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.
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"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.
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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.
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(END) Dow Jones Newswires
June 16, 2017 12:22 ET (16:22 GMT)