- Baumann describes both candidatures as ‘mind-blowing’
- Dual award offers unprecedented opportunity to maximise sponsorship and TV revenues
- Macron election win could provide Paris bid with fresh momentum
As the bidding process for the Olympics turns into the final straight, the destination of the Games in 2028, as well as 2024, is firmly on the agenda of an International Olympic Committee that wants to bring a turbulent race to a successful conclusion.
What this means for the two remaining bidders, Los Angeles and Paris, remains to be seen. However, following a process that has endured untimely withdrawals by Budapest and Rome and brought IOC president Thomas Bach’s much-trumpeted Agenda 2020 firmly under the spotlight, it is clear that Olympic bidding and hosting is at a crossroads.
In July the IOC’s membership is expected to approve recommendations to award both the 2024 and 2028 Olympics in September, locking in Los Angeles and Paris – two of the strongest bids in the event’s history – for the next two Games.
After saying the Olympic candidature procedure “produces too many losers,” Bach can ill-afford to drop either if he wants to strengthen the reputation of the Olympics.
For now, LA and Paris are playing the waiting game, hoping that IOC inspectors, who scrutinised each city on the ground in May, found little fault with their proposals. In his wrap-up press conferences to the IOC visits there was nothing in evaluation commission chair Patrick Baumann’s remarks to suggest otherwise.
The secretary general of Fiba, basketball’s global governing body, and president of the Global Association of International Sports Federations variously described them as exceptional candidatures with “mind-blowing” concepts.
The key differences are that Paris must build a $2bn (€1.8bn) Olympic Village, which comes with risks of cost overruns. Paris has told the IOC it can only guarantee land to construct it for the 2024 Games – about 75 per cent of it privately financed. LA 2024 has no permanent constructions to build, in theory reducing the risk for the IOC. The University of California Los Angeles is the planned site of its Olympic Village. LA is pitching a privately-funded Games that doesn’t require any taxpayer funding.
Concluding the IOC’s Paris check-up, Baumann shrugged off suggestions that the big spend and lack of guarantees about the village were major shortcomings.
He was in the mood for sprinkling superlatives, saying the IOC commission had felt the “passion and enthusiasm” for the 2024 Olympics during their stay. In LA he was similarly effusive, labelling the city’s Olympic plans “impressive” and “incredible.”
Image: The IOC delegation visits Paris (Getty Images)
Refusing to flag up any flaws or weaknesses in comparing the cities, he said both candidates “do not present major risks that we have been able to highlight.”
As for the 2024/28 dilemma, Baumann noted that his team’s mandate was only to focus on delivering a report on the bidders. He claimed the IOC was in an “extraordinary” position with two excellent cities, effectively saying the destiny of the Games was in the hands of the IOC’s four-member taskforce.
He rubbished the suggestion that his commission’s work and final report may end up being a pointless exercise if the Olympics are split between LA and Paris anyway. Describing it as the culmination of 18 months’ work, he said the report’s conclusions were crucial. “To put it down in black and white is extremely important for them [the bids] and stakeholders behind them who have given their support,” he said. “It’s one piece in the decision-making process.”
A dual Olympics award puts the IOC in unprecedented territory. It might never have another opportunity like it to maximise revenues from sponsorship and media rights for both Games, while protecting and nourishing the Olympic brand and securing future hosts.
However, Olympic Games executive director Christophe Dubi tells SportBusiness International: “We will not discuss about an opportunity like this one based on commercial questions. That is not in the deliberations.”
Might officials sitting around the IOC’s top table in July consider the commercial merits though? “I cannot pre-empt the discussions of the executive board, but as far as we have discussed so far, including with the vice-presidents in this working group, these are not the considerations that will drive the decision,” Dubi insists.
On the sponsorship and TV rights revenues front, there are arguments for and against handing Paris and LA the 2024 Games.
For Rio 2016, the IOC boasted 11 global Olympic partners (TOP sponsors), including long-time allies Coca-Cola and McDonald’s. Toyota and Alibaba joined this year. The Japanese car firm inked a deal through to 2024, while the Chinese company is aiming to exploit Beijing’s hosting of the 2022 winter Games and has committed through 2028.
It’s a tough time for six of the 13 TOP sponsors based in the US who have still to renew beyond 2020. With three Asian Olympics coming up – Pyeongchang 2018, Tokyo 2020 and Beijing 2022 – presenting challenging time zones for western audiences, a 2024 award to LA may strengthen the IOC’s negotiating powers as other US companies clamour to join the sponsorship programme.
Former IOC marketing director Michael Payne, an LA 2024 consultant, says the US staging a summer Games for the first time since Atlanta 1996 would be vital “to re-engage the Olympic Movement in the largest single commercial market.”
With Rio 2016’s venue legacy in tatters and Tokyo 2020’s ballooning costs, there is a feeling that the Games could benefit from a safe pair of hands.
Payne draws parallels with the 1984 Games, which breathed new life into the Olympics, saying LA’s “no-risk” offering and “a very successful presentation” could “reboot confidence in future hosting.”
“No question that a Games in the US will bring new [IOC] partners into play on a global basis more than a Games in France,” he says.
With NBC’s media-rights contract with the IOC running through to 2032 following a $7.75 billion contract extension in 2014, Payne says that a 2024 Games in LA consolidates the broadcaster’s “confidence and return on the Olympics.”
Rob Prazmark, president of US-based 21 Sports & Entertainment Marketing Group, says that while the IOC does not necessarily need an LA Games to attract a more lucrative bid from a US broadcaster in the next rights cycle, “we should never underestimate the power of NBC and the loyalty that the IOC has to them.” He adds: “I believe that NBC would rather have the Games sooner versus later in America.”
LA 2024 chief executive Gene Sykes talks of many commercial upsides to the Games heading next to California. “LA 2024 is an opportunity to place Olympic and Paralympic sports centre-stage of the United States’ $250bn sports market during the Games and throughout the seven-year build-up,” he tells SportBusiness International.
“LA 2024 will create a legacy of increased sports participation among 100 million young Americans and an economic impact for international federations that will be felt around the world. The scale of that opportunity simply cannot be replicated anywhere else.”
He adds: “When cities consider bids for the 2032 Games, starting in 2023, we hope LA 2024’s fiscal responsibility, revenues and public support will encourage more cities to bid. It is in the best interests of the Olympic Movement to come to LA and unlock this commercial opportunity as soon as possible. Why wait until 2028?”
Tim Crow, chief executive of Synergy, a company advising Olympic sponsors, believes Paris may get the nod for 2024, with LA’s hosting of 2028 helpful for the IOC in negotiating a lucrative new US broadcast deal beyond 2032. “It means the IOC can go to market again in the mid-2020s, or before, for a US TV agreement with LA on the horizon and all the excitement that will be created,” he says.
Such a scenario would also bolster the IOC’s powers of persuasion in striking fresh deals of at least eight years with the six US-based TOP sponsors, he adds.
With LA tapping into the vibrant commercial market in America to bring a raft of potential TOP sponsors to the IOC’s attention, some observers claim the IOC will struggle to convert Paris 2024’s domestic backers into worldwide partners.
Crow argues that it’s difficult to predict, pointing to recent history to suggest that the IOC would have grounds to expect interest from French partners. Japan’s Bridgestone and Toyota joined the IOC’s top-tier sponsorship programme, for instance, after Tokyo won the 2020 Olympics.
Etienne Thobois, chief executive of Paris 2024, agrees. He suggests that the bid has demonstrated the strength and depth of its sponsorship programme to Baumann’s evaluation team. Nearly 20 world-leading companies in their own field represent “interesting prospects for the IOC,” he says.
“We have excitement and a wave coming through our own sponsorship programme,” he says. “We needed to show that our budget was sound and safe, and the revenue part is an important one. And we did that very well.”
Both Payne and Crow laugh off the suggestion that football’s Fifa 2026 World Cup, likely to be staged in the US along with perhaps Canada and Mexico, might diminish the appetite for sponsorship for LA 2028. They say that the sports sponsorship market in North America is more than big enough to support both mega-events.
Crow sees nothing but positives when he says: “There will be huge demand for Olympic and World Cup sponsorship in the US if it’s 2026 and 2028, no question.”
Prazmark says that an LA 2028 Games “would deliver incremental value to sponsors in the US – a huge carrot for the USOC [US Olympic Committee] to sell going forward. A 10-year run-up would give a marketer a long-term Olympic platform and companies would pay incrementally for that.
“If the USOC and LA 2024 indeed do decide on accepting a 2028 award, they should do so on redefined terms, because they would be taking one for the team.”
Image: French President Emmanuel Macron has galvanised the Paris bid since coming to power (Getty Images)
One Olympic bid consultant suggests the next Olympic TV deal for Europe would be boosted by a Paris 2024 win. “Europe with or without Brexit is the biggest market in the world [for the Olympics] from a live TV point of view,” he says, adding that there is vast potential to increase sponsorship and TV revenues.
Discovery’s Eurosport will be desperately hoping Paris gets 2024 – not just for time zone reasons. Since sealing the $1.4bn pan-European Olympic TV rights deal with the IOC in 2015, through the 2024 Olympics, the company has struck a series of sublicensing deals. Paris 2024 would be the broadcaster’s crowning glory, strengthening its profile for rights negotiations for subsequent Games.
Inevitably, Eurosport chief executive Peter Hutton is giving nothing away. “Our business rationale and commercial objectives have never been dependent on the location of any one of the four Games, and remain ahead of target,” he says.
“As you would expect, we are following the ongoing bid process closely and have full faith in the IOC to select the best city for the Olympic Games in 2024 and for 2028, if they decide to do so at this stage.”
Whatever transpires in the race to Lima, Bach would do well to scrap his ‘losers’ language – the bidding contest is delicately balanced, but it’s a win-win for the IOC.
EXTRA: IOC decides the prizes
While the IOC’s 2024 Evaluation Commission convened at the end of May to finalise its report following inspections of LA and Paris, a taskforce comprising the four IOC vice-presidents has been studying the options for an unparalleled change to the Olympic bid procedure.
Talks with LA and Paris bid chiefs are taking place about a dual award of 2024/28 in September, with a recommendation going before an extraordinary meeting of the IOC’s top brass in June. The Evaluation Commission’s team has not factored the 2024/28 conundrum into its final report, which is sent out to all IOC members and made public on July 5. Both cities have repeatedly said they only want the 2024 Games.
The IOC executive board meets again in Lausanne on the eve of the July 11-12 candidate cities briefing.
The summit is a critical juncture in the contest, with LA and Paris pitching the IOC members on the first day, and explaining their detailed concepts in a workshop on the second. Games have been won and lost at these briefings before; Rio’s ‘zero Olympics in South America’ pitch to the IOC electorate in 2009 is a case in point.
The presence in Lausanne of new French President Emmanuel Macron, who committed to supporting Paris 2024 days after being sworn into office, coupled with the likely absence of US President Donald Trump could give the French some serious momentum.
The IOC may yet strike a deal with the cities in June or July, but the IOC Session in Lima, Peru – slated for the host city vote – remains the winning post for the time being.