THE ASAHI SHIMBUN
January 31, 2025 at 13:16 JST
The headquarters of Dentsu Group Inc. in Tokyo’s Minato Ward (Asahi Shimbun file photo)
For many years, Japan's largest advertising company, Dentsu Group Inc., would get the call when help was needed finding sponsors for international sporting events.
But a bid-rigging scandal has triggered a growing movement among Japanese sports organizations and associations to “break free from Dentsu.”
Dentsu was convicted of violating the Anti-Monopoly Law in a bid-rigging case involving the 2020 Tokyo Olympics and Paralympics, and was fined 300 million yen ($1.94 million) by the Tokyo District Court on Jan. 30.
Fallout from the Dentsu scandal is hitting the World Athletics Championships, which will be held in September in Tokyo.
The organizer of the championships is signing sponsors without the involvement of an advertising company.
So far, it has inked contracts with eight companies.
The organizer is working toward a goal of 3 billion yen in sponsorships, but a person in charge said, “We cannot be assured of how many contracts we will be able to secure.”
When Dentsu was in charge of gathering sponsors, the firm's approach was to include a “minimum guarantee” in the contract with the governing body of the event, promising a certain payment even if sponsorship money was not collected.
In this way, Dentsu became the exclusive agent of the Tokyo Games organizing committee with a minimum guarantee of 180 billion yen, and collected approximately 380 billion yen in sponsorship fees.
In 2020, Dentsu also signed a seven-year contract starting from 2022 with the Japanese Olympic Committee and became the group’s exclusive agent.
A minimum guarantee of approximately 28.5 billion yen was provided.
A JOC official said, “We were helped by the contract.”
The 20th Asian Games will be held in 2026 in Aichi Prefecture. Its organizing committee was also initially negotiating to entrust Dentsu with the sponsor-gathering job.
However, Dentsu declined after the scandal came to light.
As a result, the organizer has entrusted a joint venture of four companies, including a local advertising firm, with the task of gathering sponsors.
The organizer expects to receive a total of about 50 billion yen in sponsorship money.
At this point, however, only four companies, including Toyota, are on track to sign contracts for a total of about 7 billion yen.
A person in charge said, “Compared to Dentsu, which has expertise in this area, we have our work cut out for us, but we are working on it as we go along.”
Starting from fiscal 2024, the Japan Sports Agency has encouraged the development of human resources with the knowledge to coordinate international competitions.
A JSA representative said, “This is in order to create a system that allows us to do this without entrusting the entire task to Dentsu.”
A foreign consulting firm has been commissioned to compile the know-how on how to solicit bids, contract out and manage international conventions.
The JSA will hold a lecture on managing sporting events in February.
“We are not saying, ‘Don’t use Dentsu,’” the JSA representative said. “But until now, we have relied heavily on Dentsu and that was not a healthy approach.”
(This article was written by Kento Matsushima, Kogo Shioya and Ayako Fujita.)
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