New sponsorship signing breaking a long-standing IOC rule

Leadership is never an easy cross to bear, and no leadership decision made is perfect. Times and circumstances change; they aren’t static parameters. The recent announcement by the 2028 Los Angeles Summer Olympics Local Organising Committee (LA2028) reflects an important change to the established status quo and what can be considered the accepted normal.

The LA2028 announcement hit global news a few days ago, with an announcement that will resonate with anyone with an interest in Olympic history and the International Olympic Committee (IOC) and Olympic business model.

The LA2028 announcement of their groundbreaking decision that venues at the LA 2028 Olympics will be allowed to have sponsor names, breaking a long-standing IOC rule. It is not a surprise that the concept was a long time coming. I recall discussing such an approach with various individuals over many years—including Michael Phillips during his tenure as SporTT chairman.

Even though those in the know may not publicly say it, the reality is the IOC business model has been under stress for a while now. It has become unsustainable given market trends and changes in the global economic environment. It’s a change that is necessary, and it’s not by guess or accident that it’s happening in Los Angeles. As had happened in 1984. Los Angeles didn’t agree to host the 2028 Olympics to lose money. That’s not in their mindset. Their hard-nosed focus on the numbers may not always sit well with the IOC conservatives. Nonetheless, just as they disrupted the financial model in 1984. They will do the same with 2028. The change cannot be stopped or delayed. It’s that time again.

Sponsors that already have naming rights will be given exclusive access to sponsorship of the venue.

According to olympics.com, the Los Angeles 1984 Olympics significantly shifted the IOC’s marketing policy by introducing a more commercial and private-sector-driven approach. This involved a shift from relying on public funding to securing corporate sponsorships and maximising revenue through television rights. The success of the Los Angeles model, particularly in generating revenue and attracting sponsors, influenced the IOC’s long-term strategy, leading to the development of the TOP (The Olympic Partners) programme.

Los Angeles 1984 left an influential legacy. It created a new financial model which became a template for future editions of the Olympic Games: Effective planning, smart use of resources and making the most of a dynamic sponsorship market to increase revenues injected new life into the Olympic Games and provided a financial blueprint for future organising committees. A surplus of USD 233 million was generated by the Los Angeles Olympic Organising Committee, 40 per cent of which was later invested to create the LA84 Foundation, which supports youth sport programmes and public education in the city and advocates for the important role sports participation plays in positive youth development. The remaining 60 per cent was given to the United States Olympic Committee to be used for sports development in the country.

The sponsorship programme developed by the Los Angeles 1984 Organising Committee was a hallmark of the Games and represented a major revenue stream. By guaranteeing product and service exclusivity in specific categories, the Committee was able to leverage larger sums.

A total of 34 companies made financial and value-in-kind contributions in exchange for exclusive sponsorship agreements that became a model example for the IOC’s commercial initiative known as The Olympic Partner (TOP) programme.

Los Angeles is at it again. Just as they did in 1984, so will they do in 2028. The impact of their upending of the IOC financial model will reverberate for many Olympics to come in the future.