As expected, it was announced yesterday that the 2024 Olympics will be held in Paris, and the 2028 games in Los Angeles. With those two cities the only bidders for 2024, the International Olympic Committee had decided to just declare two winners at once, and once L.A. officials offered to go second, the deal was done.
So given the disaster that other recent Olympic games have been for host cities, should Los Angelenos be celebrating or cowering in fear? I’d previously argued that L.A. needed to drive a hard bargain with the IOC — as it did prior to hosting the 1984 Olympics, when it was similarly the only real bidder — and indeed the city did get some concessions in its deal:
- The IOC will share media and sponsorship revenues with L.A., which it estimates could be worth as much as $2 billion, though there are no guarantees.
- $180 million of this cash will be forwarded immediately as an advance, helping the city pay for some of its up-front costs.
- The city will set aside $487.6 million in contingency funds for cost overruns, and if the games come in under budget, they’ll get to keep all of it — the IOC is waiving its usual demand for a 20% cut of any surplus.
If that seems like weak tea to you as far as concessions go — Los Angeles will get to keep its own money if it doesn’t spend it! — well, that’s what counts as a good deal compared to the unmitigated disaster that many other cities’ contracts with the IOC have been.
I’m going to try to dive into the numbers a bit more in coming days, and L.A. does have a lot of existing venues that it can repurpose for the games, which should help keep costs down. But given that cities the Olympics almost always go way over budget and cities almost always lose money on them, getting a vague promise of lots of media riches and getting to keep any surplus if there is one isn’t exactly something I’d be running out into the streets to celebrate.
With the 11 year wait, one interesting thing is every current member of the city council & Garcetti will be term-limited out by then. If the #s come in bad in 2029, the pols at the time won’t have any responsibility.
Yes, LA does have most of the venues & athletes villages already in place. And the 11 year wait means most infrastructure improvements won’t need to be sped up.
The IOC is far worse than the American sport leagues in audacity. What the heck is an “Olympic movement”? Every time there’s a downturn in popularity, they turn to Los Angeles. Here we go again.
What “athletes villages” are already in place? Have the ones from 1984 been sitting dormant all this time, just waiting for the Olympics to return?
By “athletes villages” they mean the dorms at UCLA.
As a taxpayer if California who is on the hook if there are substantial overruns (but not the first one on the hook) I’m not sure how I feel about all of this but I will give LA credit for not building a bunch of boondoggles.
The State of California has also promised $250 million to guarantee against shortfalls. I can’t find the original bill, but here is an LAO analysis of it: http://www.lao.ca.gov/Publications/Detail/3695. Given the date, it is probably in the budget somewhere.
Makes sense, since California already has a $137,000,000,000 state debt or anything like that to deal with. What’s another $250 million to them?
Let me try that again: “Makes sense, since California already has aa $137,000,000,000 state debt to deal with. What’s another $250 million to them?”
The best chance Olympics have of being winners is when they’re held in large cities that already have most or all of the required infrastructure. Tokyo, Paris and LA are 3 pretty good examples of such cities.
It’s when people do goofy stuff like Sochi that you have real problems. Okay, “Goofy” isn’t the right word. “Corrupt” is a better choice.
By the way, I love the prospect of California building, and then keeping, a velodrome. I see real possibilities for that.
FWIW, all those events are to take place at the VELO Sports Center in Carson. I guess LA already had a velodrome. Who knew?
Never heard of it. Even better.
It sounds like a “great” justification for Ballmer and the Clippers to build a new multi-purpose arena is going to waste.
Here is a list of venues that are going to be used in 2028 that weren’t around in 1984:
New NFL stadium (Rams), Staples Center (Lakers), Stub Hub center (Galaxy), Soccer stadium to be built (LA FC), Galen Center (USC hoops), Microsoft Theater, Honda Center (Ducks). The only venue used in 1984 that isn’t around is the LA Sports Arena, which is where the new soccer stadium is going.
LAX airport is (finally) upgrading transportation access, and will be fully functional in 2025. A benefit to getting pushed out to 2028 is the project should be complete by the Olympics. USC is spending their own money to refurbish the Coliseum. Pasadena just refurbished the Rose Bowl.
All of this was done whether Olympics came or not.
If anyone can break even on the Olympics, it is Los Angeles. 2 sports teams in every major sport (and minor ones), plus two world class Universities with high quality sports facilities.
If there is one city that can make a profit from the Olympics it is Los Angeles.
Perhaps… they have certainly done it before.
As we discovered from Vancouver and London, though, ‘breaking even’ is only possible if you don’t count the onerous security costs (as far as I’m aware, neither released the security costs but each was believed to be in the billions – $1bn for Vanc and $2-3 for London).
Major events would have to be staggering cash cows to make back all expenses these days. I doubt that is likely for any Olympics/World Cup/etc
I think the positive to take from this is that fewer and fewer cities are prepared to bid on the Olympics as time marches on.
The reality is that the IOC had just two interested parties for the next two summer olympics, and they have now used up both. Whither?
Maybe China will be willing to bid again for the next available date, and the air in much of that country might be cleaner next time around.
It’s a slow process, but things are changing. I’m sure the IOC will find partners for summer and winter olympics in future, but I bet the deals will look a lot more like LA (1984 or 2028) than Sochi, London or Rio. Those days appear to be, if not over, at least confined to the the realm of dictatorships.
There is already a surprising amount of interest in the 2032 Olympics, including Germany, Australia, and India: http://www.flotrack.org/article/59102-these-countries-are-already-building-bids-for-the-2032-olympic-games#.WYNNL63Mz2Q
But it’s early days, and these boosters are talking up interest. Really it’s very difficult for me to see a successful German bid after Hamburg pulled out this past cycle; and indeed I would think that as the process continues there will be a lot of political resistance in all of these places. I agree that it’s unclear where the Olympics goes from here.
Interest and ratings are trending downward in their strongholds. The rest of the world barely care.