07/28 16:15 CDT Marketing agreement an obstacle in US bid for 2024
Marketing agreement an obstacle in US bid for 2024
AP National Writer
COLORADO SPRINGS, Colo. (AP) --- If Boston, Los Angeles, San Francisco or
Washington is picked to host the 2024 Olympics, the U.S. Olympic Committee will
pay the price for winning. One of its first tasks will be to hand over millions
in sponsorships to the victorious city's newly formed organizing committee.
It's one of those costly facts of life in the Olympics thanks to the Joint
Marketing Program Agreement that a country's Olympic federation must sign when
it puts a city up as a candidate to host the Games. It also played into the
failures of New York and Chicago in the last two U.S. attempts to land the
The last two American bids have included agreements that didn't conform with
the International Olympic Committee's guidelines, which call for around 90
percent of the host federation's domestic sponsorship to be channeled to the
new organizing committee. The USOC, not backed by any government funding, has
balked at the terms because it would have trouble making up for the millions it
It would likely seek a different arrangement for a 2024 bid, as well.
"A lot of countries might say it's not an issue," said Jim Scherr, the CEO of
the USOC when New York finished fourth in the 2012 bidding. "They know if the
Olympic committee loses money, the government will step in and make up the
difference. You put it on the government's tab and call it a day."
Not so in the United States. In meetings last week with leaders of the four
potential bid cities, USOC leaders spent a good amount of time explaining the
JMPA. The USOC will decide early next year whether to bid for 2024.
"I acknowledge it's been a contentious issue in the past, both with New York
and Chicago," CEO Scott Blackmun said. "I can tell you we're working hard to
change our relationship with each bid city. We want to work with them to
develop a structure that makes sense for us and them."
Some form of the agreement has been in play since after the 1984 Olympics in
Los Angeles, which were the first to truly cash in on the marketing power of
the worldwide games. With fewer marketing rules in place, sponsors and the
hosts ran into some awkward situations --- for instance, film companies Kodak
and Fuji wound up paying big bucks to different entities and ended up battling
over the same Olympic ad space.
To avoid that, the IOC made the host country's Olympic committee sign over the
vast majority of its sponsorships to the organizing committee that forms when a
city is awarded the Olympics. London's domestic sponsorship program for the
2012 Games produced $1.15 billion.
IOC marketing director Timo Lumme says there's some flexibility built into the
program, so the USOC might not have to give away as much as some other
countries, but the principle of the concept stays true.
"If you're Company X, you don't want, in the morning, a person from the
organizing committee coming to you selling their wares, then in the afternoon
someone from the U.S. team coming and doing the same thing," Lumme said.
Most Olympic committees have been quick to sign the JMPA, knowing the surge in
interest sparked by a home Olympics will lure new sponsors and, more
importantly, that their national governments will step in to make up the
But in the United States, the sponsorship market is considered close to tapped
out and the federal government has a long history of not providing funding to
That puts the USOC is a spot of not having any clear path to make up the
sponsorship shortfall, which accounts for between 20 and 30 percent of its
revenues ($168 million last year) --- a good portion of which is used to fund
In the bid for 2012, the USOC didn't put a signature on the JMPA with New York
until the night before the voting. Chicago's JMPA was signed about a month
before the Games were awarded. Both cities finished fourth in the voting.
The USOC is optimistic its improving relationship with the IOC will provide
some leeway if it bids for 2024. In 2012, the USOC and IOC came to terms over a
long-simmering feud about revenue sharing, with the USOC agreeing not to take
as big a portion of the money the IOC receives from sponsors and TV.
When that deal was resolved, the USOC said it would start looking into bidding
for the Olympics again.
"With both the IOC and our potential bid cities, we have an opportunity to do
things differently," Blackmun said. "The fact that we're coming to the table
trying to honor their principles and their needs is just going to make this
process different than in the past."
AP Sports Writer Stephen Wilson contributed to this report from Lausanne,