Los Angeles 2028 chiefs say that giving up their challenge for the 2024 Games became a no-brainer after securing a package of financial sweeteners that means the city will get an Olympic boost years before they stage the extravaganza.
On Wednesday in Lima, the International Olympic Committee will make history with an unprecedented double award that sees the 2024 Games go to Paris while Los Angeles is handed 2028.
Los Angeles agreed to step aside for Paris after thrashing out a series of perks, some of which will be felt almost immediately.
These include a financial guarantee from the IOC which is $100 million (83 million euros) higher than will be awarded to Paris in 2024, with Los Angeles receiving $1.8 billion compared to Paris’s $1.7 billion.
Los Angeles will also receive an immediate, interest-free advance of $180 million to help finance the costs of the organising committee for an additional four years. As much as $160 million of that money could be pumped into youth sports throughout Los Angeles, helping to lay the foundations of an Olympic legacy more than decade before the Games take place.
Finally the IOC will give up its share of any surplus arising from the Games, projected to be as much as $500 million.
Normally the IOC takes a 20 percent cut of the surplus; for 2028 the organisation has waived its share, potentially handing Los Angeles an additional $100 million.
Los Angeles has also obtained the right to exploit Olympic symbols for longer than usual, another factor that is likely to allow it to maximise revenues. Usually host city marketing programs start around five years before the Games, as will be the case with Paris, beginning in 2019. However Los Angeles will be able to start in 2021.
“If these terms were presented to me today and I could choose between 2024 and 2028 with the terms we have, I would be derelict in my duty not to choose 2028,” Los Angeles mayor Eric Garcetti told AFP in Lima this week.
“What we can do is begin to deliver our legacy next year, instead of waiting until the year after the 2024 Olympics. To give my people eight years earlier, access to sports, young people in impoverished neighborhoods access to sports — that’s a no-brainer for me.”
The longer lead time also means the likelihood of overruns is minimised. By accepting 2028, Los Angeles, which has a bid based almost entirely on existing or temporary facilities, will have more time to ensure that venues are fully operational, said Patrick Rishe, the director of the sports business program at Washington University in St Louis.
“They played their cards extremely well, especially when you consider that if it had gone to a vote Paris probably would have won,” Rishe said.
Some have even wondered whether Los Angeles could have extracted a more generous package from the IOC.
Los Angeles bid chief Casey Wasserman brushed off that point of view when speaking to reporters in Lima this week.
“It’s easy to be a Monday morning quarterback,” said Wasserman. “I was there on the phone every day and I think we got a good deal. It was good for both sides and that’s where we ended up.”
“When the double award became clear, the opportunity to provide certainty out of a situation that never provides it was truly unique. The result we delivered economically, and with certainty, is unprecedented in Olympic history. We’re proud to take advantage of that.”