propped back up. It was a period when big Japanese corporations were willing to spend.”
The willingness of Japanese business to row behind the Games in a spirit of national effort, perhaps at the expense of real marketing returns, has been well-documented. And while such engagement was always likely, it was given greater momentum by the Great East Japan Earthquake and tsunami of 2011. Recovery from the disaster is one of the central themes of the 2020 games for the hosts – echoing the 1964 Games that marked the country’s post-World War 2 reemergence on the world stage.
The combination of a growing economy and powerful political motivation left Tokyo 2020 with the challenge every sports team manager wants: too many players for the positions he has to fill.
“We had a lot of corporations put their hands up,” Sakamaki says. “It was difficult for us to sort through our potential sponsors.”
Dentsu sourced would-be sponsors, and Sakamaki’s team finalised deals with them. Dentsu was appointed in 2014 after beating rival offers from three agencies to land the job of TOCOG’s marketing agency.
The OC’s novel solution to the surfeit of sponsors has also been well documented. Western marketers scratched their heads as the committee appointed multiple brands in single industrial categories. It has two airline partners, two banking partners, three travel agency partners, and in the last month added two ‘professional services’ partners – the Japanese arms of Ernst and Young and Boston Consulting Group.
The approach ran counter to the IOC’s traditional adherence to category exclusivity for sponsors, and the committee took some convincing before agreeing with it. “Initially, it was difficult to convince the IOC to do what we’ve done,” Sakamaki says. “But once we managed to convince the IOC, it turned out really well for us.”
“Really well” is an understatement. This month’s BCG deal brought TOCOG’s tally to 66 domestic partners: 15 Gold Partners, 32 Official Partners and 19 Official Supporters. At the time of the interview with Sakamaki in late October, revenue from TOCOG sales was at $3.3bn, double the OC’s earliest projections.
Tokyo 2020’s sales prompted many in the sports industry to ask why these companies were signing up to expensive deals in return for little exclusivity and a highly cluttered sponsorship environment.
The answer requires an understanding of the unique characteristics of the business and political environment in Japan. There was, no doubt, political and popular pressure on Japanese brands to contribute, but also genuine desire to be part of a great national project. It is an emotive story of rebuilding – after the 2011 earthquake, but also after the economic malaise of the last 30 years.
But there are limits to the collectivist spirit, and an August article in the Financial Times suggested TOCOG had reached them. It quoted sources at Tokyo 2020 sponsors who felt they had been pressured into overpaying and were likely to make losses on their deals.
Sakamaki says the article prompted a round of dialogue with sponsors. He admits there is indeed frustration from some about the limits of their assets, but it was limited and certainly not to the extent that any want to withdraw from their deals.
“After the story came out, we conducted hearings with our sponsors. Of course, because the fee is high, we did have some sponsors who weren’t 100 per cent content with the return on their investment. But what we can say is that all the sponsors took a lot of pride in being part of the programme. None showed any desire to pull out.
“Marketing the Olympics Games can be tricky because, unlike in the Rugby World Cup, for example, they don’t have the [in-venue] boards. So obviously it’s on us to ensure that we help make the most of the assets that are provided to us. Some sponsors were a little bit frustrated by the outcome.”
Those involved in the Japanese sports industry hope Tokyo 2020’s sponsorship sales round is a sign of growth to come and not just a one-off. If the event delivers good ROI for its sponsors, it could certainly prompt future investment.
There are a couple more major events on the horizon that could help things along. The country is hosting the Asian Games in 2026 and is planning a 2030 Winter Olympic bid. In 2021, it is hosting the World Masters Games, an event for mature, amateur athletes that chimes with Japan’s adaptation to its ageing population.
The Japanese government has bullishly estimated the country’s sports industry will triple in size to $140bn annually by 2025.
Sakamaki is bullish too. In particular, he believes, commercial growth will come, as proven by Tokyo 2020, from corporations’ desires to be associated with properties that improve society and people’s lives: “I have high expectations for what sport can do and how it can impact society across the world, and many corporations are willing to spend to make that happen. Through sport, people’s lives can become better, can improve, and we know for sure that a lot of companies are willing to invest in that.”