Delta, Olympic Partnership Hits Turbulence as Airline Plays Long Game
Sponsorships for the 2028 Summer Olympic Games roared out of the gate on March 2, 2020, when the LA 28 organizing committee named Delta Air Lines its first founding partner. The eight-year commitment, through a joint venture with U.S. Olympic and Paralympic Committee (USOPC), came with great support from Los Angeles dignitaries and an Olympic media partner in Comcast’s NBCUniversal.
Nine days after the official announcement, the pandemic arrived in the U.S. in full force. “Then the world shut down,” said Delta senior vice president of global marketing Molly Battin.
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Yet the deal did not. The Atlanta-based company’s major partnership, worth $400 million, has soldiered on despite the pandemic turbulence.
“This is just step one of the journey,” Battin said. “We really look forward to, especially once we move beyond the pandemic, figuring out bigger and better ways to celebrate as we march toward to Paris, Milan then on to LA.”
First, though, comes the 2022 Winter Games in China. Delta previously agreed to charter Team USA athletes to Beijing, and the logistics of flying out athletes on Thursday from Los Angeles International Airport has presented myriad challenges—such as consolidating athletes to just one charter plane to maximize COVID-19 safety protocols.
The airline, which will do the same for the Paralympic team in March, is working to adhere to Chinese government entry requirements, while at the same time fielding criticism for its lack of acknowledgment of human rights issues in China.
But it’s the pandemic that has caused the most disruption in marketing efforts. Delta last month unveiled its Team USA inspired aircraft design, a custom livery that celebrates the partnership which runs through the LA 28 games. While the signature event was scaled down, with hundreds of employees masked, it premiered on NBC’s Today show seemingly without a hiccup.
This adjustment embodies how the marketing partnership—which is amplified through NBCUniversal—is expected to continue to be activated as the world navigates this phase of the pandemic.
Elevate Sports Ventures chief client officer Cameron Wagner says her consulting firm is seeing a steady but cautious comeback of in-person activations from a year ago.
“The good thing is, sponsors have gotten really used to driving content,” she said. “They can go smaller on the (in-person) activations and still have a big impact on consumers and customers through what they do digitally and what they do with content.”
This will be key for Delta, which reported a $408 million loss in Q4 2021 because of the omicron surge and expects to report a loss in the first quarter of 2022.
Heading into next month’s Winter Games, tickets will only be offered to select groups and not the general public. NBC Sports broadcasting crews were set to fly Delta to cover the event, but last week the network announced it would not be sending announcers.
China’s strict guidelines on COVID testing and quarantines for travelers have severely limited Olympic sponsors’ typical client-hosting and on-ground activations surrounding the games. Delta won’t be hosting client or employee team bonding events in China and won’t have employees on the ground, either. Most of the celebration instead will take place during viewing parties at Deer Valley Resort just outside of Salt Lake City, where Delta sponsored the Winter Games in 2002. The company also sponsored the 1996 Summer Olympics in Atlanta.
Brands are trying to avoid some of the marketing letdowns experienced during the delayed 2020 Tokyo Games. While there’s more certainty this time around, the ongoing unpredictably has resulted in a delay of action from companies, creating a shorter window for activations.
“A lot of sponsors weren’t prepared for a pandemic,” said Rick Burton, former chief marketing officer for the U.S. Olympic Committee at the Beijing 2008 Summer Olympics. “But if they had good lawyers then you probably had force majeure terms in their agreements; that may have given them some financial relief.”
Force majeure clauses have become more common since the pandemic, especially in the sports industry, as the health crisis has made fulfilling deliverables difficult if not impossible at times. Battin says Delta’s sponsorship agreement hasn’t changed beyond being pushed back one year, owing to the Tokyo Games delay.
Delta (NYSE: DAL) has become the official airline for Team USA after United Airlines decided not to renew its deal with the USOPC. Time will tell how the airline giant will make up for lost opportunities that occurred over the last year. But Burton and others believe the long-term agreement allows for more flexibility in future host cities: Paris (2024), Milano Cortina (2026) and Los Angeles (2028).
As it prepares for the country’s first U.S. summer games since 1996, LA 28 remains firm on its $2.5 billion domestic sponsorship goal, according to someone familiar with the plans. LA 28 aims to add long-term partners that will help build the story with a longer runway than just four years out.
Delta is among founding partners that made sizeable investments ahead of Beijing, joining NBCUniversal and Salesforce (NYSE: CRM). Nike (NYSE: NKE), Deloitte and Ralph Lauren also have smaller agreements.
Beijing was already considered the weakest opportunity of the upcoming games, especially for domestic brands. Veteran sports marketer Ricardo Fort says the timing of the announcement was bad luck for Delta but is skeptical the company would’ve been better off partnering later, as there are potential benefits to being the first official partner. It’s believed that other domestic companies will deal with a higher price point by waiting.
“When you sign up with LA, you sign up with Team USA and have the rights to promote,” said Fort, the former head of global sponsorships at Coca-Cola. “The games after Beijing are going to be very popular… I think some brands are waiting. I wouldn’t be surprised if there were announcements after Beijing.”
Delta joined other Team USA partners by deciding last year to not to send employees to Beijing. Attention will immediately turn to Paris at the conclusion of the winter games. Delta acknowledges the eight-year partnership hasn’t rolled out ideally so far, but Battin remains hopeful there are better times ahead.
“We’re dipping our toe in the water this year,” she said, “and as we move toward LA28, it’s going to be a full team effort.”
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