McDonald's, International Olympic Committee End Partnership -- Update
June 16 2017 - 12:37PM
Dow Jones News
By Imani Moise and Julie Jargon
The International Olympic Committee said it and fast-food giant
McDonald's Corp. have agreed to end their long-running partnership
before their latest deal was set to expire.
"We understand that McDonald's is looking to focus on different
business priorities," the IOC said. "For these reasons, we have
mutually agreed with McDonald's to part ways."
McDonald's said it decided to end the partnership to focus on
new ways to grow its business. "As part of our global growth plan,
we are reconsidering all aspects of our business and have made this
decision in cooperation with the IOC to focus on different
priorities," a McDonald's spokeswoman said.
The company is trying to turn around its business in the U.S.,
where it has lost customers to more price-competitive fast-food
rivals, and to become more of a franchised business globally.
McDonald's recently said it is going back to the basics,
focusing on improving core menu items such as hamburgers and trying
to modernize the chain by investing in delivery and mobile-ordering
technology. The chain has also been cutting costs to become a
leaner organization. McDonald's in March announced it had already
achieved more than $200 million in savings through the end of 2016
toward its goal of reducing spending by $500 million by the end of
2018 and said it expects to trim another 5% to 10% from its
remaining cost base by the end of 2019. It is also returning more
cash to shareholders.
The spokeswoman declined to disclose the investment it had made
in the Olympics sponsorship.
McDonald's will still provide advertisements and restaurants in
Pyeongchang, South Korea, for the 2018 Olympic Games, but the
partnership will otherwise end effective immediately. The current
deal was supposed to last through 2020, and the IOC said it has no
current plans to name a direct replacement.
The agreement ends a nearly half-century relationship between
the two organizations. The fast-food chain said it got involved by
airlifting burgers to the Winter Games in Grenoble, France, to U.S.
athletes who were homesick for American food. McDonald's became an
official sponsor eight years later.
The IOC said the financial terms of cutting the partnership
short are confidential.
Write to Imani Moise at imani.moise@wsj.com and Julie Jargon at
julie.jargon@wsj.com
(END) Dow Jones Newswires
June 16, 2017 12:22 ET (16:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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