LIMA, Peru (AP) — The U.S. Olympic Committee and Los Angeles 2028 Olympic organizers 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 will officially name the host cities Wednesday.
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 be 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 neighborhood 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.