Faster, Higher, Stronger: LA28 On Track For Olympic Sponsorship Revenue Record
November 30, 2021
With LA 2028 reportedly already over halfway to achieving its revenue target, Tim Crow provides his latest ‘Crowdown’ and sets out why he has always believed that LA will set a new record for Olympic domestic sponsorship revenue, and what that number could be.
The news overnight that LA 2028 has ‘well over half’ of its revenue contracted – a statement made by Games chair Casey Wasserman to the Los Angeles City Council’s Games Committee – will no doubt come as a surprise to many.
After all, we’re seven years away from the Games, still fighting a global pandemic which decimated Tokyo 2020 and world sport’s revenues, and uncertainty reigns.
But as I’ve been saying since the early days of the LA bid, the closest thing you can get to a financial certainty in sport is that LA will smash its revenue forecasts by delivering a new Olympic record for domestic sponsorship revenue.
This has not been the consensus in the industry. Anything but.
Back in 2019, when LA 2028 reset its domestic revenue sponsorship forecast at $2.5 billion (up from the $1.9 billion it forecast in its bid), the mainstream US and sports business media universally described that figure as ‘ambitious’.
At the time, I wrote that, far from being ambitious, it was in fact very conservative, and Casey Wasserman’s statement yesterday has only strengthened that view.
“There’s the undeniable fact that Corporate America loves the Olympics.”
Let’s start with the strong correlation between the size of economies and host nation domestic Olympic sponsorship revenue.
London 2012 generated over $1billion. Tokyo 2020 generated over $3 billion.
Japan’s GDP is almost twice as big as the UK’s. US GDP is almost four times bigger than Japan’s. And the GDP of California alone makes it the fifth biggest economy in the world.
Then there’s the undeniable fact that Corporate America loves the Olympics. Almost half of the IOC’s global partners are US-based businesses.
NBC Universal’s $12 billion Olympic broadcast contract makes it by far the biggest investor globally in the Games.
NBCU’s parent company Comcast is one of the three top tier domestic sponsors – the others being Nike and Delta – which LA 2028 has already signed, in deals each reportedly running well into nine figures that took a very big chunk out of that $2.5 billion forecast.
And LA 2028 is still over seven years away. Having so much more time is another factor in why I believe LA will smash all previous Games sponsorship revenue records.
“That gave it unprecedented time to innovate the Olympic sponsorship offer and prepare and operationalise its go-to-market strategy.”
Up until the IOC handed LA the Games, Olympic organising committees had a seven-year event horizon – total. LA’s was eleven. That gave it unprecedented time to innovate the Olympic sponsorship offer and prepare and operationalise its go-to-market strategy.
We saw the first example of that with its deal with NBCU, which not only de-risked LA’s budget but also added significant value to LA 2028’s top-tier sponsor pitch by integrating into it an NBC media buy, which is clearly already paying dividends for LA judging by the quality and dollar value of its top tier partners and how early they have signed – in the midst of a global pandemic.
So, although the pandemic has once again taught us that there are no certainties in life, I’ll say it again here and now: I believe LA is going to smash its revenue forecast and deliver an historic Olympic domestic sponsorship programme number, which could be as much as $4 billion.