LANE ONE: LA28 Steps Up Referral Pace, As 2019 Financial Results Show Spending Slowing


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/Update/ As the Olympic world has focused on the drama in and around the upcoming Tokyo Games and the political implications of next February’s Winter Games in Beijing, there is promising marketing activity – as well as a welcome lack other activities – around the 2028 Olympic Games. Games to be held in Los Angeles.

After announcing its first major sponsor – Delta Airlines – in March 2020, the US Olympic & Paralympic Properties (USOPP) group which combines the sales efforts of the LA28 organizing committee, the US Olympic & Paralympic Committee and the US broadcaster NBC are remained silent during the pandemic.

So far. The Combined Marketing Entity has announced three major sponsorship deals in the past 90 days:

March 15: Comcast joins as a founding partner for communications services.

May 19: Deloitte joined as a founding partner for professional services.

June 16: Selling power joined as a founding partner for its customer relationship management software systems “to deliver an engaging digital experience for fans and athletes. “

The Comcast and Deloitte agreements were extensions of existing sponsorship agreements with the USOPC, but Salesforce’s announcement is very significant as it brings a major new player in commercial technology into the US Olympic Movement.

Salesforce’s revenue exploded to $ 17.1 billion in fiscal 2020 and it announced expected revenue of $ 25.5 billion for fiscal 2022. It has already been a key part of a mega-event in Los Angeles as it was used for the registration and processing of volunteers for the special 2015 World Olympics Games, handling the 29,616 volunteer applications and support missions for any 8,560 volunteers who worked on this games.

The emphasis it announced on “fan and athlete” experiences could signal a significant shift for the company towards direct-to-consumer programs in addition to its famous business-to-business applications.

These deals are welcome signs of progress for LA28, which has a national sponsorship target of $ 2.517 billion in its budget of $ 6.884 billion (36.6%). Tokyo 2020 set all-time records with a more than $ 3.3 billion national sponsorship program in cash, goods and services from 67 companies (15 Gold Partners, 32 Official Partners and 20 Official Supporters). Paris 2024, however, has a much lower target of 1.3 billion euros (~ US $ 1.55 billion) for its Games, about half of which has been lifted so far.

At the same time, LA28 was quite slow to hire and spend in 2019, as the city of Los Angeles released the “2021 Annual Report of the Los Angeles Organizing Committee for the 2028 Olympic and Paralympic Games»On June 10.

LA28 does not publish its financial statements or Form 990 tax returns on its website, as the USOPC does, but does publish them through the City of Los Angeles in an “annual report” in the middle of it. ‘year. The June 10, 2021 file includes a review by the City’s Chief Executive Officer and Chief Legislative Analyst, as well as the financial statements and income tax return for 2019 (2020 has been reported as ongoing).

The opinion of City staff is positive:

“LA28 indicates that business operations have been adjusted due to COVID-19 and moved to a fully remote workforce. Activities focused on ensuring a solid financial foundation to minimize the risks caused by the short-term business disruptions created by COVID-19. Operating reserves remain healthy due to a combination of quarterly payments from the International Olympic Committee (IOC) ($ 9,000,000) as well as a substantial reduction or deferral of planned contractual, administrative and travel expenses. .

The report also noted that LA28’s commitment to supporting youth sports has not been derailed by the pandemic:

“While [youth sports] programming has been suspended due to COVID-19, LA28 has continued to support youth sport through partnerships with various local entities, such as the LA84 Foundation’s Play Equity Fund, the school district’s Beyond the Bell program Unified of Los Angeles and Students Run LA. With support from Nike, LA28 donated approximately $ 600,000 in sports equipment to children in Los Angeles. LA28 also donated outdoor safety equipment to facilitate safe outdoor play activities at [Recreation & Parks] facilities converted into outdoor day care centers. LA28’s additional support and contributions for youth sport are provided outside of the [Youth Sports Partnership] Agreement and have no impact on funding available for future project plans.

There is no doubt that Nike will become a founding partner of LA28 at some point.

The financial statements don’t reveal much as LA28 did not do much in 2019. He received $ 36 million from the International Olympic Committee under contract and $ 1.39 million in interest and contract income from its long-term sales partnership with Legends.

LA28 spent $ 12.9 million on staff in 2019 compared to $ 7.2 million in 2018, adding to both its own team and the USOPP effort:

LA28 staff: $ 8.09 M in 2019 vs. $ 5.31 M in 2018 (+ 52.3%)

USOPP staff: $ 4.83 M in 2019 vs $ 1.92 M in 2018 (+ 152%)

The number of employees shown on the LA28 990 tax return form was 34 in 2019 compared to 28 in 2018; this does not include USOPP staff. The organization had $ 36.7 million in cash at the end of 2019.

With the 2020 pandemic, the situation with LA28 was likely more of the same, although Linkedin observers noted a pickup in hiring in some areas. USOPP was busy hiring more people to come up with more ideas for partnership programs.

The IOC Executive Board did not even receive a report on LA28 at last week’s meeting, and the focus continues to be on the sponsorship program. Fortunately, recent news on this front is good.

Rich Perelman

(Text has been updated to reflect the declaration of a pandemic in 2020, not 2019. Thanks to the reader Dr Bill Mallon for noting it.)

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