Only two prospective host cities, Los Angeles and Paris, remain in the hunt for the 2024 Olympic games. Two other finalists, Rome and Budapest, dropped out of the race in part because of concerns about the kind of cost overruns that have plagued recent games.
After demonstrators took to the streets in Rio de Janeiro to protest the costs associated with the most recent games, Angelenos can’t be blamed for being concerned about the negative effects of hosting—especially amid mounting evidence that it’s simply a losing proposition. But a new report from the California Legislative Analyst’s Office suggests that the city’s plan for a fiscally responsible games will keep the risks of major financial losses relatively low.
The report notes that if Los Angeles is chosen to host the games, the state will be on the hook for up to $250 million of any cost overruns incurred by the games. As such, in preparing a budget for the games, organizers are setting aside a contingency fund amounting to about 10 percent of the $4.84 billion they expect the games to cost.
The contingency fund will include $250 million that can only be used to cover budget shortfalls, theoretically ensuring that the state won’t be stuck with the bill after the closing ceremonies end.
Planned expenditures are low because the LA games wouldn’t require much new infrastructure. Other than a few temporary venues, the city’s plan relies on facilities that already exist or will exist by 2024 (like the under-construction NFL stadium in Inglewood).
The LA 2024 budget plan predicts the games will generate about $5.33 billion in revenue, with most of that coming in the form of corporate sponsorships and ticket sales (tickets for the opening ceremonies are expected to fetch more than $1,700-a-piece).
If all goes to plan, the games should generate a healthy profit—as they did when Los Angeles last hosted in 1984. Of course, if there’s one lesson to be learned from recent games, it’s that these things rarely go according to plan.
- LA now only has one competitor for the 2024 Olympics [Curbed LA]
- LA finalizes its bid for 2024 Olympics [Curbed LA]
- Mapped: the sites of LA’s Olympic bid [Curbed LA]
- How LA’s Olympic Bid could steer the games in a new direction [Curbed LA]