2028 Olympics Warnings for Los Angeles

(ATR) An independent report for the California state legislature warns that caution will be needed if Los Angeles is awarded the 2028 Olympic Games.

But the report makes clear that for the 2024 Olympics, the Los Angeles bid is a low risk proposition. That has been the finding of two previous reports issued by the Legislative Analyst’s Office of the California Legislature.

The independent agency reviews projects that involve legislative initiatives, which in the case of the Los Angeles Olympic bid means a $250 million guarantee against shortfalls.

The report from the LAO comes a day after the IOC Evaluation Commission issued its findings from its visits to Los Angeles and Paris in May. That IOC report rated both cities "outstanding" and showed no doubt for either city to host an Olympic Games. The report from the commission will now be used as grounds by the IOC to changes rules next week to to choose both cities as hosts, one for 2024 the other for 2028.

In the last report from the LAO six months ago, rumors about that possibility just beginning. The LAO said it would not be able to comment on the implications of such a change. But with the reality now settling in, the LAO is ready to speculate.

The LAO report does not rule out a 2028 games for Los Angeles. But the analysts say be careful.

"Assuming the IOC approves such a proposal, LA 2024 and city officials will have to respond in some way. The date of any such response is not known, but at the very least, it seems that city officials would have to take a formal action at some point in the future to agree to host the 2028 Games in the event that Paris is awarded the 2024 event," says the report.

"The state’s legislation to authorize the Governor to negotiate a $250 million backup guarantee covers only 2024. Further legislative action, therefore, would be needed to amend that legislation to cover a possible 2028 Olympic and Paralympic Games in Los Angeles. One question in that event would be whether a larger backup guarantee is needed. Put simply, due to the time value of money, $250 million from the state will buy less stuff in 2028 than it would in 2024," says the LAO.

New legislative hearings and newbudget analysis might all be needed if the state assembly refuses to rubberstamp a change in plans for the Olympics to 2028. All of this will take time and means for the IOC that simple act of awarding the 2028 Games to Los Angeles would not be a fait accompli. Paris could also encounter the same complications with government guarantees.

Even more sobering is a somewhat pessimistic view the LAO offers as a result of adding another four years to the run-up to a Los Angeles Olympics.

"On the other hand, four more years means there is a possibility that some existing venues will not be available or viable as the needs of various Olympic sports evolve," the report says.

"There is a possibility, furthermore, that the Olympic and Paralympic program of events will change more and more with the passage of four more years—with events added or dropped—necessitating further changes in the Los Angeles venue plan (beyond those event changes that might already occur between now and 2024).

"Finally, with the Games funded largely by broadcast contracts, corporate sponsorships, and ticket revenues, there is the possibility that the Olympic brand will become less popular over time, reducing the amount of money (in inflation-adjusted terms) flowing into IOC and Olympic organizing coffers," the LAO concludes.

The "opportunities" that it predicts for Los Angeles by hosting the 2028 Games number only two. More time will be available to complete mass transport projects. The second is the possibility that the IOC might provide financial inducements to wait for 2028. The report admits that would be unlikely and comments from the IOC would confirm that.

So while there are doubts to be dealt with according to the LAO for 2028, the report confirms previous findings that 2024 remains a low risk proposition.

"The primary reason for this is that the bid implements the goal of Olympic Agenda 2020 to rely on existing or already-planned infrastructure and venues, rather than costly new construction for the Olympic Village, major venues, and transportation infrastructure. Like other observers, we think that Los Angeles’ bid is a role model for future Olympic and Paralympic host cities," says the LAO report.

Reported by Ed Hula.