LA28 Eyes $2.5 Billion Sponsorship Goal Despite Slow Start
In almost exactly five years, someone will light the cauldron signaling the start of the 2028 Summer Olympics in Los Angeles, the Games’ first visit to the U.S. since 2002. That’s assuming enough sponsors have stepped up to pay for them.
LA28 organizers, Team USA and Comcast continue to move toward the Games’ domestic corporate sponsorship goal of $2.5 billion, but they got off to a slow start and haven’t exactly gained critical speed.
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The LA28 organizing committee, which was awarded the games in 2017, is slightly behind compared to previous Olympics Games in terms of sponsor count, adding just a handful of sponsors—Oakley and Eli Lilly the most recent—in the last two years.
LA28 chief operating officer Chris Pepe attributed the lag to the bid window and the complexities of a joint partnership program between the United States Olympic and Paralympic Committee and LA28, which aims to drive more revenue by selling bulk partnerships over four Olympics. The program started with last year’s Beijing Winter Games, which means companies signing on after that time will only be onboard for Paris (’24), Milan (’26) and LA.
To make the program possible, the USOPC allowed roughly 20 major sponsorship deals to expire after the Tokyo Olympics. Since then, the LA28 organizing committee has set out to execute this new strategic approach, doing so in conjunction with media partner NBC Universal.
So far, LA28 has secured 35% of its overall domestic sponsorship revenue goal, according to Pepe. The former Visa executive nonetheless hopes to exceed the $2.5 billion target. “It’s big and audacious but that’s what we’re about,” Pepe said when asked about the sponsorship goal in an interview. “We feel really good about where we are today.”
The Slow Start
LA was awarded the 2028 Summer Games six years ago, giving it an 11-year runway when organizing committees are typically given seven. But it’s difficult to hold it accountable for the first four years given the limitations in the marketplace and lack of opportunity to sell deals. The IOC also releases sponsorship packages to local organizing committees, meaning the committee doesn’t have complete control over when it can go to market. In some regards, LA28 is just a couple years into an active campaign under this partnership program, which differs from the traditional construct.
On top of the new program structure, which didn’t call for bid sponsor conversion, the organizers have faced a handful of external headwinds: the lingering effects of the COVID-19 pandemic, the Ukraine war, the global banking crisis and recessionary fears. In retrospect, the LA28 committee is lucky that it didn’t get the 2024 Games it originally pursued, since it now has more time to shake off the ills of the geopolitical, health and economic chaos.
“The next 12-18 months will be important,” former IOC marketing head Michael Payne said in an interview. “It’s perhaps understandable if it’s slow to regain momentum after the (last) two Olympic games were disrupted by Covid in a complete lockdown but were ultimately very successful.”
The committee landed a few deals before Beijing, including a $400 million founding partnership agreement with Delta, as well as other top-tier deals with Comcast and Salesforce, which were extensions of previous deals with the USOPC.
Comcast’s NBC, which has aired the Olympic Summer Games since 1988, inked a $7.7 billion deal with the IOC in 2014 to air the games through 2032. Comcast, a Team USA sponsor since 2017, extended its relationship back in 2021 with a separate founding partner deal. LA28 declined to comment on how much Comcast Corp. is contributing overall and to what extent it was backstopping the $2.5 billion goal.
The Tokyo 2020 Games generated a record $3 billion in domestic sponsorship revenue, so experts say LA28’s $2.5 billion goal isn’t unreasonable for the first U.S.-based Summer Olympic Games since Atlanta in 1996.
Moving forward, “it’s less of a hurdle and more of a pivot,” Pepe said. “There are companies that really struggled during the pandemic and others that did very well. … It’s more about how do you lean into what’s happening in the marketplace and help companies that are looking for a true, authentic association and thinking long-term.”
What’s Next?
These long-term partnerships between LA28 and interested brands can often take months, even years, to finalize. It’s unclear if current prospects will pay reduced fees compared to founding partners who committed in early 2021 and were therefore able to activate with Team USA before Beijing. Such decisions will fall to LA28 chairman Casey Wasserman.
“[Casey] is very proud of that bid and I can see him holding on to his pricing because he has something of value,” said Rob Prazmark, whose Connecticut-based agency, 21 Marketing, has brokered Olympic sponsor deals for organizing committees since 1985. “You have to understand his personality and mindset.”
While LA28 has hit roughly 70% of its revenue goal among consumer products brands, the domestic organizers still need to secure sponsors among other top categories, including banking, medical services, technology, quick service restaurants, beer and energy. Pepe hopes to have most of those categories filled before next year’s Paris Games or shortly thereafter. The IOC, which gives LA28 and other committees a share of its deals, already has commitments from Allianz, Visa and Coca-Cola.
LA28 is not only working in a heavily saturated U.S. sports market but it’s also fishing for major sponsorships in a peculiar post COVID-19 time where major companies are reevaluating their marketing strategies and budgets. And the job tenure for chief marketing officers at top advertisers also has shortened, lasting about three years on average, according to consulting firm Spencer Stuart—meaning they may not be around to see a deal of this caliber through.
Making that investment, which includes millions in additional money beyond the rights fees to activate, is a huge spend. But for some companies, it’s worth every penny.
“Selling an Olympic sponsorship is quite different than any traditional sports agreement,” former IOC marketing exec Terrence Burns, who helped LA land the Games, said in an interview. “Yeah, the event lasts for 17 days, but you have the opportunity to promote that for years in advance of the Games.”
The Next Generation
There’s also a changing consumer perception among Gen Z. It is the least patriotic generation in the country, according to Morning Consult, with just 16% of 18-25-years-old surveyed saying were proud to live in the U.S. “The Olympics have been and continue to struggle with the younger demographic in terms of relevance and attractiveness as a product,” Burns added.
In response, the IOC has made a push to attract younger audiences by adding skateboarding and other sports in recent years. Breakdancing will make its debut in the Summer Games next year. Gen Z prefers brands that impact the world, and marrying the celebration of humanity with altruism might be the secret sauce. Beyond that, LA28 hopes that the progressive hipness and aura of California life will attract young consumers.
“There’s a local, national and an incredibly global aspect to the Games,” USOPC chief strategy and growth officer Katie Bynum said in an interview. “When you look at the brands that are coming on board, there’s a value proposition at all three of those levels.”
Such possibilities are what fuel Pepe’s drive. “Coming out of what was an interesting marketplace for the last three years, there’s such a great appetite for these large-scale and meaningful events,” he said. “With Paris about a year around the corner from us, there’s this renewed optimism and interest in aligning with the movement. That gives us great energy going into 2028.”
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