As lights go out on Milano Cortina, IOC bets on LA28 to reboot Olympic business model

By Karolos Grohmann

MILAN, Feb 20 (Reuters) – As the lights go out on the Winter Games this weekend, the Olympic movement is already pivoting towards Los Angeles 2028 — a privately financed showpiece the IOC is betting will reboot a commercial model that has underwritten the Games for four decades but is now straining in a more sophisticated marketing climate.

Milano Cortina will be the last Olympics with a 41-year-old sponsorship playbook that many in the International Olympic Committee accept desperately needs a refresh, despite contributing billions to the movement’s coffers. 

“Few companies can invest hundreds of millions of dollars and consider it worthwhile just to be able to say ‘my company supports the Olympics’ and use the Olympic Five Rings logo,” IOC member Morinari Watanabe told Reuters on the sidelines of the 2026 Games.

“We need to calmly analyse what our customers, or sponsors, want from the Olympics and conduct strategic marketing activities based on that,” added the Japanese businessman who is also the president of World Gymnastics. 

“Marketing is about getting people who aren’t interested in sports interested in them. This will increase the value of the Olympics and ultimately increase marketing revenue.”

The IOC is eyeing the Los Angeles Olympics as the first with a new marketing structure in play that they hope will secure its financial future in the same way the transformational 1984 Games in the same city did. 

NEW OPPORTUNITIES

The Olympic body is already looking to expand the marketing opportunities for its commercial partners, opening up spaces in the Games that for decades were off limits to them.

The athletes’ preparation area, the scoreboard and naming rights for future venues are all areas where the IOC believes it can offer sponsors visibility as they look to weave partners more “organically” into the Games.

LA28 aims to raise $2.5 billion from its own domestic sponsorship programme and already has big California tech names like Google and Uber among its partners. 

Exactly how the LA28 partners are allowed to leverage their sponsorship will be of huge interest to the IOC and others involved in sports marketing.    

“Just as LA84 transformed the model for the Olympic Games, the upcoming LA28 Games will do the same,” Brian McCullough, Associate Professor of Sport Management at the University of Michigan, told Reuters.

“LA28 will not only bring together the best athletes, but also showcase the best sport business has to offer through its event operations, fan experience, and sponsor activations surrounding the Games. 

“This model will serve as a strong foundation for the IOC to build on.”

The Olympic Partners (TOP) sponsorship programme has served the IOC extremely well since being introduced on the back of the 1984 Los Angeles Games.

The Games looked in serious trouble until chief organiser Peter Ueberroth launched a marketing programme which, twinned with low operational costs, turned them from a project on the brink of financial doom to a blueprint for a commercially successful Olympics.

LA84 had several dozen commercial sponsors providing services or cash, TV rights deals brought in record-breaking revenues and the Games ended up with a post-event surplus of nearly $250 million, the equivalent of some $780 million today. 

LA BLUEPRINT

The IOC was still reeling from the financially disastrous 1976 Montreal Olympics which left debts that took the city almost 30 years to pay off and scared off potential bidders to host future Games. 

They seized on Ueberroth’s model of product category exclusivity and started to tap into the vast commercial opportunities offered by multinationals looking to associate themselves with the Olympic rings by launching the TOP Programme in 1985.

“Coming out of LA (in 1984) you entered the golden age of bidding (for the Olympics) and buried the ghosts of Montreal,” said former IOC marketing chief Michael Payne, the author of “Fast Tracks and Dark Deals”, a look at the business of the Olympics.

From the $96 million in revenues in the 1985-1988 quadrennial, the TOP programme hit $3.04 billion for 2021-24. It is the IOC’s second biggest source of income after the broadcasting rights revenues which brought in $4.706 billion over the same period.

Signs that the TOP programme was starting to wobble, however, came when Japanese corporate heavyweights — Toyota, Bridgestone and Panasonic — pulled out after the 2024 Paris Olympics.

In 2025, the IOC did sign up Chinese company TCL to replace Panasonic — an Olympic sponsor for 37 years — in the audiovisual equipment and home appliances category.

Financial statements approved at the IOC session in Milan, though, show the TOP programme brought in $560 million for 2025, the lowest annual revenue since the organisation reported $532 million in 2020 after the Tokyo Olympics were postponed because of COVID.

GAMES CATALYST

There has been more bad news for the IOC on the financial front in recent months with a 12-year deal with Saudi Arabia to stage the Olympic Esports Games collapsing after 14 months.

“The marketing world is now changing rapidly and the TOP programme has to evolve in how it engages with the business community, and it is not about sticking logos on the side of the pitch,” Payne said. 

“LA may be a catalyst on developing the in-venue fan experience. It will be showcased fully in LA.” 

IOC President Kirsty Coventry launched a wide-ranging review of all elements of the Games after being elected to the post last year, including the bidding process, the sports programme and, most crucially, its marketing operations.

The results of that review will be discussed in the IOC session in June.

“There needs to be an evolution where the packages the IOC offers become more flexible,” Leah Gillooly, Associate Professor of Marketing at Manchester Metropolitan University, told Reuters. 

“LA28 would be a good opportunity for the IOC because of the unique setup.

“It provides a test for opportunities to test innovative (marketing) aspects. You will not get resistance in the U.S. market.”

(Reporting by Karolos Grohmann; Editing by Ossian Shine and Nick Mulvenney)