International Olympic Committee’s (IOC) new hospitality partner looks set to pay Olympic and Paralympic bodies at least $1.3 billion (£917 million/€1.1 billion) over the course of their three-Games agreement.
This has emerged in the small print of a Securities and Exchange Commission (SEC) filing published on the same day as the groundbreaking deal with United States-based On Location was revealed in an announcement on the IOC website.
The filing related to first-quarter financial statements from Endeavor Group Holdings, the recently-floated sports and entertainment conglomerate that is On Location’s parent.
A Subsequent Events Note deep in the body of this document states that, subsequent to March 31, the company had “entered into certain new arrangements increasing its purchase/guarantee agreements by $1.3 billion, which will be due in 2021 through 2028”.
There is nothing explicit linking this disclosure with the IOC deal, but the stipulated time-frame clearly matches.
Sports Business Journal, which is believed to have been the first media organisation to spot the discreet Note, said that “sources familiar with the deal” had confirmed the link.
It is well within the bounds of possibility that the sum ultimately handed over to the Olympic and Paralympic Movement might exceed $1.3 billion, since it is typical for transactions of this type to include a profit-share.
The new agreement means that On Location will act as exclusive service provider for the Paris 2024, Milan-Cortina 2026 and Los Angeles 2028 Olympic and Paralympic Games hospitality programmes.
It will deliver packages including tickets, travel, accommodation and in-venue and host city hospitality.
It was stated that the new model would also “enhance” services for the families and friends of participating athletes, with “support for travel, access to accommodation, and other services, including dedicated ticket inventory”.
How the new income stream will be divvied up within the Olympic ecosystem has yet to be stipulated in public, although Milan-Cortina 2026 President Giovanni Malagò immediately highlighted the “important revenue stream” which this new approach to hospitality would provide.
The impact on the traditional Authorised Ticket Reseller (ATR)-based Olympic ticket-selling system – which may well be profound – has also yet to be made clear, though Los Angeles 2028 chairperson Casey Wasserman described modernising the hospitality and ticketing platform as a “major priority” in preparations for the Californian city’s third Olympics.
Industry expert Ken Hanscom, chief operating officer of TicketManager, described the new deal as “a significant step forward” in a series of Tweets outlining his detailed reaction to the announcement.
“The exclusivity and single provider enable them to more effectively price and plan across international markets than the current independent, distributed model, which should increase revenue and reduce costs,” Hanscom said.
He added: “While clearly ticketing and hospitality is changing, people often do not realise how large the ecosystem is…
“Outside the core IOC, Organising Committee and National Olympic Committees, there are hundreds of organisations, sponsors, national governing bodies, International Federations, and unaffiliated bodies who execute programmes that include travel, lodging, hospitality, and logistics for each Games…
“This means there will continue be opportunities for these existing organisations…
“Important to consider that many secured assets such as hotels for upcoming Games before this deal was done.”
Hanscom suggested that Endeavor might now turn its mind to purchasing traditional ATRs.
“There is also nothing keeping Endeavor from partnering or purchasing these organisations to add to or accelerate their portfolio of talent, assets and capabilities,” he Tweeted.
“Why wouldn’t they?”