This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.nytimes.com/2018/02/07/business/olympics-samsung-south-korea.html
The article has changed 3 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| For Korea Inc., Money and Politics Make an Awkward Olympics | For Korea Inc., Money and Politics Make an Awkward Olympics |
| (about 7 hours later) | |
| HONG KONG — Wherever they are held, the Olympics are a chance for big-name local sponsors to show home-country pride, associate their brands with athletic values and splash their logos before millions of eyeballs. | HONG KONG — Wherever they are held, the Olympics are a chance for big-name local sponsors to show home-country pride, associate their brands with athletic values and splash their logos before millions of eyeballs. |
| This month in South Korea is set to be different. | This month in South Korea is set to be different. |
| The country is hosting its first Winter Games amid a national reckoning about big business, politics and the tentacles of influence that link them. Calls for a cleanup intensified this week after the heir apparent at Samsung, a top-tier Olympic sponsor, was freed from prison by a court ruling that reduced and suspended his sentence for bribery. | The country is hosting its first Winter Games amid a national reckoning about big business, politics and the tentacles of influence that link them. Calls for a cleanup intensified this week after the heir apparent at Samsung, a top-tier Olympic sponsor, was freed from prison by a court ruling that reduced and suspended his sentence for bribery. |
| The Pyeongchang Games themselves stand as a symbol of the cozy ties between South Korea’s government and Samsung, its most powerful conglomerate. | The Pyeongchang Games themselves stand as a symbol of the cozy ties between South Korea’s government and Samsung, its most powerful conglomerate. |
| The company’s chairman, Lee Kun-hee, is a longtime member of the International Olympic Committee and lobbied for years behind the scenes to bring the Winter Games to South Korea. The government saw Mr. Lee as so pivotal to its Olympic dreams that after he was convicted of tax evasion in 2008, the country’s president then pardoned him expressly so he could resume lobbying for Pyeongchang. | The company’s chairman, Lee Kun-hee, is a longtime member of the International Olympic Committee and lobbied for years behind the scenes to bring the Winter Games to South Korea. The government saw Mr. Lee as so pivotal to its Olympic dreams that after he was convicted of tax evasion in 2008, the country’s president then pardoned him expressly so he could resume lobbying for Pyeongchang. |
| Companies and commerce have long been part of the Olympics, of course. Critics of the 1996 Summer Games in Atlanta derided them as the “Coca-Cola Olympics” for the marketing blowout undertaken by that local benefactor. | Companies and commerce have long been part of the Olympics, of course. Critics of the 1996 Summer Games in Atlanta derided them as the “Coca-Cola Olympics” for the marketing blowout undertaken by that local benefactor. |
| But in South Korea, the recent atmosphere of scandal has made it an especially awkward time for the country’s leading corporate names to be plastering Olympic venues with logos and showering athletes with freebies. The corruption allegations that ensnared Mr. Lee’s son and heir — and that last year felled Park Geun-hye, then South Korea’s president — involved bribery via sports sponsorships. | But in South Korea, the recent atmosphere of scandal has made it an especially awkward time for the country’s leading corporate names to be plastering Olympic venues with logos and showering athletes with freebies. The corruption allegations that ensnared Mr. Lee’s son and heir — and that last year felled Park Geun-hye, then South Korea’s president — involved bribery via sports sponsorships. |
| “The zeitgeist is calling for chaebol reform,” said Sun Dae-in, director of research at SDInomics, a think tank in Seoul, the capital, using the Korean term for the family-run business empires. “That puts the chaebol in a very sensitive position.” | “The zeitgeist is calling for chaebol reform,” said Sun Dae-in, director of research at SDInomics, a think tank in Seoul, the capital, using the Korean term for the family-run business empires. “That puts the chaebol in a very sensitive position.” |
| One result: Korean companies, fearful that their contributions would be “misinterpreted,” were skittish for a long time about sponsoring the Pyeongchang Games, said Chang Sea-jin, a professor at the National University of Singapore. | One result: Korean companies, fearful that their contributions would be “misinterpreted,” were skittish for a long time about sponsoring the Pyeongchang Games, said Chang Sea-jin, a professor at the National University of Singapore. |
| Last April, when members of the Pyeongchang Organizing Committee met with South Korea’s finance minister to discuss the committee’s financial troubles, its chairman said that the bribery scandal was one reason organizers were having difficulty attracting corporate sponsorships, according to the Yonhap news agency. | Last April, when members of the Pyeongchang Organizing Committee met with South Korea’s finance minister to discuss the committee’s financial troubles, its chairman said that the bribery scandal was one reason organizers were having difficulty attracting corporate sponsorships, according to the Yonhap news agency. |
| The committee finished raising the $875 million in sponsorship money it needed only after President Moon Jae-in called on government companies, including the state electric utility, to pitch in. | The committee finished raising the $875 million in sponsorship money it needed only after President Moon Jae-in called on government companies, including the state electric utility, to pitch in. |
| “The political issues have not directly affected the planning or preparations of the Games, but they were certainly a distraction for local engagement,” a spokeswoman for the Pyeongchang committee said by email. She declined to comment on how far the committee had been behind on its funding before Mr. Moon’s appeal last July. | “The political issues have not directly affected the planning or preparations of the Games, but they were certainly a distraction for local engagement,” a spokeswoman for the Pyeongchang committee said by email. She declined to comment on how far the committee had been behind on its funding before Mr. Moon’s appeal last July. |
| For many South Koreans, conflicted feelings toward the nation’s business champions have already dampened the Olympic spirit. Last week, Ju Mi-ryung, 41, traveled an hour with her son to an official Olympic exhibition center in Seoul to show him the curling demonstration and the virtual-reality bobsledding. | For many South Koreans, conflicted feelings toward the nation’s business champions have already dampened the Olympic spirit. Last week, Ju Mi-ryung, 41, traveled an hour with her son to an official Olympic exhibition center in Seoul to show him the curling demonstration and the virtual-reality bobsledding. |
| “It’s a problem that the chaebol score political points through sporting events like this,” Ms. Ju said. | “It’s a problem that the chaebol score political points through sporting events like this,” Ms. Ju said. |
| Sponsoring the Olympics has been a dicey proposition this year for other reasons, too. Mr. Moon’s decision to field a joint hockey team with North Korea has proved controversial at home. | Sponsoring the Olympics has been a dicey proposition this year for other reasons, too. Mr. Moon’s decision to field a joint hockey team with North Korea has proved controversial at home. |
| Still, the chaebol are not skipping Pyeongchang entirely. | Still, the chaebol are not skipping Pyeongchang entirely. |
| Samsung created the 2018 Games’ official app. It is handing out 4,000 special-edition Galaxy Note 8 smartphones to athletes and Olympic staff. And it provided two Dutch speed skaters with suits dotted with sensors to help them train. | Samsung created the 2018 Games’ official app. It is handing out 4,000 special-edition Galaxy Note 8 smartphones to athletes and Olympic staff. And it provided two Dutch speed skaters with suits dotted with sensors to help them train. |
| One subsidiary of the LG Group, meanwhile, built the Pyeongchang Organizing Committee’s head office; another produced promotional videos and ads for the Games. Hyundai will be showing off its hydrogen-powered and self-driving cars at Pyeongchang. Korean Air has painted an airplane with the official Olympic mascots: a white tiger named Soohorang and a bear named Bandabi. | One subsidiary of the LG Group, meanwhile, built the Pyeongchang Organizing Committee’s head office; another produced promotional videos and ads for the Games. Hyundai will be showing off its hydrogen-powered and self-driving cars at Pyeongchang. Korean Air has painted an airplane with the official Olympic mascots: a white tiger named Soohorang and a bear named Bandabi. |
| On the whole, though, South Korean sponsors are marketing themselves less aggressively at Pyeongchang than they have at previous major sporting events, said Choi Dong-ho, a sports commentator in Seoul. When South Korea co-hosted the World Cup in 2002, Samsung kicked off a global advertising blitz that included an enormous billboard in Times Square in New York. | On the whole, though, South Korean sponsors are marketing themselves less aggressively at Pyeongchang than they have at previous major sporting events, said Choi Dong-ho, a sports commentator in Seoul. When South Korea co-hosted the World Cup in 2002, Samsung kicked off a global advertising blitz that included an enormous billboard in Times Square in New York. |
| Today, by contrast, Samsung is being “extremely cautious,” said Nam Lee, a professor at Chung-Ang University in Seoul. “They don’t want to wake up people’s concealed bad feelings against Samsung and Chairman Lee.” | Today, by contrast, Samsung is being “extremely cautious,” said Nam Lee, a professor at Chung-Ang University in Seoul. “They don’t want to wake up people’s concealed bad feelings against Samsung and Chairman Lee.” |
| Hyundai said its promotional activities for Pyeongchang were extensive and had “no precedent.” Other chaebol companies, however, shied away from the topic. Samsung declined to comment on how its marketing for Pyeongchang stacked up against previous Games. An LG spokeswoman said the group’s subsidiaries were not permitted, under the terms of their sponsorship, to promote their own brands in connection with the Games. A Korean Air spokesman declined to comment. | Hyundai said its promotional activities for Pyeongchang were extensive and had “no precedent.” Other chaebol companies, however, shied away from the topic. Samsung declined to comment on how its marketing for Pyeongchang stacked up against previous Games. An LG spokeswoman said the group’s subsidiaries were not permitted, under the terms of their sponsorship, to promote their own brands in connection with the Games. A Korean Air spokesman declined to comment. |
| A backlash against big business has been a long time coming in South Korea. For decades governments have tolerated lawbreaking tycoons so long as their companies bolstered the nation’s economic might — or, in the case of the Olympics, the nation’s global prestige. | A backlash against big business has been a long time coming in South Korea. For decades governments have tolerated lawbreaking tycoons so long as their companies bolstered the nation’s economic might — or, in the case of the Olympics, the nation’s global prestige. |
| Three leaders of Pyeongchang’s winning campaign to host the Winter Games were industrialists who had, at one point or another, been convicted of financial crimes: Mr. Lee of Samsung, Cho Yang-ho of Korean Air and Park Yong-sung, formerly of the Doosan conglomerate. | Three leaders of Pyeongchang’s winning campaign to host the Winter Games were industrialists who had, at one point or another, been convicted of financial crimes: Mr. Lee of Samsung, Cho Yang-ho of Korean Air and Park Yong-sung, formerly of the Doosan conglomerate. |
| Samsung’s role started earlier. | Samsung’s role started earlier. |
| Pyeongchang’s long march to the Winter Games began in 2003, when the mountain town went up against Vancouver, British Columbia, and Salzburg, Austria, for the 2010 Olympics. When International Olympic Committee members arrived in Prague to vote, they found the city festooned with blue-and-white Samsung banners. The company also sponsored a music festival and running race there. Pyeongchang organizers said that Samsung’s activities weren’t connected to the Olympic bid. | |
| Vancouver won in the end, but only by a hair. Pyeongchang’s strong showing surprised many. | Vancouver won in the end, but only by a hair. Pyeongchang’s strong showing surprised many. |
| Four years later, Samsung’s Mr. Lee took it upon himself to support Pyeongchang for the 2014 Winter Games. But Sochi, Russia, prevailed. And in 2008, Mr. Lee stepped back from the I.O.C. after being indicted on charges of tax evasion. | Four years later, Samsung’s Mr. Lee took it upon himself to support Pyeongchang for the 2014 Winter Games. But Sochi, Russia, prevailed. And in 2008, Mr. Lee stepped back from the I.O.C. after being indicted on charges of tax evasion. |
| He was pardoned the next year. The Olympic committee reprimanded him but reinstated his membership in 2010. | |
| “We are delighted with the news,” Park Yang-chun, an official with the Korean Olympic Committee, told reporters then. | “We are delighted with the news,” Park Yang-chun, an official with the Korean Olympic Committee, told reporters then. |
| In 2010, as Pyeongchang geared up to try a third time for the Olympics, the town’s campaign came under scrutiny for possible conflicts of interest. Samsung had inked a sponsorship agreement with FISA, the international rowing federation, whose head at the time was a voting I.O.C. member. Korean Air, whose chief executive was leading Pyeongchang’s bid committee, had signed a similar deal with the International Skating Union, whose president was also eligible to vote. | In 2010, as Pyeongchang geared up to try a third time for the Olympics, the town’s campaign came under scrutiny for possible conflicts of interest. Samsung had inked a sponsorship agreement with FISA, the international rowing federation, whose head at the time was a voting I.O.C. member. Korean Air, whose chief executive was leading Pyeongchang’s bid committee, had signed a similar deal with the International Skating Union, whose president was also eligible to vote. |
| The committee’s ethics commission issued a warning but decided that Samsung’s deal didn’t fall afoul of the rules. Korean Air and the skating union agreed to postpone their deal until after the 2018 host city had been chosen. | The committee’s ethics commission issued a warning but decided that Samsung’s deal didn’t fall afoul of the rules. Korean Air and the skating union agreed to postpone their deal until after the 2018 host city had been chosen. |
| As the committee prepared to decide, in 2011, among Pyeongchang, Munich and Annecy, France, Mr. Lee crisscrossed the globe to ask other I.O.C. members for their backing. | |
| Before the vote, in a not-very-subtle nod to Mr. Lee’s efforts, the head of the Annecy delegation told reporters: “We are here to put on an authentic Games. We are not there to get a trophy for a company or a country.” | Before the vote, in a not-very-subtle nod to Mr. Lee’s efforts, the head of the Annecy delegation told reporters: “We are here to put on an authentic Games. We are not there to get a trophy for a company or a country.” |
| Pyeongchang won. | Pyeongchang won. |
| “This is a victory for our whole nation,” the normally stony Mr. Lee told reporters, his eyes wet with tears. | “This is a victory for our whole nation,” the normally stony Mr. Lee told reporters, his eyes wet with tears. |