LA 2024 releases revised budget for Olympics, revenue to equal $5.3 billion in costs – Los Angeles Times
The private bid committee seeking to bring the Olympics back to Southern California for a third time has released a new budget estimating it would spend $5.3 billion to stage the Games.
The total exceeds the initial $4.6 billion estimate included in LA 2024’s original budget from the summer of 2015. However, that budget also had $1.7 billion in costs not tied to the local organizing committee, bringing the total even higher.
The new budget does not include any of those added costs.
Projected costs have risen across the board in categories such as venue infrastructure and workforce expenses. The new budget also includes an increased contingency, setting aside $491 million to cover any cost overruns.
Bid leaders have also increased projected revenue to $5.3 billion, estimating they can cover all expenses through broadcast, sponsorship and ticket revenue.
The balanced bottom line also differs from the original budget, which projected a $161 million surplus.
Among the legacies of the successful 1984 Los Angeles Games was a surplus that, decades later, continues to fund youth sports programs throughout the city.
From the start, the L.A. bid has relied almost exclusively on the region’s array of existing venues, such as the Coliseum, Staples Center and the StubHub Center.
The LA 2024 committee also hopes to make use of a state-of-the-art NFL stadium planned as the new home for the Rams in Inglewood.
The new budget arrives roughly a month after a report from the state’s Legislative Analyst’s Office noted the “low-risk financial strategy” of the bid but recommended the legislature establish an oversight committee.
“While the Los Angeles bid aims to minimize financial and execution risks, history tells us that there may be no way to completely eliminate these sorts of risks for a ‘mega–event’ like the Olympics,” the report stated.
The Legislative Analyst’s Office said “the state will have a few hundred million dollars of taxpayer funds on the line” should problems arise and costs exceed revenues.
There is reason for concern, given the Olympics’ recent history of running wildly over-budget.
The 2014 Winter Games in Sochi, Russia, may have ranked as the most expensive ever at about $50 billion. Organizers of the 2016 Summer Games in Rio de Janeiro scrambled to make last-minute cuts in the face of a money crunch.
Now, costs for the 2020 Tokyo Olympic are rising dramatically, with a Japanese government panel estimating the total bill could exceed $30 billion, or roughly four times the original estimate.
At least some of those expenses can be attributed to the creation of major venues such as an Olympic stadium. The L.A. bid contains no such construction plans.
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