US gov­ern­ing body ‘to re­ceive fixed amount in deal with LA’

The Myanmar Times - - Sport -

THE US Olympic Com­mit­tee and Los An­ge­les 2028 Olympic or­gan­is­ers have agreed to a rev­enue-shar­ing deal in which the USOC will re­ceive a fixed amount over eight years in­stead of the 20 per­cent cut of gross rev­enues that had been agreed upon in the 2024 con­tract, a per­son fa­mil­iar with the ne­go­ti­a­tions told the As­so­ci­ated Press.

The joint mar­ket­ing agree­ment had to be reworked when Los An­ge­les agreed to host the 2028 Games, with Paris stag­ing the 2024 Olympics. The In­ter­na­tional Olympic Com­mit­tee was sched­uled to of­fi­cially name the host cities late last night.

The AP learned specifics of the agree­ment from a per­son fa­mil­iar with the ne­go­ti­a­tions who did not want to be iden­ti­fied be­cause the de­tails have not been made pub­lic. The IOC has not of­fi­cially ap­proved the new deal but in its re­port on the 2028 bid, it said it had “no ma­jor con­cerns” with the agree­ment.

The joint mar­ket­ing agree­ment fig­ures heav­ily into the USOC’s abil­ity to fund its ath­letes, and sort­ing out the deal was one of the big­gest hur­dles to clear head­ing into this week.

When a city is awarded the Olympics, it had also tra­di­tion­ally taken over its coun­try’s do­mes­tic spon­sor­ship program for a six-year pe­riod lead­ing into those Games. This reworked deal will last eight years, from 2021-2028. The idea is to pre­vent the coun­try’s Olympic com­mit­tee and the host city from sell­ing com­pet­ing spon­sor­ships for es­sen­tially the same prod­uct.

The spon­sor­ship deals of­ten reach into the tens of mil­lions of dol­lars in the United States, mak­ing the ne­go­ti­a­tions com­plex. But early in the process of the 2024 bid, LA and the USOC locked in their deal. It was a six-year agree­ment in which the USOC was to re­ceive 20 per­cent of the rev­enue — worth some­where around $380 mil­lion — from the do­mes­tic deals that LA ex­pects to ne­go­ti­ate.

The new num­ber has not been re­vealed, though the per­son fa­mil­iar with the ne­go­ti­a­tions said it would add up to more than un­der the pre­vi­ous terms.

Hav­ing a fixed num­ber al­lows the USOC to plan more ef­fec­tively than un­der a per­cent­age deal that could be more volatile with an 11-year wait un­til the Olympics, in­stead of the usual seven. Un­der this deal, the USOC will also re­ceive money right away in­stead of hav­ing to wait and se­cure a line of credit un­til the pay­ments be­gin, as was the case un­der the old deal. This deal also has a pro­vi­sion for in­creased pay­ments to the IOC if rev­enue pro­jec­tions ex­ceed cer­tain thresh­olds.

At stake is in the neigh­bour­hood of $60 mil­lion a year, which to­tals up to about one-third of the USOC’s typ­i­cal bud­get over a four-year cy­cle. The USOC puts $75 mil­lion or more each year into di­rect sup­port to ath­letes and the gov­ern­ing bod­ies that run the sports. The USOC is in a unique po­si­tion be­cause it does not re­ceive gov­ern­ment fund­ing to sup­port the ath­letes, and thus, doesn’t have an ob­vi­ous way to make up any short­fall.

– AP

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