In August, LA28, the planning committee for the Games, announced that it had deals with Comcast and Honda to name the venues for squash and volleyball.[1] To the average viewer who only tunes in to the Olympics every two years, this may not seem like a big deal considering coverage of the Olympics seems to be inundated with branding from corporate partners. However, for those who follow the Olympic Movement even during non-Olympiad years, this news may come as a surprise and signal a shift towards a more financially sustainable future.
In the past, the Games have operated under what is called a “clean venue” policy, which essentially strips the corporate name from an existing structure. This policy derives from the powers vested in the IOC Executive Board under Rule 51(1) of the Olympic Charter.[2] This rule gives the IOC Executive Board the power to determine the protocol applicable at all venues and sites used for the Games.[3] The stated purpose of the clean venue policy is to “protect the integrity of the Olympic Games and highlight the performance of athletes” by maintaining “an environment fundamentally free of commercial or political messages.”[4] Because of this policy, LA28 needed the International Olympic Committee’s permission to sell naming rights.[5]
The cost of previous Olympic Games has caused some controversy, due to cost overruns and the burden it places on cities, who end up saddled with debt. According to the Council on Foreign Relations, it took Montreal 30 years to pay off its debt from the 1976 Games and Greece’s debt after the 2004 Games contributed to the country’s bankruptcy.[6]
Since the Los Angeles Games have been touted as a fully privately funded event, with no significant infrastructure projects needed, other sources of revenue besides broadcasting rights, ticket sales, licensing and hospitality are needed to even come close to breaking even. Naming rights are one such source.
Corporate naming rights can be a substantial source of income for sports teams. In 2021, after the Rams relocated to Los Angeles, the LA Stadium and Entertainment District – the owner and operator of the new Rams’ stadium – negotiated a deal with SoFi whereby SoFi would pay upwards of $30 million per year to have the naming rights to the stadium, as well as advertising placed in certain spaces around the venue. The 20-year agreement is worth an aggregate $625 million per the deal’s SEC filings.[7] Also in 2021, it was announced that Crypto.com, a Singapore-based cryptocurrency company, will reportedly pay around $700 million over 20 years for the naming rights to Los Angeles’ former Staples Center, the home of the NBA’s Lakers, the NHL’s Kings, and the WNBA’s Sparks.[8]
While the race for the 2036 Olympics has stalled,[9] the sale of naming rights may be a way for developing countries, whose Games have historically been met with cost overruns due to significant infrastructure projects[10], to earn revenue and lessen the burden on the public. There are currently at least ten bidders in the race for the 2036 Olympics, including Qatar, Turkey, and Indonesia, with India being the frontrunner. [11]
As for the 2028 Games, LA28 said it will only sell naming rights to existing sponsors. For example, the planning committee would only sell the naming rights to SoFi Stadium to SoFi. If SoFi declined to bid on the rights, then the stadium would be unnamed during the Games. There has been no public comment made by the owners of the permanent venues yet on this matter.
[1] https://frontofficesports.com/los-angeles-olympics-naming-rights/
[2] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/file:///C:/Users/stacy/Downloads/Clean%20venue%20guidelines.pdf
[3] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://stillmed.olympics.com/media/Documents/International-Olympic-Committee/IOC-Publications/EN-Olympic-Charter.pdf
[4] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/file:///C:/Users/stacy/Downloads/IOC_Ambush_Marketing_2000_ENG.pdf
[5] https://frontofficesports.com/los-angeles-olympics-naming-rights/
[6] https://www.cfr.org/backgrounder/economics-hosting-olympic-games
[7] https://www.sportsbusinessjournal.com/Daily/Issues/2021/06/11/Facilities/SoFi/
[8] https://www.euronews.com/next/2021/11/17/staples-center-is-changing-its-name-to-crypto-com-arena-in-the-biggest-naming-rights-deal-
[9] https://apnews.com/article/ioc-olympics-coventry-india-2036-trump-2028-8703988f0678d9a5f358678cf9213741
[10] https://www.cfr.org/backgrounder/economics-hosting-olympic-games
[11] https://apnews.com/article/ioc-olympics-coventry-india-2036-trump-2028-8703988f0678d9a5f358678cf9213741
Stacy Walker is a third-year law student at the University at Buffalo School of Law. Her areas of interest lie at the intersection of sports and corporate transactions, with prior research done on private equity investments in youth sports and professional stadium development projects.
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