LA28 in financial trouble?

[baron-pierreIV]

Of course, the silence is defeaning but I think LA28 is in great financial trouble. 

#1 - On the TOP level, Toyota and Panasonic have dropped out from that IOC category.  Unless LA28 finds equally generous sponsors, they will have to buy those giant jumbotrons and buy/rent a few hundred vehicles for use during the Games.

#2 - Four years out, they only have Comcast-Xfinity, Delta and Salesforce as the only signed sponsors.  In 1980, when LA84 went into business, they had a dozen top-tier sponsors lined up.  Last week LA28's only new "sponsor" line-up was Cedars-Sinai who will be the Medical Provider for 2028.  No cash from that deal.  

I think the "no advertising in Olympic FOP settings will be a dead duck.  If I were amazon or apple -- why should I pay $75 million to be associated with an event wherein I cannot plaster my brand across the FOP?  I can get the same AND MORE by sponsoring on the World Cup or the Paralympics--and do right by my stockholders. 

And then, sponsoring 34 sports for '28?  Wasserman is biting off more than he can chew.  They will be tightening their budget and be doing major cuts in the coming years.  Of course, LA28 will not expose its vulnerability at this stage or at any time.  

[Bear]

Paris 2024 literally just ended this month, let's wait a bit longer before we start saying things about 2028...

[Bear]

From the LA Times article that came out like 10 days ago:

https://www.latimes.com/sports/olympics/story/2024-09-19/la-2028-olympic-organizers-sign-new-corporate-sponsors

"As of last year, LA28 said it was still $1 billion short of hoped-for sponsorships. Sports economists did not find that figure too concerning given that Olympic organizing committees normally sign the majority of their deals in the four years preceding the Games."

we're still near the start of that 4 year period, so there's still time to sign more sponsors until then.

5 hours ago, baron-pierreIV said:

#2 - Four years out, they only have Comcast-Xfinity, Delta and Salesforce as the only signed sponsors.  In 1980, when LA84 went into business, they had a dozen top-tier sponsors lined up.  Last week LA28's only new "sponsor" line-up was Cedars-Sinai who will be the Medical Provider for 2028.  No cash from that deal. 

There's actually more -

"The private organizers in charge of the 2028 Los Angeles Olympics and Paralympics announced a new corporate partnership Thursday, the latest in a string of deals that will help pay the tab for their $7-billion sporting event."

"The agreement between LA28 and Cedars-Sinai, which will serve as the official medical provider for the upcoming Games, follows similar pacts with companies such as Dick’s Sporting Goods, Cisco and Autodesk."

the current list of sponsors can be found here: https://la28.org/en/our-partners.html (though the Worldwide Partners category will probably have to be updated considering the TOP changes going on)

[sebastien1214]

For Paris, many premium sponsors only signed in the two or three years before 2024. For example, LVMH only signed their contract in 2023, just one year before. I am not worried about LA, especially if there is only a billion left to find.

[baron-pierreIV]

12 hours ago, sebastien1214 said:

For Paris, many premium sponsors only signed in the two or three years before 2024. For example, LVMH only signed their contract in 2023, just one year before. I am not worried about LA, especially if there is only a billion left to find.

Yeah, but Paris knew it could get the French gov't to fill in for any shortfalls.  Not the case for LA28.  And LA28 is embarking on a much more ambitious program.  From the looks of it, Wasserman is determined to stage the BIGGEST Summer Olympic Games ever.  That doesn't come free or cheap.  (Also, Sebastien, LVMH is a case of Paris24 needing them more than LVMH needing the Olympics.) I know LA28 has cash in the bank for now--maybe like $250-300 million, but they already have nearly 200 people on payroll; and they really have to lock things in now.  If Amazon, Apple, Disney aren't signed up, I guess it'll have to be the new Chinese/Indian/Saudi conglos to fill in the missing billions (both for the IOC & LA28),   

[cfm Jeremie]

I don't see how Apple could join with Samsung being a TOP Partner with exclusivity on mobile communication devices.

Disney and Amazon would also be difficult, at least on their content production side, because of Comcast (although Disney could probably do something around "entertainement" but not sure it would be Tier 1).

Does anyone know how much is a Tier 1 deal in LA? For Paris it seems it was between 100 and 150 million Euros.

[Bear]

7 hours ago, baron-pierreIV said:

Yeah, but Paris knew it could get the French gov't to fill in for any shortfalls.  Not the case for LA28.

The City of LA and the State of California are obligated to fill in any shortfalls this time, unlike in 1984.

[Bear]

Again, I maintain it is a bit early to forecast any problems regarding the sponsorships, considering Paris 2024 just ended. It will take some time before we see the effects of the handover (not the video presentation, but the shift in focus to LA28) on potential sponsorships and things like that.

Perhaps if it was 2026 and things still haven't gotten better, then I would agree that it's concerning, but we aren't there yet. The next 2 years I think will be important in this regard.

[sebastien1214]

8 hours ago, baron-pierreIV said:

(Also, Sebastien, LVMH is a case of Paris24 needing them more than LVMH needing the Olympics.) 

What is special about the contract with LVMH is that it is the only one where Macron intervened directly to "facilitate" things (because Macron is close to Bernard Arnault). Paris 2024 needed LVMH just as much as other Tier 1 partners like Carrefour, from this point of view for Paris 2024 in terms of importance it did not make much difference; now yes, LVMH perhaps needed this partnership less than other partners. (certainly also for that reason that Macron intervened, because the negotiations with LVMH still took a lot of time)

There are also major contracts ending this year; we've already talked about this in another thread. Maybe companies that would be potentially interested in doing specific sponsorship for LA28 are potentially considering doing a more global sponsorship deal with the IOC instead (to replace Bridgestone & Intel?) and they're waiting for these contracts to end to decide whether or not; which means that until this is settled...

[baron-pierreIV]

1 hour ago, Bear said:

Again, I maintain it is a bit early to forecast any problems regarding the sponsorships, considering Paris 2024 just ended. It will take some time before we see the effects of the handover (not the video presentation, but the shift in focus to LA28) on potential sponsorships and things like that.

Perhaps if it was 2026 and things still haven't gotten better, then I would agree that it's concerning, but we aren't there yet. The next 2 years I think will be important in this regard.

Yeah, but these things are played out and projected in quadrennia.  I just see LA28 not quite making the same "surplus" that LA84 enjoyed.  

[Josh0108]

On 9/28/2024 at 5:36 PM, baron-pierreIV said:

Of course, the silence is defeaning but I think LA28 is in great financial trouble. 

#1 - On the TOP level, Toyota and Panasonic have dropped out from that IOC category.  Unless LA28 finds equally generous sponsors, they will have to buy those giant jumbotrons and buy/rent a few hundred vehicles for use during the Games.

#2 - Four years out, they only have Comcast-Xfinity, Delta and Salesforce as the only signed sponsors.  In 1980, when LA84 went into business, they had a dozen top-tier sponsors lined up.  Last week LA28's only new "sponsor" line-up was Cedars-Sinai who will be the Medical Provider for 2028.  No cash from that deal.  

I think the "no advertising in Olympic FOP settings will be a dead duck.  If I were amazon or apple -- why should I pay $75 million to be associated with an event wherein I cannot plaster my brand across the FOP?  I can get the same AND MORE by sponsoring on the World Cup or the Paralympics--and do right by my stockholders. 

And then, sponsoring 34 sports for '28?  Wasserman is biting off more than he can chew.  They will be tightening their budget and be doing major cuts in the coming years.  Of course, LA28 will not expose its vulnerability at this stage or at any time.  

Salesforce randomly pulled out a few months ago, with nobody reporting on it.

[baron-pierreIV]

21 minutes ago, Josh0108 said:

Salesforce randomly pulled out a few months ago, with nobody reporting on it.

Right.  I thought that I had read something to that effect.  So they haven't signed anyone major since.  So, I think their corporate income goals will be far short of the projections.  So they really are in arrears now.  

[cfm Jeremie]

On the other hand, with a total of 35 sports (36 if Boxing is finally added), compared to 28 in the candidature phase, there is a potential for significant ticketing target revenue increase.

[Bear]

a good (and recent-ish) write up on the sponsorship process so far that I just found:

https://www.sportico.com/leagues/olympics/2024/la28-boss-paris-games-but-still-chasing-sponsor-target-1234792906/

"To take the Games to the next level, the privately-run LA28 committee must secure the necessary funding. LA28 organizers, Team USA and Comcast continue to move toward its domestic corporate sponsorship goal of $2.5 billion. Hoover, who replaced former CEO Katy Carter two months ago, said LA28 and its joint venture partners are more than 65% done with reaching that long-term goal, with more than $1 billion in gross sponsorship commitments."

"[CEO Reynold Hoover is] confident that LA28 and Team USA will exceed that $2.5 billion sponsorship goal in time, though it’s more beneficial for organizers to collect as much sales revenue up front for assurances and operational purposes since the committee spends roughly 80% of its budget in the 18 months leading up to and through the conclusion of the Games."

this 18 month timeline is where i got my 2026 / 2 years numbers from in a previous message, so hopefully it didn't seem too arbitrary when I included it here:

On 9/29/2024 at 12:39 PM, Bear said:

Perhaps if it was 2026 and things still haven't gotten better, then I would agree that it's concerning, but we aren't there yet. The next 2 years I think will be important in this regard.

 

[baron-pierreIV]

22 hours ago, cfm Jeremie said:

On the other hand, with a total of 35 sports (36 if Boxing is finally added), compared to 28 in the candidature phase, there is a potential for significant ticketing target revenue increase.

With those 5 added sports, yeah, that could mean maybe an additional $40 - 50 million in gross revenue receipts + maybe a similar net amount from sales of Paralympic tickets, so they will exceed original ticket sales projections.  

P.S.  And, of course, Bridgetowne Tires is now out as well.  

This report says SLC'34 is struggling to get its corporate sponsorship program going.  Rather, SLC can't line up their sponsors until LA28 is all done and dusted in 2029.  Thus, I am correct in guessing that LA28 is quietly struggling to do the same but, of course, NO ONE is saying it out loud.  

Bach’s Olympic agenda reforms will be put to the test in US (insidethegames.biz) 

With Toyota out, LA28 will need a big bus Sponsor to help them fill those 3,000 big buses they need to move everyone around in 2028.  

Edited October 1, 2024 by baron-pierreIV

[FYI]

On 9/30/2024 at 12:31 PM, Josh0108 said:

Salesforce randomly pulled out a few months ago, with nobody reporting on it.

 

On 9/30/2024 at 12:56 PM, baron-pierreIV said:

Right.  I thought that I had read something to that effect.  

I posted this back in late April in the general L.A. 2028 thread:

LA28 loses top-tier Salesforce sponsorship

https://www.sportspromedia.com/news/la28-salesforce-sponsorship-ends-olympics-paralympics-team-usa-nbc/

 

 

[JesseSaenz]

On 9/28/2024 at 9:36 AM, baron-pierreIV said:

Of course, the silence is defeaning but I think LA28 is in great financial trouble. 

#1 - On the TOP level, Toyota and Panasonic have dropped out from that IOC category.  Unless LA28 finds equally generous sponsors, they will have to buy those giant jumbotrons and buy/rent a few hundred vehicles for use during the Games.

#2 - Four years out, they only have Comcast-Xfinity, Delta and Salesforce as the only signed sponsors.  In 1980, when LA84 went into business, they had a dozen top-tier sponsors lined up.  Last week LA28's only new "sponsor" line-up was Cedars-Sinai who will be the Medical Provider for 2028.  No cash from that deal.  

I think the "no advertising in Olympic FOP settings will be a dead duck.  If I were amazon or apple -- why should I pay $75 million to be associated with an event wherein I cannot plaster my brand across the FOP?  I can get the same AND MORE by sponsoring on the World Cup or the Paralympics--and do right by my stockholders. 

And then, sponsoring 34 sports for '28?  Wasserman is biting off more than he can chew.  They will be tightening their budget and be doing major cuts in the coming years.  Of course, LA28 will not expose its vulnerability at this stage or at any time.  

Seems a little premature to sound the alarm on this TBH.

 

I'm certain the LA organizers will secure enough sponsors, even if they're not traditional Olympic sponsors.

[baron-pierreIV]

On 10/14/2024 at 1:37 PM, JesseSaenz said:

I'm certain the LA organizers will secure enough sponsors, even if they're not traditional Olympic sponsors.

How sure are you of that?  With the millions of dollars LA28, the USOPC and the IOC asking sponsors -- why would NON-traditional sponsors line up for an event wherein they and their products have no synergy?  Just as an example, off the top of my head, Boeing would be a great corporate sponsor.  But Boeing's customer base are the airlines and the US gov't for federal contracts.  (Also, they are currently experiencing great fiscal problems.)  In that state, why would a company like Boeing want to sign up for an Olympic sponsorship?  How would that affect its bottom line and serve its stockholders?)  

The whole corporate structure has changed.  That is why the USOPC and Salt Lake 2034 insisted on a 6-year gap between 2028 and 2034 because they know that the list of possible Olympic sponsors is dwindling and with the World Cup yapping at the Olympic heels, the #2 companies in each category (MasterCard, Pepsi, Hershey, etc.) are probably getting better returns from their investment with the World Cup than with the Olympics--which is just for prestige.  

Edited October 15, 2024 by baron-pierreIV

[baron-pierreIV]

2nd post:  you guys are being too kind to LA28.  

Here's the thing:  Olympic sponsorships at whatever level are sold for their maximum value for at least a quadrennium, i.e., at least one Winter Games and one Summer Games.  So, if LA28 is successful in lining up domestic sponsorships packages as its predecessor LA-1984 was, you have got the first tier of Sponsors signed on for the maximum $$ so they get to associate their name with at least ONE WOGs and one Summer.  But the fact that LA28 only has 2 or 3 at this time (and Salesforce being a dud), means LA28 is far behind on their sponsorship stream.  The later it gets, and no one signs up to sponsor Milano '26 and LA28, means any stragglers coming in for a sponsorship JUST for 2028 means it'll be a sponsorship MUCH less and would be good only leading up to LA28.  Therefore, a much smaller package. 

So LA28 will then have to rely on higher ticket sales and MORE broadcast rights to make up for what would be more lucrative sponsorship deals where they have the money in the bank now rather than at the back end when broadcast $$ and ticket sales streams enter LA28's ledger books.  

Edited October 16, 2024 by baron-pierreIV
x

[Bear]

5 hours ago, baron-pierreIV said:

So LA28 will have to rely on higher ticket sales and MORE broadcast rights to make up for easy corporate sponsorships deals.  

well with the inclusion of cricket to the sports programme i'm sure this won't be much of an issue 🙂

[baron-pierreIV]

1 hour ago, Bear said:

well with the inclusion of cricket to the sports programme i'm sure this won't be much of an issue 🙂

Yeah, but the high interest in cricket (i.e., big enough broadcast rights) would come mainly from India, Pakistan and the UK--not so the rest of the world.  And all that would come to LA28 coffers in probably late 2027 and 2028 -- not between now and 2026 when the org really needs to firm up their finances.  

[Bear]

Some updated figures regarding their finances:

"The Los Angeles host committee has a budget of $6.88 billion, with a domestic partnership goal of $2.5 billion yet to be met. That said, Wasserman stated on Friday that the group has already secured $4.7 billion in contractually obligated revenue, which came in before ticket sales began, although he did not specify how this was calculated. For reference, the Paris 2024 Games generated around $4.2 billion in total revenue."

no other info was given unfortunately, much of the article's focus was on cricket: https://www.footboom1.com/en/news/football/1956759-wasserman-suggests-la28-cricket-events-likely-to-be-held-on-the-east-coast

[baron-pierreIV]

7 hours ago, Bear said:

Some updated figures regarding their finances:

"The Los Angeles host committee has a budget of $6.88 billion, with a domestic partnership goal of $2.5 billion yet to be met. That said, Wasserman stated on Friday that the group has already secured $4.7 billion in contractually obligated revenue, which came in before ticket sales began, although he did not specify how this was calculated. For reference, the Paris 2024 Games generated around $4.2 billion in total revenue."

no other info was given unfortunately, much of the article's focus was on cricket: https://www.footboom1.com/en/news/football/1956759-wasserman-suggests-la28-cricket-events-likely-to-be-held-on-the-east-coast

So, does cricket have a female component?  Is that even taken seriously by India and Pakistan?  

[Sir Rols]

33 minutes ago, baron-pierreIV said:

So, does cricket have a female component?  Is that even taken seriously by India and Pakistan?  

Yep. The Women’s T20 World Cup is on now (South Africa V NZ in the final).

The next (main) ODI Women’s World Cup is in India next year. India’s won it a few times.

[baron-pierreIV]

But India seems to be a one-sport Olympic market.  All the other sports are split between the US, China and Oz  (and of course, Russia, whenever it will return to civilized circles).  I thought the venue on Long Island was a permanent one.  So it's really the TV contract for India that's the determining factor for keeping cricket in the Northeast.  Shrewd but goes against the Olympic spirit of having all the athletes mix.  So, unless India becomes credible in a few more of the major sports, I really don't see how holding and giving 2036 to them, would be a success.  I think it will be a terrible embarrassment for India as hosts.