The “Unknown History” of Dentsu, the “Profitable Olympics Mechanic,” and the Gigantic Interests in the Olympics
The Man Who Seized the Olympic Business” is Takahashi’s Former Boss
Since the revelation of corruption surrounding sponsorship contracts for the Tokyo Olympics and Paralympics, the name “Dentsu” has not gone unnoticed.
When and how was the relationship between the Olympics, the world’s largest sports festival, and Dentsu, the largest advertising company in the world, established? Nonfiction writer Ryu Honma, author of “The Deadly Sins of the Tokyo Olympics” (Chikuma Shinsho) and “Dentsu’s Gigantic Interests” (Schizo), asked.
The Olympics became commercialized from the 1984 Los Angeles games. The Los Angeles Olympics were the first Olympics in which Dentsu entered the Olympic business in earnest. Dentsu signed an exclusive agency contract with the L.A. Organizing Committee, and monopolized the rights to licensing and sponsor sales in Japan.
The process leading up to this point is described in detail in the article “Yoichi Hattori, the Man Who Seized the Olympic Business,” a series of articles on Dentsu’s business information website, Dentsu Bulletin. Mr. Hattori (deceased) was the former boss of Haruyuki Takahashi, a Dentsu alumnus and former director of the Tokyo Olympics Organizing Committee.
The 1980 Moscow Olympics, which preceded the Los Angeles Olympics, were to be managed by Hakuhodo, not Dentsu. But when the Soviet invasion of Afghanistan forced Japan to boycott the games along with other Western nations, Hakuhodo and TV Asahi, which had the exclusive rights to broadcast the games in Japan, suffered heavy losses.
Dentsu must have been determined not to let the next one slip away, and naturally, it made inroads into the organizing committee for the 1984 L.A. Olympics. And even after the L.A. Olympics, Dentsu never relinquished its rights as the exclusive agent for the Japanese market.
An interesting description is given in the “Dentsu Bulletin’s” serial article, “The Olympic Business.
–The Asahi Shimbun of September 13, 1988. Hattori appeared in the paper just before the opening of the Seoul Olympics as a “lucrative Olympics gimmick. （Hattori explained that even if profits from the sale of the Olympic logo and other activities are low, the advertising agency business will snowball, and the growth of personal connections will eventually lead to great benefits. — “I think Dentsu is amazing,” he said.
What I admire about Dentsu is their willingness to make up-front investments. What I find amazing about Dentsu is that they are willing to make up-front investments. Even if they make an up-front investment of hundreds of millions of dollars, they are fine with it as long as they can recoup it years later. While making upfront investments in this way, we have built up a structure as a comprehensive advertising agency. I think the Tokyo Olympics was the culmination of all these efforts.
A Corruption Affair That Was Meant to Happen
However, the corruption incident occurred at the Olympics, the culmination of Dentsu’s efforts.
By leaving everything in Dentsu’s hands, it created the groundwork for the kind of corruption that occurred at the Olympics,” said Takahashi, a former senior managing director of Dentsu. Mr. Takahashi is a former senior managing director of Dentsu. Anything he says or does goes. I think the corruption case was bound to happen.
At the moment, the JOC (Japanese Olympic Committee) seems to think that it will not abandon the Sapporo Olympics bid, but unless Dentsu is removed from the bidding process, I believe that the same thing will happen again.
But can Dentsu be removed from the bidding process?
I think it would be possible if Yasuhiro Yamashita, the JOC president, decides to remove Dentsu from the bidding process.
But before that happens, I think the JOC will have no choice but to abandon the bid. If the image of the Olympics has deteriorated so much, sponsors will not be attracted in the first place. After the L.A. Olympics, the Olympics have been structured in such a way that it is impossible to hold an Olympics without sponsors.
From “Black” to “Gray”…
Fresh in our memories, Dentsu was subjected to social criticism for the overwork suicide of a new employee and the re-commissioning of the Sustaining Benefit Program and the Myna Point Program. Mr. Homma, an advertising industry expert from Hakuhodo, also pointed out Dentsu’s oligopoly in the advertising market, its acquisition of rights to various international sporting events, and its control over the media. He once tweeted on Twitter, “I criticize Dentsu because too much power is concentrated in the hands of the company, but many people do not know it.
So what kind of company is Dentsu?
Dentsu is the world’s fourth- or fifth-largest group of companies, and on its own is the world’s largest advertising agency in terms of sales. The total sales of the group as a whole amount to about 5 trillion yen.
The Japanese advertising industry is unique, and both Dentsu and Hakuhodo can have any number of sponsors in any industry. Moreover, they can either buy ad space for their sponsors or sell ad space for the media; they are also responsible for commercial production and sales promotions.
This has also prevented negative press coverage and critical articles about the sponsors from being published in the public. After the bursting of the bubble economy, major media outlets, suffering from advertising cost reductions, have begun to make discoveries without a request from Dentsu. Of course, the media also do not report Dentsu’s misdeeds in depth.”
Incidentally, Dentsu was named a “Black Company of the Year” in 2016 when a new employee’s overwork suicide was recognized as a workplace accident.
However, even though Dentsu has been branded a black company and its brand image has fallen to the ground, the company’s position in the advertising industry has not been shaken at all. Its corporate structure has not changed in the slightest.”
In “Dentsu’s Gigantic Interests,” Mr. Homma points out that Dentsu “is dedicated to its own self-aggrandizement and profit, and places the highest value on achieving its goals.” “It is thoroughly devoted to the sponsors who pay its money, but has no sense of returning the profits it makes to society.
Dentsu seems to be such a company.
Dentsu and the Organizing Committee raised a large amount of money for the Tokyo Olympics, but in the end, a large amount of taxpayer money was used. But that is not important to Dentsu. For them, success means making a profit for themselves.
Can a large company with sales of ¥5 trillion continue to put profit first? Is it really necessary for a company with sales of 5 trillion yen to continue to put profit first? It is time for them to think about social contribution. But then again, if they put profit first, they wouldn’t be Dentsu.
Dentsu has adopted the “Oni Jissoku,” a set of 10 rules, including “Don’t let go when you work on something, and don’t let go even if it kills you. It seems that the spirit of the “Five Rings of Profit” has been passed down from generation to generation. Will the day ever come when Dentsu opens its eyes to social contribution activities?
Ryu Honma, a nonfiction writer, was born in Tokyo in 1962, graduated from Dokkyo University’s Faculty of Law in 1985, and joined Hakuhodo in 1989, where he worked in sales until leaving in 2006. (Gakushu Kenkyusha) in 2009.
He has written about the influence of major advertising agencies on the media and the impact of advertisements on politics and society, taking up the nuclear safety myth, the referendum on constitutional reform, and the Tokyo Olympics as his topics of study. His books include “Nuclear Power Propaganda” (Iwanami Shinsho), “Media Manipulation of the Constitutional Referendum” (Iwanami booklet), “Dentsu Giant Interest” (Saizo), “Black Volunteer” (Kadokawa Shinsho), “The Day Advertising Kills the Constitution” (Shueisha Shinsho, co-author), and “Tokyo Olympics’ Deadly Sin” (Chikuma Shinsho).
Interview and text by： Sayuri Saito