Why L.A. 2028 might not be such a good deal - for the city or the IOC

(LA 2024 photo adapted.)

(LA 2024 photo adapted.)

Now what for Los Angeles and a Summer Olympics it apparently won’t have until 2028?

For a number of reasons, an unprecedented 11-year wait between being named host city for the Games and staging them is fraught with potential pitfalls.

Costs will rise.  Contracts may need renegotiation.  Opponents will have more time to make their case.  The political landscape in Los Angeles could change dramatically.

Such issues need to be addressed because all signs currently point to the International Olympic Committee deciding in July to award both the 2024 and 2028 Summer Games rather than have Los Angeles and Paris contend for the lone prize they originally thought was at stake, the 2024 Olympics.

And, although this is less certain, the conventional wisdom now is that the IOC will not be smart enough to see the obvious reasons for giving 2024 to Los Angeles rather than Paris.

This is a time when the IOC needs an on-budget success in a democratic country to assure other such cities that bidding for the Olympics is not a quest for fool’s gold. 

Both cities have strong bid plans as written now.  But the Los Angeles 2024 plan, as I have noted before, maximizes the chances for just such a success and contains much less financial risk than the Paris bid.

So, presuming the 2024/28 deal goes through, that means the bidding for the ensuing Summer Games (2032) likely will begin some time in late 2024.

The last thing the IOC needs between now and then is reports of cost overruns in Paris on the big-ticket facilities it needs to build, an Olympic Village and an aquatics center, which have a combined projected 2024 price tag of $2 billion.  Past and future Games provide plenty of evidence such projections for major construction are likely to be laughably low.

Take Tokyo 2020:  Its budget is now pegged at nearly twice ($12.6 billion) the original estimate ($6.6 billion) – and almost certain to go much higher.  More sticker shock from 2024 could push the Games beyond anything citizens in non-authoritarian countries are willing to consider, especially since the IOC’s host city contract puts the host city on the hook for any shortfall.

Or this week's news that the Rio 2016 Olympics and Paralympics went $4.4 billion (or 50 percent) over their original budget of $8.8 billion, according to a report from Brazil's Governing Authority of the Olympic Legacy.

The IOC insisted last week that naming the 2024 and 2028 cities in 2017 means the later host will gain from not having to endure another costly ($60 million for LA 2024) and demanding bid campaign with an uncertain result.

But even though L.A. might have a problem in raising that money for another privately funded bid (and might choose not even to try), the price tag for a bid is a rounding error compared to the cost of staging the Games.

With the certainty of being the 2028 host would come plenty of uncertainty for Los Angeles. U.S. Olympic Committee CEO Scott Blackmun euphemistically called it "challenges" and "questions" in an interview with Around the Rings.

These would be among the challenges I see:

*The current, popular L.A. mayor, Eric Garcetti, who is all-in on Los Angeles 2024, cannot be in that office beyond a second term that ends in 2022.  There also is significant speculation Garcetti may run for higher office before that.

So while there will be a different mayor even if Los Angeles has the Games in 2024, the chances of the next race for the office turning into a mini-referendum on the Olympics and having an impact on them are far greater if the L.A. Olympics are not until 2028.

*Notwithstanding the LA bid’s minimization of risk by having all major sports venues and facilities (including the Olympic Village) already in place or under construction by other entities, what are called “overlay” costs in building temporary venues and configuring existing ones for Olympic use will undoubtedly increase from 2024 to 2028.  The L.A. 2024 bid book already projects those costs at $1.385 billion.

L.A. bid officials say their budgeting of expenses and revenue has been extremely conservative. But costs undoubtedly will increase from 2024 to 2028.

The bid committee also is confident revenues will increase.  But added revenue will depend on the overall economic circumstances and the value of the Olympics when an L.A. 2028 organizing committee begins to seek local and national sponsors.  All signs point to further diminishment of U.S. interest in the Olympics, especially with the next three in TV-unfriendly Asian time zones and the retirements of must-watch Summer Games stars Michael Phelps and Usain Bolt.

*The L.A. 2024 bid committee and its patron, the U.S. Olympic Committee, justifiably crow over the 88 percent support the bid received in a poll done by Loyola Marymount University in January and February 2016.  There has not been another poll since.

Have things changed since LA 2024 received overwhelming public support in this poll?  (Loyola Marymount photo)

Have things changed since LA 2024 received overwhelming public support in this poll?  (Loyola Marymount photo)

At that time, there was no organized opposition at all to (and little awareness of) the L.A. 2024 bid – perhaps, in part, because L.A. became the U.S. candidate city relatively quietly, as a replacement for Boston, the original USOC choice.

Things can change, as the Chicago 2016 bid committee learned.

Opponents of a 2016 Chicago Olympics, including the lead group No Games Chicago, had gained little traction until I broke a story in the Chicago Tribune June 17, 2009 saying Mayor Daley had unilaterally (no City Council vote) decided the city would sign the host city contract without any IOC concessions.  That pledged Chicago to cover any financial shortfalls.

That story soon turned into a firestorm of criticism, and the flames were not diminished by an eventual City Council endorsement of Daley’s pledge.  To many in the city who previously had paid little attention to the Byzantine proceedings in the bid process, the threat of taxpayer liability was a wakeup call.

Two months after the story appeared, the Tribune commissioned a poll about support that showed a dramatic drop from a previous poll by the newspaper six months earlier.  The February poll showed respondents 2-to-1 in favor of having the Olympic in Chicago; the late August poll, released a month before the IOC vote, showed 45 percent opposed, 47 percent in favor and a whopping 84 percent against using public money to cover any shortfall.

Neither the poll nor No Games Chicago was decisive in the IOC’s slap-in-the-face rejection of the city’s bid (fourth place of four finalists).  But they gave some IOC members cover (“See, you don’t want them”) for saying no to Chicago in a contest former IOC President Jacques Rogge had effectively rigged for Rio (be careful what you wish for.)  And NOlympicsLA, which has become a coalition of social activists, has yet to have any apparent impact on LA2024.

But what happens if someone like the Los Angeles Times commissions an independent poll now that the idea of another Los Angeles Summer Games has gone from possibility to near reality, with a concurrent increase in news reports about it.

The results may be nearly the same, which would be an inestimable boost for LA2024.  Or there could be significant slippage, which would be a boost for opponents, who would have plenty of time to gain support for giving back the 2028 Olympics, even if stopping the bid before the IOC’s 2024/28 decision seems improbable.  (For a history lesson, Google “Denver 1976 Winter Olympics.”)

Or it may be that everyone out there really is in LaLa land and isn’t paying attention.

Consider this:  after last Friday’s IOC executive board recommendation to award 2024 and 2028 at the same time, the IOC member, LA2024 board member and Olympic hockey great Angela Ruggiero asked her 257,000 Twitter followers to show support for LA2024 with a retweet.

In the next four days, her appeal drew all of 15 retweets, which I attribute more to indifference than anything else.

*When Los Angeles had the then penniless IOC over a barrel as the only candidate for the 1984 Summer Games, Los Angeles officials succeeded in removing the city’s financial liability from the contract.  (The USOC pledged its financial backing, but that was effectively an empty promise, because it, too, was broke at the time.  It became a non-issue because the 1984 Summer Games turned a profit.)

Last week, IOC President Thomas Bach seemed to reject out of hand the idea that whoever waits until 2028 deserves any compensation.  L.A. Mayor Eric Garcetti said that could include the IOC to begin funding "right now" for allow youth sports to be free in "every zip code" of the Los Angeles area.

(In its most recent annual report, for 2015, the IOC listed assets of $2.4 billion.)

No matter how Paris and Los Angeles and the IOC try to spin it, the 2028 host will be perceived as a runner-up.  So the consensus seems to be that Bach was posturing, and the IOC will make it more worth the while for the 2028 host to twiddle its thumbs for a loooooooooong time.   But the IOC being what it is, a collection of self-elected grandees who long have answered to no one outside their club, it is impossible to predict whether they will go for common decency.

And some in the IOC may think they have the upper hand with L.A., given the likely difficulty of funding another bid for 2028 or later.  Of course, if the IOC tells L.A. to take it or leave it, it risks torpedoing the original premise of the double award:  having a great city wind up a loser.

*There are two guaranteed good things about L.A. having to wait until 2028.

One is that more of its already planned public transportation upgrades will be in place by then. And the endless work at its major airport presumably will be over.

The other is that the current occupant of the White House cannot not be there in 2028, so there is no chance this divisive U.S. president will be in position to fill the ceremonial role of opening an event that is meant to bring the world together.

(Correction: an earlier version of this story said LA2024 chairman Casey Wassermann had suggested the IOC make a $2 million donation to youth sports in the Los Angeles area as compensation for waiting until 2028.   The suggestion came from L.A. Mayor Eric Garcetti, who did not mention a specific amount.)