On Wednesday, the International Olympic Committee (IOC) announced On Location Experiences (OLE) will be the exclusive hospitality service provider for the upcoming Olympic and Paralympic Games in Paris (2024), Milano Cortina (2026) and Los Angeles (2028). The Endeavor-owned company will work alongside the games’ local organizing committees to deliver ticket-inclusive travel and hospitality experiences for fans and stakeholders alike.
The deal reflects a change in the IOC’s approach to hospitality, one designed to replace the fragmented, scandal-ridden marketplace with a safer, streamlined solution. The $1.3 billion agreement is also believed to represent one of, if not the, largest pact in hospitality sector history.
Our Take: OLE won a highly competitive, multi-round bidding process, beating out the likes of Legends, Comcast (NBC) and Dentsu. Their track record of success working with huge rights holders (see: NFL) on hospitality, tickets, travel, event production and yield management for large-scale events seemingly made them the safest choice to solve the problems that needed solving. Said IOC President Thomas Bach in a statement: “One of the recommendations of Olympic Agenda 2020+5 is to deliver additional turnkey solutions that could be provided to [organizing committees] to simplify the delivery complexity of the Games. This new solution will deliver a simplified, secure process for fans around the world to attend the Games.”
The deal is a monumental win for On Location Experiences and relatively new CEO Paul Caine (Jan. ’20). While certainly dependent on the number of tickets and event allocation (remember, there are more than 300 ticketed events at the Olympics), Ken Hanscom (COO, TicketManager) said a $1.3 billion purchase agreement could result in more than $3 billion in revenue for the company over the course of the deal. “Tokyo [alone] was expected to generate over $800 million in ticket revenue. So, if you look out over the next [three Olympiads], account for inflation and the markup for hospitality, you can get the math there [$3 billion].” If one were to assume a conservative 20% profit margin, the deal would mean a $600 million bump to OLE’s bottom line over the eight-year period.
The NFL is also a clear winner in the deal. The league is believed to control between 25-30% of OLE.
The pact represents a significant shift in the IOC’s approach to hospitality. In the past, the IOC assigned tickets to National Olympic Committees (think: USOC), who then farmed out the sales effort to companies like CoSport and Jet Set Sports. The tickets ultimately made their way to a series of authorized ticket resellers before landing in the hands of the consumer. Moving forward, the strategy will look more like how the NFL manages the distribution of Super Bowl tickets. The IOC will assign the majority of tickets to OLE for packaging, marketing and sale worldwide.
As Bach noted, at least part of the reason the IOC changed its approach was the lack of control and the disjointed brand-guest experience under the expiring system. There are countless examples of ticketing-related scandals and controversies from recent Olympiads.
The press release also made sure to point out that the new model would “enhance services for athletes’ families and friends wanting to see their loved ones compete at the games, with support for travel, access to accommodation, and other services, including dedicated ticket inventory.” Remember, the athletes don’t know ahead of time how long they’ll be in the competition. So, it’s difficult for their loved ones to plan accordingly. Having control over ticketing and hospitality worldwide should enable the IOC to better serve those individuals.
Of course, as the rights holder, there is a financial upside to moving toward a more streamlined, direct-to-consumer experience, too. While the IOC declined to shed light on what the deal means in terms of dollars and cents for the organization, the NOCs and/or the organizing committees, Giovanni Malagò, chairman of the Milano-Cortina 2026 Games, said in a statement that hospitality would be “an important revenue stream” for the event. The exclusive nature of the deal should help the IOC eliminate much of the leakage to the secondary market that has plagued the organization in the past.
It’s fair to wonder how companies like CoSport and Jet Set, which generate a significant portion of their revenue from the games, will operate without the Olympics business. But being left on the outside doesn’t necessarily spell the end of those businesses. As Hanscom said, while their role would “likely be diminished [as it relates to ticketing and hospitality], there are roles for them and others to [still] play within the ecosystem,” (like logistics).