Economics

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Expected Cost of L.A. Olympics Skyrockets to Nearly $7 Billion

12 Jun, 2019

By: Michael Popke

Los Angeles won’t host the Summer Olympics until 2028, but organizers already are predicting estimated cost overruns.

 

A report released by LA2028 on April 30 revealed that the anticipated price tag for staging the world’s grandest sporting event has climbed to $6.9 billion. Organizers cited the need to adjust for inflation after Los Angeles, which originally bid for the 2024 Summer Games, agreed in 2017 to wait four more years — opening the door for Paris to host the 2024 Olympics. The original cost estimate for Los Angeles to host the 2024 Games was $5.3 billion.

 

“We didn’t change the plan and we didn’t change the delivery of the plan,” committee chairman Casey Wasserman told the Los Angeles Times when the anticipated cost overruns were announced. “Our intent was to make sure there are no surprises.”

To that end, LA 2028 also forecast a corresponding bump in revenue that the paper said would cover all expenses through corporate sponsorships, ticket sales, merchandising and other sources.

The news prompted some city leaders to start asking questions.

According to KCET.org, part of the Public Media Group of Southern California, the Los Angeles City Council’s Ad Hoc Committee on the 2028 Olympic and Paralympic Games have asked representatives of LA 2028 and the company that prepared the budget for more information on some topics.

“Was the London games 20 percent off or two percent off?” Councilman Paul Krekorian asked, citing a desire for details about how accurate ticket sale predictions were for previous Olympics. “I want to get a scale of accuracy, because we’re projecting out now four years further into the future, so obviously with all of our assumptions, there’s a higher degree of inaccuracy just due to the passage of time, so it’s harder to predict.”  

The NOlympics LA group also has been active in voicing concerns about the 2028 Games, citing concerns that the Olympics might take away resources that otherwise could be used for city residents in poor and working-class communities. 

“The updated Olympic budget, like the bid book itself, is a formality created by the rich business interests pushing this bid and doesn’t reflect the true costs of the Games,” the group said in a statement. “At the end of the day, regular Angelenos are going to pay for this project, in more profound ways than taxes.”

The 2020 Summer Olympics in Tokyo originally were budgeted at $7.3 billion but are now estimated to cost $12.6 billion, according to the Associated Press, which also noted that the cost of venue infrastructure in Los Angeles jumped from $1.19 billion to $1.46 billion and the contingency fund guaranteed by the city and state increased from $487 million to $615 million. 

The 2016 Rio Olympics cost $13.1 billion, which was paid for with a mix of public and private money.

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