Los Angeles officials and the International Olympic Committee have struck a deal that all but guarantees the city will host the 2028 Summer Games, according to the Los Angeles Times.
The IOC could contribute an estimated $2 billion for the Games and also waive payments traditionally made by the host city. The IOC also agreed to pay the city $180 million upfront and reduce its owed percentage of any post-Games surplus, which is expected to total $487.6 million.
City officials have thus far been conservative in their planning for the Games, using existing sports venues and housing athletes in local university dormitories. Local Olympic officials said the Games will cost $5.3 billion, recouped through ticket sales and sponsorships.
Infrastructure costs go a long way in determining whether hosting an Olympic Games is a success for the city and its business partners. There is a tradition of building cutting-edge venues that are seldom used or left to ruins after athletes and fans go home.
The IOC praised Paris and Los Angeles for the fiscal responsibility of their proposals. And it now looks like Los Angeles could have the best chance at a profitable Olympics given the financial concessions the IOC has made to make postponing its turn at the Games more palatable.
Playing host in 2028 allows Los Angeles time to ready its infrastructure. The city has fast-tracked work on the Purple Line subway extension, which should improve mobility around the city, with work currently underway on the $2.64 billion first phase. Crews are set to start construction soon on the $2.38 billion second phase.
No doubt both Paris and Los Angeles are trying to avoid the massive Olympic budget overruns that University of Oxford researchers have pegged at an average of 156%, the MIT Technology Review reported.
Meanwhile, Japan, which is currently underway with preparations for the 2020 Summer Games, in Tokyo, has seen its costs balloon. This has not gone over well with the Japanese people. At least one official has resigned over the financial debacle, and organizers scrapped plans for a costly Olympic stadium designed by late architect Zaha Hadid in favor of a more modest one from Japanese architect Kengo Kuma.