● From our sister site, TheSportsExaminer.com ●
“LA28 is well on track to deliver an amazing Olympic and Paralympic Games in Los
Angeles in 2028.”
That’s the primary message from Kathy Carter, the chief executive of the Los Angeles 2028 Olympic & Paralympic Organizing Committee in its annual submittal to the Los Angeles City Council.
Posted late last week, the 135-page package includes a short overview of LA28’s operations in 2020 and 2021 and financial statements through 31 December 2020. Of its current status:
“LA28 completed an integrated strategic plan and annual operating plan for 2022 continuing to focus on: [l] evolving our organizational strategy and expanding business operations; [2] advancing Games delivery plans and models; [3] growing LA28 brand awareness and collaborating with Team USA; [4] advancing development of a legacy plan and social impact strategy; and [5] continuing to solidify our commercial future.”
Achievements in 2021 include an expansion of the LA28 branding and sponsorship sales program, but the three key items included:
● “[A] substantial reduction or deferral of planned contractual, administrative and travel spend, among other near-term savings.”
● “In 2021, LA28 successfully completed key commercial agreements, announcing partnerships with Salesforce, Comcast and Deloitte.”
● “In addition, LA28 [along with the organizing committees for Paris 2024 and Milan-Cortina 2026 and the IOC] entered into an innovative agreement with On Location – transforming the global hospitality model and guaranteeing significant revenue to LA28.”
That last item – “guaranteeing significant revenue to LA28″ – is going to be important soon, as the $180 million in payments from the International Olympic Committee, at $9 million per quarter since the start of 2018, will come to an end at the close of 2022.
The financial statements showed yet another sizable loss for the year, as expected in a time when revenues are not coming in, except from the IOC:
● 2018: net loss of $16.081 million
● 2019: net loss of $22.024 million
● 2020: net loss of $33.865 million
Some $8.344 million (23%) of the 2020 total costs of $36.493 million were attributable to the U.S. Olympic & Paralympic Properties (USOPP), a wholly-owned subsidiary organization that is a combined effort of LA28 and the U.S. Olympic & Paralympic Committee for sponsorship sales and other marketing ventures.
The 2017-20 cumulative net deficit was shown as $74.422 million, including some losses from a partial year of operations in 2017. But more money is coming; in total, the IOC is expected to pay $1.535 billion in cash to LA28 from television rights sales and a share of the TOP sponsorship program. The projected budget of $6.882 billion for the entire project did not change.
Thanks to the IOC’s payments, the LA28 cash balance at the end of 2020 was a very healthy $59.024 million.
However, the agreement between LA28 and the USOPC, however, requires that significant payments were due in 2021 and through to 2028. In 2021, the USOPC was to receive cash and/or value-in-kind of $46.076 million, then $58.0 million in 2022-23-24, and $64.0 million in 2025-26-27-28 for a total of $476,075,684. Wow!
The LA28 organization was still small at the end of 2020, with 48 staff and 28 volunteers, but growing significantly since 2018 (28 staff, no volunteers) and 2019, with 34 staff and no volunteers. There are roughly another 40-50 staff involved today with the Los Angeles 2028 effort on the sales side, coordinated by USOPP (also overseen by Carter).
LA28 made a lengthy series of commitments to the City of Los Angeles in the Games Agreement that was approved at the end of 2021. Last Thursday, the City Administrative Officer and Chief Legislative Analyst posted the initial benchmarks and working priorities of 10 oversight groups designed to create a positive Games experience across the City, including:
● Community Business Procurement Working Group
● Local Hire Working Group
● Sustainability Working Group
● Arts and Culture Plan
● Human Rights Strategy
● Legacy Entity
● 2028 Games Mobility Executives
● Public Safety Cooperative
● Games Energy Council
● Airport Operations Plan
Work with most of these groups is expected to start in 2022.
LA28 is also continuing to fund its Youth Sports Agreement with the City’s Recreation and Parks Department, committing $160 million of the $180 million to be received early from the IOC to sports programs in Los Angeles. The funding commitment is already scheduled for delivery into 2028, and as of 31 December 2020, LA28 had funded $4,481,705 against the $160 million commitment ($2,480,992 in calendar year 2020).
The City’s Recreation and Parks Department filed a 182-page plan last Thursday to ask for authorization to access $17,533,441 for use in 2022-23. Most of the money is for programs and classes at 123 sites for recreational league and special programs in rowing, teqball and golf, with smaller amounts for the continuing SwimLA program, surfing ($402,492), running and track & field, judo, tennis, golf, skateboarding, equestrian, taekwondo, adaptive sports, marketing efforts for all of the sports and $500,000 to the U.S. Center for SafeSport for “training and tools to ensure the safety of all youth participants in RAP sports and fitness programs.”
The plan states that the “baseline” 2018-19 program year served 61,925 youth at recreation centers and another 31,013 in aquatic programs, or 92,938 in total. The target for the 2022-23 program year is 77,470 at rec centers and 38,101 in aquatics, or 115,571 in total, which would be an overall increase of 24.3%.
The Youth Sports Agreement allocates $19.2 million for the 2022-23 period, more than the requested amount.
LA28’s $160 million commitment may be increased, as an amendment to the contract allows the City to propose additional funding – transportation support has been identified as a non-covered need – during the remaining term of the agreement.
All of these items will be considered by the City Council’s Ad Hoc Committee on the 2028 Games on Monday, with action items submitted to the Council if needed.
When Los Angeles was awarded the 2028 Games in 2017, it seemed like a long time away. With just more than six years left, it’s getting a lot closer and the financial responsibilities – especially to the USOPC – are getting a lot bigger.
~ Rich Perelman
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