Dentsu reportedly funded Tokyo's Olympic campaign bid despite IOC contract

Dentsu Inc. was found to have funded over US$6 million to Tokyo's campaign to host the 2020 Olympics, and reportedly lobbied members of the International Olympic Committee (IOC) on behalf of Tokyo, Reuters reported, quoting its sources. Reuters added that these acts were a potential conflict of interest for dentsu, which was also working with the IOC separately to promote the Games.

To help with its effort, dentsu reportedly "endorsed the hiring of a Singaporean consultant by the Tokyo Olympic campaign". According to Reuters, dentsu's role was stated in interview transcripts which was handed over to investigators who were brought on board by the Japanese Olympic Committee (JOC) to investigate potential wrongdoings during Tokyo's campaign.

This comes a year after the advertising giant disassociated itself from allegations that it endorsed Black Tidings, a Singapore-based marketing consultancy firm owned by Ian Tan, to the JOC. Back then, French judicial authorities also investigated corruption claims concerning the bid for 2020 Games in Tokyo. Black Tidings was founded in 2006 but terminated in 2014. Dentsu's spokesperson previously clarified to Marketing that it was contacted by the JOC for feedback on the consultancies that pitched. The spokesperson added that a number of consulting companies made pitches to the bidding committee, after which the committee contacted Dentsu for any information it might have on those consultancies. Dentsu told the committee the extent of its knowledge of those consultancies, the spokesperson said.

However, it was recently discovered that the agency had an active role in the months leading up to the IOC vote to award the Olympics in 2013, even while maintaining its well-established business ties with the IOC, Reuters said. According to Article 10 of the rules of conduct applicable to all cities vying for the Olympic Games from the 2022 bid process onwards, top sponsors and other IOC marketing partners "shall refrain from supporting or promoting any of the cities".

"Consequently, cities may not solicit or accept any such support or promotion from top sponsors and other IOC marketing partners," the IOC said. Furthermore, throughout the host city selection procedure, the applicant and candidate cities’ sponsors or donors "may not conclude any new contract in support of an organisation recognised by the IOC in any form, when there is a risk of a conflict of interests", the IOC added. 

In a new statement to Marketing, Dentsu Group's spokesperson said at that time, the bidding committee was requesting support from business companies as part of raising the necessary funds to carry out a wide range of activities.

"Dentsu Inc. decided to cooperate with the multiple support requests from the bidding committee at that time, and after taking appropriate internal procedures, we donated to the bidding committee. We understand that the bidding committee decided appropriately on the use of donations," the spokesperson said.

Meanwhile, the spokesperson also explained that at that time, its employee who was asked for his opinion by the bidding committee regarding multiple sports field experts and consultants who were selling themselves to the bidding committee, provided the extent of his knowledge that he knew. An individual consultant named Tan was one of them. "It should be noted that there has been no transaction record between Dentsu Inc. and Tan," the spokesperson said.

The spokesperson added that Dentsu Inc. did not have a consultant contract with the bidding committee.

At that time, many experts were asked for their opinions by the committee, and our employee also expressed his opinion. However, this was only a voluntary communication of individual perceptions and was not based on any compensation relationship.

The spokesperson also explained that the bidding committee seemed to have made decisions by referring to various opinions. In the bid activities, the bidding committee makes decisions and implements all activities.

"We understand that the committee took the initiative in fulfilling contracts and conducting business with experts and consultants, including Tan. We have never been involved in the process of the contracts and the execution along with the contracts made by the bidding committee, and since we did not send our employees to the bidding committee at that time, we are not in position to know the internal matters of the bidding committee," the spokesperson said.

The spokesperson also said that it did not violate Article 10 of the IOC guidelines and there is no fact that Dentsu Inc was lobbying.

(Read also: Hitting a home run: Why sponsors of axed sporting events shouldn't lay low)

Separately, after increasing pressure on the IOC to delay the games earlier this year, it was eventually postponed to summer 2021 to safeguard the health of the athletes and everyone involved in the games and the international community.

According to the Tokyo 2020 Olympic Games website, majority of the income covering expenditures related to the operations of the games and programmes for Japanese athletes are expected to come from the Tokyo 2020 marketing programme. The programme includes sponsorship, licensing, and ticket sales, among others. "The Tokyo 2020 Sponsorship Programme plays a vital role for the games as it accounts for an extremely high percentage of the budget which will contribute to the projected income," the website added.

Meanwhile, dentsu recently ditched the "Aegis" name seven years after it acquired Aegis Group, rebranding Dentsu Aegis Network to dentsu international. Dentsu now encompasses two operational networks: dentsu japan network, which oversees dentsu’s agency operations in Japan, and dentsu international, its international business headquarters in London, which oversees dentsu’s agency operations outside of Japan.

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