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≡ INTEL REPORT ≡
The LA28 Olympic and Paralympic Organizing Committee has a massive, $7.149 billion budget, but the organization’s just-released audited financial statements for 2024 show that the money needed is really coming in now.
An amended LA28 annual report, initially submitted in March, was updated late Monday night with financial statements covering the 2024 calendar year, by far the earliest such statements have been made public.
What they show is encouraging from a financial standpoint, vs. the status as of the end of 2023:
● Assets rose from $217.72 million to $419.56 million – almost double – with $329.24 million in cash and equivalents, plus another $33.28 million in receivables.
● “Noncurrent” contract liabilities, in other words, sponsorship and other payments made to LA28 which are not ready to be recognized according to financial accounting rules, show up to $556.79 million from $367.19 million in 2023. This is very good news.
● While the organization shows a negative net worth of $323.86 million, adding in the “noncurrent contract liabilities” as real money actually shows $232.93 million in total assets and the working total is actually somewhat higher.
These figures show LA28 as moving in the right direction from a financial standpoint, as it continues to hire people – nearing 300 staff now – and continues the planning for the Games. For most of its first eight years, it maintained a tiny staff, but those days are over. There will be an estimated 4,000 employees by the time the Games come in 2028.
As for 2024 itself, the financials showed a huge increase in activity:
● Total revenues of $237.67 million, up from $82.18 million in 2023, almost triple!
● Sponsorship led all income with $188.16 million, or 79.2% of the total, plus licensing ($18.10 million), hospitality payments ($11.33 million) and other revenues ($20.09 million).
● LA28 still lost money for the year, spending $254.00 million, with sponsorship payables – including $64.00 million to the U.S. Olympic & Paralympic Committee – taking up $68.27 million, followed by office administration ($63.36 million, including the move to a new office space) and personnel ($41.114 million).
Sales and marketing costs were $30.58 million, with $25.39 million in grants – including the funding of the Youth Sports Partnership with the City of Los Angeles Recreation and Parks Department, and $20.76 million in professional fees, including architectural work.
● The bottom line was a loss of $16.32 million, to expand the on-paper net deficit to $323.86 million.
The notes to the financials explain the huge revenues influx in 2024:
● $34.90 million in broadcast rights
● $76.80 million in sponsorship fees
● $24.80 million in hospitality fees
● $75.00 million in ticketing fees
LA28 has significant revenue agreements and guarantees with the IOC-contracted hospitality provider, OnLocation, and with two ticketing agencies, and the nearly $100 million in 2024 revenue appear to be from those providers. The statement notes include:
“As part of this agreement, the Organization received an upfront cash payment of $75,000,000 which was recorded as a noncurrent contract liability. This will be recognized as ticket revenue when the Games are held.”
The Salesforce sponsorship agreement, announced in 2021, was ended in April 2024, and the notes specify that “One of the Organization’s sponsorship agreements was terminated in 2024 by mutual agreement and $124,931,511 related to the sponsorship termination was recognized as sponsorship revenue in the year ended December 31, 2024.”
In all, LA28 has received $689.17 million in revenue as of the end of 2024, still just 10.37% of its total budget.
On the expense side, rent for the new LA28 office in downtown Los Angeles, comprising about 160,000 sq. ft. will cost about $8.19 million from 2024-28, with outfitting and services to cost a lot more. The statements also noted that LA28 “recognized an expense” of $517,113 for liaison services provided by City of Los Angeles staff.
The report was assigned for review to the City Council’s Ad Hoc Committee on the Olympic and Paralympic Games, for a hastily-called meeting for Wednesday, 27 August, at 8 a.m. Pacific time.
Observed: The early publication of the statements, compared with all past years, is a welcome sign of transparency by LA28, and wisely so, as it demonstrates the promised revenue inflow, even with almost 90% of the total revenue budget still outstanding.
The revenue outlook will further be helped by the new venue-naming rights options approved by the IOC, creating a new revenue stream that will further help support the Games.
But there is still a long way to go.
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