An unsupportive public, the absence of a cohesive vision, and the prospect of taxpayers footing the bill for cost overruns doomed Boston’s 2024 Olympic bid. Now, with the U.S. Olympic Committee scrambling to find a replacement, it looks like Los Angeles is poised to win the nomination. Although hosting the international competition is nothing new for the City of Angels, how will L.A. avoid the pitfalls that ultimately sank Boston’s bid? And, if selected, will the city be able to emulate its success as the host of the 1984 games?
After Boston dropped its bid to host the 2024 summer games, the Olympics’ international body asked the U.S. Olympic Committee to pick another city. This left Los Angeles, the nation’s runner-up, primed to win the top spot.
L.A. hosted the Olympic Games in 1932 and 1984, making it one of the seven cities internationally to have held the games more than once. In 1984, the city relied on federal and corporate funding, and took advantage of its existing venues to make the games profitable, creating a paradigm for Olympic organizers ever since.
The bid for the 2024 Olympics has some parallels with the 1984 event. In the lead-up to the 1984 games, Los Angeles was seen as one of the few cities willing to take on the burden of hosting the international competition. At the time, the Olympics was besieged by cost overruns, political unrest, terrorism, and international boycotts. With Tehran as the only other international bidder for the ’84 games, Los Angeles had total leverage over the International Olympic Committee (IOC). With Mayor Tom Bradley leading negotiations, the city refused to sign a guarantee to cover financial overruns, and the IOC abided. But decades later, the IOC is in a stronger position. Any deal where the Olympic host does not agree to cover cost overruns is reportedly “dead in the water,” and Los Angeles will face stiff international competition from attractive locales like Hamburg, Paris, and Rome.
Los Angeles intends to borrow heavily from the 1984 playbook, with a plan to make use of existing facilities like the Staples Center, Pauley Pavilion, StubHub Center, and a renovated Coliseum. The city has already established a nonprofit organization to fund the games, reviving a similar set-up for the 1984 Olympics. And with the total cost of the games expected to come in at $4.6 billion, organizer LA24 is expecting the event to generate a $161 million surplus. The price tag includes a $400 million contingency budget, or about a 10 percent cushion.
While supporters have pledged that no taxpayer dollars will be committed to the event, the Mayor has also indicated that the City is willing to cover unanticipated overruns – a condition that was met with skepticism by city councilmembers tasked with authorizing the bid. Although Los Angeles has a track record of producing the Olympics without breaking the bank, elected officials and residents are justifiably wary of making guarantees to cover unanticipated expenses. Since 1960, the average Summer Games event is 252 percent over budget.
While we’re confident that Los Angeles has the wherewithal to pull together an efficient, relatively inexpensive, and profitable Olympics, our cash-strapped city would be advised to better hedge its bets against a ballooning budget. And even with L.A.’s track record for success, there’s still something farcical about the fabulously wealthy IOC relying on the beneficence of taxpayers to foot the bill for excesses that are anything but “unforeseen.”