5 Olympic Sponsors Taking a Big Gamble on Sochi

PORTLAND, Ore. (TheStreet) -- The 2014 Sochi Winter Olympics have cost more than $50 billion, are being held in a highly disputed portion of Russia's Caucasus region and have drawn attention to Russia's record of corruption, its civil rights offenses against its LGBT community and Vladamir Putin's regime in general.

Sponsors must be psyched about this, huh?

With companies spending $100 million just to be a Worldwide Olympic Partner and an additional $300 million to $400 million on product launches and marketing tailored to the event, getting a return on investment this year is going to require a whole lot of gritted teeth and faked smiles.


WATCH: The Winter Olympics in Sochi Mean Marketing Gold to Advertisers

As the folks at BuzzFeed learned through their noble but ultimately infuriating exercise in corporate public-relations boilerplate reading, the Olympics' top sponsors are going to use the most measured language possible until the Opening Ceremonies begin and the first games are being played. After than point, they seem to be hoping folks will just watch the games, see their pretty commercials, forget everything going on beyond the venues and, hopefully, buy some of their products.

It's a lofty expectation, considering the Olympic Games have never been played in a vacuum. Global events not only find a way to seep in, but have become fixtures in what's basically a nationalist competition being conducted under a thin gauze of global unity. The world doesn't stop turning once the torch is lit, which the viewing public and host countries have been reminded of on several occasions.

The markets don't stop either, which makes the corporate stake in these events all the more substantial. The following five companies make up just half of the Sochi Games' Worldwide Olympic Partners, but they play an outsized role in bolstering and marketing its events. Here's just a glimpse of what each contributes:

Coca-Cola
Market cap: $166 billion

Coca-Cola has served as an Olympic sponsor since 1928 and has served as the games' official non-alcoholic beverage sponsor since 1986. Its partnership agreement runs through 2020 and continues to give Coca-Cola a huge global stage for its product.

Once it got on that stage this year, though, all it heard was feedback. Gay rights groups took its 1971 commercial that promised to buy the world a Coke and set its upbeat soundtrack to scenes of protesters in Russia being beaten for demonstrating against the country's federal law barring "homosexual propaganda."

Activists also took to Coca-Cola's website and used a feature that allowed them to create their own Coke cans using Coca-Cola's trademark script to make cans that read "Haters," "LetsAllBeGay," "HelpLGBTInRu" and "Blood Money." To be fair, Coca-Cola hasn't exactly escaped fire in its home country, either. A Coca-Cola Super Bowl ad featuring America The Beautiful being sung in the languages of the nation's various immigrant communities caught heat both for its multiculturalism and for using that multiculturalism to sell soda. The multinational soda giant faces so much opposition from all sides that, once again, it is using the Olympics as a launching point for its global anti-obesity campaign -- to fight obesity it might have just played a tiny little role in creating.

McDonald's
Market cap: $93.1 billion

Think McDonald's is even slightly concerned about taking a bath on its Olympic sponsorship? Please. Worrying about such things is so 30 years ago.

Back in 1984, McDonald's had the grand idea of running a promotion called "When The U.S. Wins, You Win" to celebrate the Summer Olympics in Los Angeles. Customers got a scratch ticket containing the name of any Olympic event. If the U.S. won a medal in that event, customers got a Big Mac, fries or a Coca-Cola, depending which medal the U.S. won.

Unfortunately for McDonald's, the Soviet Union and its buddies in East Germany decided to thank the U.S. for boycotting the 1980 Summer Olympics in Moscow by not showing up in California (remember what we said about global politics and the Olympics?). The last time everyone played nicely, at the Summer Games in 1976, the Soviets and East Germans took home a combined 215 medals. With those two sitting out the 1984 games, guess where the next most-dominant group of athletes came from?

The U.S. ended up winning 174 medals in 1984, including 83 gold medals. McDonald's lost a bundle on the promotion and ended up being skewered for it by Krusty The Clown in one of the greatest cultural side jokes The Simpsons ever made.

By that measure, McDonald's having its #CheersToSochi Twitter promotion hijacked by activists just two years after critics slammed the chain with its own #McDStories hashtag doesn't seem so bad. If you can created an empire by frying food and still somehow be a cornerstone sponsor of an event built around athleticism and fitness, you can't really ask for more out of the Olympics.

Visa
Market cap: $137.3 billion

The longtime Olympic credit-card sponsor should consider itself lucky that there are a few years between it and its "everywhere you want to be" slogan.

A Worldwide Olympic Partner since 1986, Visa's most pressing Olympic issues to this point involved handling the entire event's credit card purchases and making sure its athletic spokespeople participated in the event. It didn't get so lucky this year, as spokeswoman and U.S. skier Lindsay Vonn was injured well before the Sochi games, but normally it's able to avoid most of the event's extracurricular issues.

That slammed to a halt this year when Visa was targeted by activists pressing it to speak out against the Russian government and suggesting that protesters use their Visa cards to bail themselves out of jail. There are talking points that Visa's staff would like to hit before the Olympics, but we're not sure if its chief brand officer's statement to The New York Times in January is among them:

"We have a strong anti-discrimination policy and we will make sure we will have all sorts of guarantees our guests and employees are well taken care of."

That doesn't exactly make Sochi sound like someplace anyone wants to be.

Dow
Market cap: $53.4 billion

The "official chemistry company" of the Olympic Games only joined the top-tier team in 2010, and the company has been named the "official carbon sponsor" of the Sochi games.

With the games already well over their $12 billion budget and speculation putting some of that overage money right into the hands of Russian oligarchs in the oil business, it doesn't seem as if carbon swaps and climate offsetting were high on the priority lists of the planning committee. But, hey, you can't blame a company for trying.

After a checkered history that dotted the U.S. with nearly 100 Dow-affiliated Superfund sites (including vast stores of nuclear waste); scorched Vietnam with napalm; doused that same country in Agent Orange; left women around the world with ruptured silicone breast implants; and left itself open to wrongful death claims after taking over Union Carbide years after a chemical disaster in Bhopal, India, took thousands of lives, Dow is born-again green. It really took its carbon-reduction mission to heart in Vancouver four years ago and wants to apply energy-efficient technology and reduced-emissions vehicle to Russia's infrastructure, industry and agriculture to reduce Sochi's carbon footprint.

That last bit is seen as a huge portion of its job, as farming areas in Stavropol and Voronezh have been singled out as terribly inefficient. At any other Winter Games, Dow might face a whole lot more scrutiny for plans that, on their surface, look like a public-relations greenwash. In Russia, however, Dow has not only free rein to spend as much as it likes on these initiatives, but may end up making one of the most positive contributions of the games.

GE
Market cap: $247.4 billion

No, they don't own U.S. Olympic broadcaster NBC anymore and didn't have to shell out the $775 million NBC paid for the rights to broadcast the Sochi games alone, but GE is more deeply invested in the Olympics than any of the above sponsors.

It's not even close.

GE serves as the Olympics' official sponsor for energy generation systems; energy distribution systems; "health care: diagnostic imaging"; monitoring and electronic medical records technology; lighting fixtures and systems; aircraft engines; rail transportation; water treatment facilities and services; and equipment and transportation management. That is one sprawling, old-school conglomerate.

Thus, when critics accuse it of ignoring the more unsavory aspects of this year's Olympic games, it doesn't just offer the same "as an Olympic TOP partner" canned response of its burger-and-soda counterparts. It gets right into the meat of the issue. At the very least, it throws the blame right back at the International Olympic Committee that not only selected Sochi as a venue, but squeezed sponsors for multi-Olympiad deals without making them fully aware such a thing was an option.

"GE believes the Olympic Movement has many positive influences beyond the sports arena," Leigh Farris, a spokeswoman for the company, said in an email to BuzzFeed. "GE speaks regularly with the IOC on a variety of topics, including issues of great concern like human rights. We strongly support the IOC's recent statement that sport is a human right and the Olympic Games should be open to all. We expect the IOC to uphold human rights in every aspect of the Games."

That's the response of a champion right there. GE bought in for the same reason most sponsors did: To be associated with the positive, communal aspects of the games that feel all warm and fuzzy and put people in a buying and investing mood. They didn't sign on to become an arm of the Putin administration or to insert themselves into political and civil debates that undermine the broad appeal that a company as large as theirs so desperately needs.

As is the case with any large, multinational company, GE has plenty of problems of its own to worry about. Labor issues, political tussles, environmental concerns -- the activists associated with all of them. They don't need to be thrown into yet another scrum and don't seem particularly pleased with the IOC for putting them in this position.

Yes, the Worldwide Olympic Partners have reason to fret about the Sochi games, but the IOC should be similarly nervous about losing those partners thanks to the tight spot it's put them in.

-- Written by Jason Notte in Portland, Ore.

>To contact the writer of this article, click here: Jason Notte.

>To follow the writer on Twitter, go to http://twitter.com/notteham.

>To submit a news tip, send an email to: tips@thestreet.com.

RELATED STORIES:
Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.

If you liked this article you might like

24 Stocks Hedge Funds Are Loving Right Now

24 Stocks Hedge Funds Are Loving Right Now

Inside Goldman Tech Conference: Key Takeaways on Bitcoin, Ethereum and ICOs

Inside Goldman Tech Conference: Key Takeaways on Bitcoin, Ethereum and ICOs

Visa's Correction Looks Completed

Visa's Correction Looks Completed

Handling Your Finances at Any Age: Cramer's 'Mad Money' Recap (Monday 2/12/18)

Handling Your Finances at Any Age: Cramer's 'Mad Money' Recap (Monday 2/12/18)

Jim Cramer: Round Up the Usual Suspects

Jim Cramer: Round Up the Usual Suspects