ARTICLE
15 August 2011

2012 Games Dispute Settled

Another matter addressed in recent editions has been the ongoing dispute between the British Olympic Association (BOA) and the London Organising Committee (LOCOG).
United Kingdom Media, Telecoms, IT, Entertainment

Another matter addressed in recent editions has been the ongoing dispute between the British Olympic Association (BOA) and the London Organising Committee (LOCOG). As readers may recall, the issue revolved around the calculation and division of profits generated by London 2012 and whether or not the costs of Paralympics Games should be ring fenced from the surplus from the Olympic Games and underwritten by the government. The International Olympic Committee (IOC) had attempted to resolve the matter and the international governing body made a ruling in favour of LOCOG which the BOA refused to accept.

However, a dispute that looked likely to end up in the Court of Arbitration for Sport (CAS) has now been resolved. The key elements of the settlement deal are:

  • 60% of profits will be diverted towards the development of sport in the UK, with the remaining 40% being split equally between the IOC and the BOA;
  • LOCOG will waive the rights to any royalties on Team GB merchandise;
  • Additional marketing support for the BOA in terms of the Games legacy once the Games close;
  • The BOA will be afforded the right to purchase additional Olympic tickets, which it can sell to raise funds.

Comment

The timing of this dispute, and the fact that it was essentially a fight over money between two key Games' stakeholders, has been far from ideal and clearly it is good news that a resolution has been reached. However, it is difficult to see what it has actually achieved. Overall, the settlement does little more than confirm what had been previously agreed from a profit distribution perspective. Furthermore, the additional agreed terms are relatively minor matters that could have been resolved behind closed doors and without the negative publicity. The BOA wanted to secure a financial package that would provide the governing body with a surplus for the coming years, but the agreement in effect reflects what was already in place. The wisdom of escalating this matter as far as the Court of Arbitration for Sport, and the considerable legal costs the BOA will have incurred, must therefore be questioned.

The contents of this article are intended as guidelines for clients and other readers. It is not a substitute for considered advice on specific issues. Consequently, we cannot accept any responsibility for this information or for any errors or omissions.

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