At the start of this decade, the U.S. Olympic Committee faced a situation that might sound similar to today at first glance: A transition at the CEO position and several high-profile problems waiting in the inbox.
But in fact, the challenges facing Team USA today are far different for one key reason: Los Angeles 2028.
Because of the ’28 Summer Games, the USOC’s commercial operations will mostly be folded into the Los Angeles organizing committee, making it harder for the USOC to innovate, grow its revenue and fund the additional costs sure to be generated by governance and oversight reforms made in light of the Larry Nassar sex abuse scandal.
Meanwhile, the committee’s most pressing concerns today are political, not financial: repairing relationships with Congress, sports leaders, athletes and the general public, and selling the coming changes to those groups.
Under International Olympic Committee rules, all Olympic intellectual property in the U.S. is turned over to a joint venture of the USOC and LA28 that will sell sponsorships to both Team USA and the two-week festival 10 years away, starting in 2019. This is done to ensure the funding of the ’28 Games doesn’t come at the expense of the USOC’s long-term solvency.
The JV, registered as U.S. Olympic and Paralympic Properties LLC, will give the USOC a predetermined distribution of its income, with most of the proceeds going to the organizing committee. The other major source of commercial revenue, media rights, is locked in until 2032 due to NBC’s long-term deal.
“I don’t see that you’re going to have enormous growth in revenues, so the question will be how does that listed amount of money get allocated and spent?” said Dexter Paine, chairman of U.S. Ski & Snowboard. “I’m a firm believer that if you’re open and transparent, people may not agree with you but at least they understand why you make those decisions.”
Terms of the deal with LA28 have not been released, but acting USOC CEO Susanne Lyons acknowledged the JV “puts all of the sponsorship capability in terms of developing revenue” with Los Angeles.
If we need to continue to provide for winning the overall medal count, we need to get really serious about generating more revenue.
Max Cobb
Longtime CEO of U.S. Biathlon
“However, that doesn’t mean we can’t think about new revenue sources, and think creatively about our fundraising and development activities,” Lyons said. “You look at some of the things like sports betting that are just coming out that could be future sources of revenue.”
USOC officials have high hopes for the U.S. Olympic and Paralympic Foundation, a philanthropic arm that is now in its first full quadrennial pursuing donations. From 2013 to 2016, the foundation secured gifts of about $78 million, and its leaders think there’s still ample growth opportunity.
Lyons did not elaborate on how gambling, another potential new revenue stream, might fund the USOC.
Even if the coming years are likely to see slower growth, the committee can’t simply accept that as a fait accompli without hurting Team USA’s chances to win at the Games, said Max Cobb, longtime CEO of U.S. Biathlon and chair of the NGB Council. Team USA is reeling from a surprisingly weak showing at the Pyeongchang Olympics, winning 23 medals when its goal reportedly was 37.
“If we need to continue to provide for winning the overall medal count, we need to get really serious about generating more revenue,” Cobb said. “We benefit tremendously from the competitive advantage that Title IX created, but with every passing year that effect becomes less powerful. So, the fact that we are so totally outspent by countries like China, Russia, Great Britain, Germany in our high-performance programming is eventually going to catch up with us.”
