Update on LosAngeles’
Bid for the 2024 Olympics
MAC TAYLOR • LEGISLATIVE ANALYST • MARCH 2017
ExEcutivE Summary
In September, the International Olympic Committee (IOC) will choose LosAngeles or Paris to
host the 2024 Olympic and Paralympic Games. Since we published our November 2016 report on
LosAngeles’ bid, local Olympic organizers have updated the bid and their budget plans, including
a new concept to increase public participation in the Opening and Closing Ceremonies. is report
provides an update on those bid changes and discusses the federal government’s role in the Games,
as well as an economic study released by Olympic organizers in January.
As we discussed in November, LosAngeles city leaders have worked with local Games organizers
to greatly reduce the nancial risks that have plagued prior Olympics. Most importantly, LosAngeles’
2024 bid relies exclusively on existing sports facilities or facilities already on track to be completed by
2024 (such as the new National Football League stadium in Inglewood). at being said, history tells
us that signicant nancial risks can emerge aer cities are chosen to host the Olympics. Last year,
the Legislature passed a bill allowing the Governor to negotiate a backup nancial guarantee of up to
$250million with Games organizers. In the coming months, state departments should be gathering
information on potential 2024 Games impacts on state operations, as the Governor prepares to
negotiate this guarantee. If LosAngeles is chosen to host the Olympics, the Legislature, with its
ability to provide oversight to state departments, can play a constructive role in making the Games a
success and keeping its nancial risks low. In so doing, the Legislature can reduce the chance that any
of the $250million guarantee will ever need to be paid from the state treasury.
Bid updatE
LosAngeles and Paris are competing to
host the 2024 Olympic and Paralympic Games.
(A previous candidate city, Budapest, recently
withdrew its bid for the 2024 Games.) LA2024,
the private group of local bid organizers in
LosAngeles, submitted its nal bid documents to
the IOC at the beginning of February 2017.
We described LosAngeles’ Olympic bid in
our November 10, 2016 report, LosAngeles’ Bid for
the 2024 Olympics and Paralympics (see section
entitled “e LosAngeles Bid”). Since then, as the
February 2017 bid documents were nalized, there
have been updates to the bid, especially LA2024’s
new plan for the Olympics’ Opening and Closing
Ceremonies. Many of the updates—both those
discussed in this section and otherwise—reportedly
came from feedback provided to LA2024 by past
Olympic and Paralympic athletes, as summarized
in the nearby box.
New Stadium and the Ceremonies. LA2024
has proposed a new concept for the Games’
Opening and Closing Ceremonies, each of
which will feature events at both the LosAngeles
Memorial Coliseum and the planned LosAngeles
Stadium at Hollywood Park in Inglewood (the
“Rams/Chargers Stadium” on Figure1, which
is updated from the comparable map in our
Selected Venues for Los Angeles’ 2024 Olympic Bid
Figure 1
Downtown
Sports Park
Valley
Sports Park
South Bay
Sports Park
Long Beach
Sports Park
UCLA Olympic Village
and Training Center
Santa Monica Beach
Riviera Golf Course
Rose Bowl
International Broadcast Center
Santa Monica
Venice
Manhattan Beach
Hermosa Beach
Redondo Beach
Long Beach
LAX
USC Dedeaux Field
Staples Center
LAFC Stadium
Main Press Center
The Forum
LA Memorial Coliseum
Sepulveda Basin
Stubhub Stadium
Long Beach Arena
Long Beach
Waterfront
Figueroa St.
Rams/Chargers Stadium
LA Convention Center
City Hall and Grand Park
Note: Circles indicate the general location of sports parks—not the areas of their planned secure perimeters.
Honda Center
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Athlete Feedback on the Los Angeles Bid
In nalizing its bid, LA2024 surveyed thousands of former U.S. Olympic and Paralympic
athletes. Feedback reportedly t into seven categories, which helped shaped recent revisions to
LosAngeles’ bid. ose seven categories were:
• Seamless Transition to Olympic Village. Survey results emphasized that the University
of California, LosAngeles (UCLA) Olympic Village needs to feel instantly welcoming and
comfortable for athletes from around the world. To that end, UCLA sta and others—plus
LA2024 volunteers—would assist arriving athletes. e bid also anticipates that Olympic
and Paralympic athletes chosen to compete in LosAngeles would be provided handheld
wireless devices with an application dubbed the LA2024 Athlete Concierge. Via this app,
athletes would access maps, dining, entertainment, and transportation information.
• Nutrition, Rest, and Training Facilities. Olympic and Paralympic athletes demand
facilities that allow them to stay healthy and rested. UCLA facilities will provide varied
options to serve athletes’ diering nutrition, rest, relaxation, and training preferences,
including blackout shades, quiet rooms, and stretching/meditation areas.
• Family and Friends. LA2024 plans a rst-of-its-kind program to oer athletes’ families
a partially subsidized village of their own. Further, two complimentary tickets would be
provided for family or friends to attend each athlete’s competitions. e Athlete Concierge
would notify athletes if additional tickets are available.
• Get Around Without Hassle. Athletes told LA2024 that past transport schedules between
Olympic Villages and venues were oen time-intensive and confusing. Helped by planned
signage and volunteers, the Athlete Concierge also would provide athletes with clear
transportation information in the LA2024 plan.
• Fun and Socializing. LA2024 plans an Athlete House that athletes could reserve via the
Athlete Concierge to eat and socialize with friends and family. Athletes would have access to
transportation to LosAngeles-area attractions and special deals on Olympic merchandise,
which athletes and visitors oen trade for fun.
• Transition to Post-Games Life. For many athletes, the Games are the concluding event in
their sporting careers. Many athletes face challenges in transitioning to post-Games life.
Working with California’s public and private educational institutions, LA2024 plans to oer
programs to address these issues, such as a symposium to explore educational opportunities,
such as attendance at U.S. universities.
• Enhance Opportunities for Women. Enhancing gender equality in sports is a priority for
the Olympic Movement. LA2024 pledges to emphasize gender equity in its operations and
management sta, equal training and competition facilities, and new training opportunities
for women judges and coaches. Further, with women representing most of the U.S. Olympic
audience, LA2024 commits to work with NBC, other broadcasters, and Olympic sponsors
to promote female Olympians and Paralympians.
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November report). By including both stadiums—
and other events throughout the city—the LA2024
plan would expand signicantly the number of
residents and visitors able to participate in the
ceremonies. In the current plan, the ceremonies
would proceed as follows:
• Opening Ceremony (July 19, 2024). e
Opening Ceremony would begin with a
torch relay at the Coliseum, which would
have 70,000 spectators for a program
of entertainment and a live viewing
experience for all of the evening’s events.
e relay would proceed through city
streets to the Rams/Chargers stadium. At
this second stadium, 85,000 spectators
would witness the formal Opening
Ceremony, including the Parade of
Nations, the ocial opening of the Games,
and the lighting of the Olympic Cauldron.
In the current plan, the cauldron lighting
at the new stadium would trigger a lighting
of the Coliseum’s cauldron, which would
remain lit throughout the Games. Average
ticket prices are estimated at $1,783 at the
Rams/Chargers stadium (comparable to
prices for events like the Super Bowl and
the NBA Finals) and $350 at the Coliseum.
• Closing Ceremony (August 4, 2024). e
Coliseum would host the formal elements
of the Closing Ceremony, including the
Parade of Athletes and the traditional
performance by the 2028 Olympic host city
(scheduled to be chosen in 2021). Average
ticket prices at the Coliseum are estimated
at $1,226. A simultaneous celebration at the
Rams/Chargers stadium would have ticket
prices averaging about $300.
As bid planning proceeded last year, the possibility
of shiing ceremonies from the Coliseum to the
stadium in Inglewood caused concern among some
in LosAngeles. e two-stadium ceremony concept,
however, eventually received broad approval from
the LosAngeles City Council. Under the January
2017 memorandum of understanding (MOU)
between LA2024 and the city, any future change to
the ceremony plan requires City Council approval.
Moreover, essentially any change that moves a
planned competition venue, the Media Village, or the
Olympic Village outside city limits would require City
Council approval, which shall not be “unreasonably
withheld” or conditioned under the MOU.
Additional Venue and Village
Announcements. Since the release of our
November report, LA2024 has added a few venues
to its plan. As with the previously announced
venues, all of these new venues either exist or are
already on track to exist by 2024, as summarized in
Figure2 (an updated version of a gure from our
November report). e events aected by the recent
venue announcements include:
• Archery. A temporary venue at the planned
Rams/Chargers stadium—extending
over a man-made lake in the stadium’s
entertainment district—is the new Olympic
and Paralympic archery venue.
• Mountain Bike. Olympic mountain biking
events are slated for the Frank G. Bonelli
Regional Park in San Dimas, which is
a unit of the LosAngeles County park
system. According to bid documents,
with minimal enhancement required for
the park, the region “will be le with a
world-class course” able to host future
international mountain bike events.
• Modern Pentathlon. e modern
pentathlon combines ve dierent events—
pistol shooting, fencing, swimming, horse
riding, and running—said to simulate the
experience of a 19
th
Century cavalry soldier
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behind enemy lines. In the LA2024 bid
plan, all ve events would occur at a single
stadium: the StubHub Stadium in Carson.
Satellite Olympic Village at UC Riverside.
e bid plan also now includes a new satellite
Olympic Village at the University of California,
All Planned Olympic Venues Exist or Already on Track to Exist in 2024
Figure 2
Sepulveda Basin
LA Convention Center
City Hall and Grand Park
StubHub Center Facilities
Santa Monica Beach
UCLA Pauley Pavilion
USC Galen Center
Long Beach Waterfront/Pier
Lake Perris
Riviera Country Club
The Forum
Long Beach Arena
LA Memorial Coliseum
Honda Center
Staples Center
LA Football Club Stadium
a
USC Dedeaux Field
Some Sports Require
Modifications to Existing Venues
Temporary Upgrades
Permanent Upgrades
Support Infrastructure
Olympic and Paralympic Village (UCLA)
International Broadcast Center
a
(NBCUniversal)
Main Press Center (USC)
Media Village (USC)
Microsoft Theatre
Rose Bowl
Rams/Chargers Stadium
a
a
A venue or other facility that is already planned to exist in 2024, but has not been finished yet.
Existing or Already on Track
a
Bonelli Regional Park (San Dimas)
Satellite Village—Rowing & Canoe (UC Riverside)
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Riverside (UC Riverside) for rowing and canoe/
kayak channel athletes. e satellite village is
needed because these athletes’ venue—Lake Perris
(a state recreation area southeast of Riverside)—is
some distance from the main athlete’s village at
the University of California, LosAngeles (UCLA).
Athletes staying at UC Riverside would also have a
bed at UCLA before and aer their competitions.
Leading Anti-Doping Resources at UCLA.
Alegacy of the 1984 LosAngeles Games, the UCLA
Olympic Analytical Laboratory is one of the leading
research institutions in the eld of athletic doping.
It is also the world’s largest World Anti-Doping
Agency (WADA) accredited sports testing facility.
Just a few miles from the planned Olympic Village,
this UCLA facility would be the anti-doping lab for
the LosAngeles Games. WADA standards require
strict sample collection and processing standards
that the UCLA lab is well positioned to meet.
During the Games, samples will travel to the lab
using strict chain-of-custody procedures, including
electronically monitored vehicles and personnel.
In 2024, anti-doping discussions would be a part of
educational programs for athletes competing in the
LosAngeles Games.
updatEd Olympic Financial plan
With the submission of its nal bid documents
to the IOC in February, LA2024 updated its
nancial plan. A summary of the plan is shown
in Figure3 (amounts are in 2016dollars). Using
economists’ assumptions shown in the bid
documents—specically, an average annual
ination rate of approximately 1.9percent—the
$5.3billion of revenues shown in Figure3 translates
to $6.2billion in estimated 2024dollars.
10Percent Contingency Fund Budgeted.
e LA2024 budget plan includes a contingency
fund of $488million (2016dollars)—equal to
10.1percent of budgeted expenditures to host
the Games. In 2024dollars, this amount equals
Figure 3
LA 2024 Budget Plan
2016 Dollars (In Billions)
Revenue
Domestic sponsorships $1.93
Ticket sales 1.54
IOC contributions (broadcast revenues) 0.73
IOC Olympic Partner Program (sponsorships) 0.39
Licensing and merchandising 0.23
Other revenues (net) 0.51
Total Revenues $5.33
Spending
Venue infrastructure
Temporary infrastructure $0.86
Energy (excluding consumption) 0.26
Capital investment 0.07
Subtotal ($1.19)
Sports, games services, and operations
Venue operations management $0.31
Transport 0.18
Sports 0.09
Food and beverage 0.07
Test events 0.06
Logistics 0.06
Other 0.22
Subtotal ($1.00)
Marketing rights and royalties
$0.71
People management
$0.69
Technology
Information technology $0.25
Internet infrastructure 0.14
Telecommunications 0.14
Subtotal ($0.53)
Corporate administration and legacy
$0.29
Ceremonies and culture
Opening and closing ceremonies $0.14
Torch relay 0.03
Other (net) 0.02
Subtotal ($0.20)
Communications, marketing, and look
$0.19
Other expenses
$0.05
Total Spending $4.84
Contingency
10.1 percent of costs $0.49
Note: Based on LA 2024 Stage 3 Submission to IOC, February 2017,
Table 121A-121B.
IOC = International Olympic Committee.
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$567million. e plan is for this contingency fund
to be divided into two pots of money: an “allocated
contingency” of $250million governed under
the terms of LA2024’s MOU with the city and a
exible “unallocated contingency” for the rest of
the contingency account. Under the MOU, the
allocated contingency could only be used to cover
Games budget shortfalls with the city government’s
written consent, which may not be “unreasonably
withheld, conditioned, or delayed.” e MOU
does not limit LA2024’s use of the rest of the
contingency.
In LA2024’s MOU with the city, Olympic
organizers agree—beginning in 2022—to start
setting aside funds in the allocated contingency
account. e bulk of LA2024’s revenues would
be received in 2023 and 2024, and under the
agreement with the city, this allocated contingency
is scheduled to have a $70million balance set aside
by early 2024, with the remaining $180million
to be deposited in early 2025. In 2025, the Games
essentially would “close its books” and determine
whether any debts remain to be repaid by LA2024,
insurers, the city, the state, or other parties. If there
are prots remaining, these would be disbursed
pursuant to agreements with the U.S. Olympic
Committee and the IOC. In SB 1465 (de León)—the
2016 legislation allowing the Governor to agree to
a backup nancial guarantee for the Games—it
was envisioned that any Games prot would be
devoted to legacy programs for youth and other
Californians. is is similar to the manner in
which1984 Games prots were devoted to youth
sports programs in Southern California.
city agrEEmEntS
City of LosAngeles Is Lead Public Guarantor.
Before LA2024 submitted its nal bid documents
to the IOC, the LosAngeles City Council formally
agreed to provide a number of contractual
guarantees required for Olympic bid cities. Among
the most important of these guarantees is one
in which the city commits to cover any potential
nancial shortfall of the Olympic organizing
committee. (Senate Bill1465 limits the state’s
guarantee to cover Games shortfalls to a maximum
of $250million, but only aer all other required
sources of funding have chipped in, including the
city. e city, in particular, must expend at least
$250million of its security for the Games before
the state guarantee pays anything.) As discussed in
our November report on the bid, prior Olympics
have experienced billions of dollars of cost overruns
or other shortfalls. Accordingly, city ocials were
well aware of the nancial risks in approving this
bid and spent months developing strategies to
mitigate those risks, as discussed below.
Risk Mitigation Eorts. Perhaps the most
important risk mitigation eorts undertaken by
the city and its partners occurred early in the bid
process, at which time a plan for an expensive
new Olympic Village was scrapped and replaced
with the plan to use existing residential facilities at
UCLA to house athletes. In addition, bid organizers
and the city focused early on a plan to use existing
or already-on-track venues and infrastructure
exclusively for the Games, thereby eliminating the
need to build big, new facilities that have escalated
costs for prior Olympic Games.
e city and bid organizers also agreed that
LA2024 would—if the IOC picks LosAngeles to
host the 2024 Games—purchase an apparently
unprecedented set of insurance policies to cover
certain nancial risks. LA2024 is required to
maintain those policies “in accordance with
prudent commercial best practices,” including
policies to protect against natural disasters,
terrorism, event cancellation, and coverage for
reduced ticket sales and other revenue sources
should the events become less appealing. Public
liability and indemnity insurance is required to
protect against nancial risks associated with
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death, injury, or damage to property suered by
third parties. e city and the state must be listed
as “ additional insured” parties on these policies.
In addition, city representatives will make up at
least one-sixth of the LA2024 organizing committee
board of directors, with city representation also
guaranteed on board committees. Participation by
city representatives, it is thought, will help keep the
city apprised of issues with planning for the Games,
including potential increases in costs or revenue
shortfalls. Agreements between LA2024 and the city
also include transparency requirements, including
requirements to appear before City Council,
provide briengs with city sta, and submit various
informational documents.
KPMG Review. e City Council engaged
an independent rm, KPMG, to prepare a public
report reviewing the LA2024 nancial plan. at
report was released in December. KPMG said that
the level of rigor in the development of the budget
was “detailed at this stage of the bid process.”
KPMG found the budget to be “substantially
reasonable, complete, and [that it] adhered to a
bottom-up conservative approach.” e report
further noted, “e strategy of using existing
infrastructure rather than undertaking large scale
capital development reduces the overall risk of
hosting the Games for the City of LosAngeles.”
While the report included no major negative
ndings, it did comment that the ongoing viability
of the LA2024 budget depends on “continued
adherence to the assumptions and estimates made
at this stage in the bid process.”
KPMG did note a few relatively minor critiques
of the budget plan, such as the following:
• Ticketing Estimates Deviated From
Conservative Approach. In its budget
plan, LA2024 assumes that 97percent
of available seats are sold—similar to
the overall ticket sell rate for the 2012
Games in London (reportedly, the highest
level achieved among recent Olympics).
According to KPMG, this did not represent
a conservative approach of determining
assumed ticket sell rates “based on the
popularity of the sport and timing of
the session (weekdays versus evenings or
weekends).” e report noted that very
popular events (ceremonies, basketball,
track, gymnastics, and soccer) typically
account for 70percent of ticket revenue.
KPMG ran a stress scenario that reduced
less popular sports’ sell rates by as much
as one-h. at stress scenario, the
report concluded, reduced ticket and
corresponding food and beverage revenue
by over $40million—a very small potential
shortfall compared to the overall amount
of ticket revenue ($1.4billion).
• Limited Comparability to Industry
Benchmarks. In the areas of professional
sta costs, administration costs, and venue
contingency, KPMG found that LA2024’s
generally thorough estimates were of a
nature that made it dicult to compare
them to industry benchmarks. To some
extent, this is because of the unusual
features of LosAngeles’ bid—for example,
the lack of big, new venue projects. With
regard to venue contingency estimates,
LA2024 told KPMG that it included a
7percent to 12percent design contingency
within its gures. Construction
contingency costs were estimated on a
venue-by-venue basis “taking into account
the risk of temporary overlay versus
permanent investment,” KPMG wrote.
Furthermore, construction contingency
was included in the overall contingency
line item. us, “even though LA2024 did
not set aside amounts for market risk and
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owner-directed changes,” as similar events
sometimes do, the budget’s “contingency is
reasonable given the temporary nature of
the works, the current level of design, and
present stage in the budget process.”
FEdEral gOvErnmEnt rOlE
Olympics are mega-events, requiring billions of
dollars, years for preparation, and the involvement
of every level of government, including the national
government. Both the U.S. Congress (through a
resolution) and the new President have expressed
support for LosAngeles’ bid. While the U.S.
government—unlike national governments of
other Olympic hosts—is not a direct underwriter
of Olympic Games, it does play a signicant role
whenever the U.S. hosts the Games. We have
learned more about the federal government’s role
in a possible LosAngeles Games as the 2024 bid
has progressed. Below, we summarize the expected
or possible federal role in the areas of security,
immigration, and infrastructure funding.
Security
U.S. Secret Service Coordinates Security. If
LosAngeles is selected, the federal government is
expected to designate the 2024 Games as a National
Special Security Event (NSSE). (Other NSSEs
include Super Bowls, presidential nominating
conventions, and presidential inaugurations.)
Federal law mandates a single chain of command
for integrated security operations at NSSEs, led
by the U.S. Secret Service, which would be in
charge of coordinating the design, planning,
and implementation of Games operational
security. LA2024’s bid documents envision a
security command structure called the California
Olympic and Paralympic Public Safety Command
(COPPSC) that would include local, state, and
federal agencies—similar to the unied command
established in Utah during the 2002 Olympic
Winter Games. Other federal agencies to be
involved with COPPSC include, but are not limited
to, the following:
• Department of Homeland Security (DHS).
DHS (which includes the Secret Service)
would manage coordination of all federal,
state, and local agencies delivering security
services.
• Federal Bureau of Investigation (FBI).
e FBI would be the lead agency for crisis
management; hostage rescue; and detection
of chemical, nuclear, and biological weapons
attacks. e FBI’s role includes coordinating
with other national and international
intelligence agencies to identify, assess,
monitor, and prevent terrorist and other
security threats to the Games.
• Department of Defense (DOD). e
military, including the reserves and
National Guard, would support local
and other federal agencies with logistics,
communications, explosives detections,
and air support. For the 2002 Salt Lake
City Games, DOD provided 4,500 military
personnel to support security operations.
• Federal Emergency Management Agency
(FEMA). FEMA would coordinate federal
responses, working with state and local
agencies, in the event of unexpected
incidents, such as natural disasters, during
the Games.
• Federal Aviation Administration (FAA)
and Coast Guard. FAA would implement
temporary ight restrictions to protect
LosAngeles-area airspace during the
Games. Similarly, the Coast Guard would
implement temporary safety zones over
waterways aected by the Games.
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In total, the U.S. government would devote
thousands of its personnel and potentially tens
or hundreds of millions of dollars of support to a
LosAngeles Games. at support would encompass
years of planning and threat assessment aimed at
keeping LosAngeles safe during the Games.
Feds May Cover Portion of Security Costs.
Under LosAngeles’ MOU with LA2024, the city
and Olympic organizers agree to negotiate on a
level of enhanced municipal services necessary to
support the Games, and LA2024 will reimburse
LosAngeles and other municipalities for that
level of service. e LA2024 budget, according
to the analysis by KPMG, includes the cost of
requirements to support security activities in and
around the venues—for example, fencing, power,
cabling, tents/cabins, and some private security
for pedestrian and vehicle screening. But KPMG’s
analysis makes clear that a host city may incur
costs associated with the Games that are outside
of Olympic organizers’ budgets. For example,
KPMG observed that “operational security costs
for the full deployment of law enforcement,
overtime, planning, and coordination activities
are not included in the budget except for a modest
allocation” to municipal services.
In recent years, Congress has appropriated
funds to reimburse state and local law enforcement
for certain extraordinary security costs related to
NSSEs, which could cover a signicant portion
of extraordinary security costs not covered by
funding from Olympic organizers. For example,
Philadelphia reportedly applied for and received
$43million in NSSE-related grants for overtime
and added supplies needed to secure the 2016
Democratic National Convention, and Cleveland
reportedly received $50million for similar costs
for the 2016 Republican National Convention.
Grants have been made to NSSE cities recently via
congressional appropriations to the Oce of Justice
Programs at the U.S. Department of Justice.
KPMG also has recommended that LosAngeles
and other local law enforcement agencies “discuss
the additional costs of security beyond those
covered by NSSE designation, with the view of
determining the required timing for application
to grant programs.” Such additional grants may
be desirable to cover some costs not reimbursed
from either the Games budget or the NSSE-related
federal grants discussed above.
Immigration
U.S. Immigration and the Games. Dierent
countries choose Olympic athletes in dierent ways
and on dierent schedules, with team additions
and changes occurring until near the time of the
Opening Ceremonies. erefore, for a Games to
be successful, immigration authorities must act
quickly to facilitate quick turnaround of visas
and other documents that allow athletes, coaches,
ocials, and others to enter the host country. In a
bid document transmitted to the IOC in October
2016, LA2024 stated its intent to work with the
U.S. Departments of Labor, State, and Homeland
Security to devise expedited immigration
procedures similar to those used for the 2002
Salt Lake City Games. During the Salt Lake City
Games, work permits and entry visas for those
connected with the Games received priority status,
which reduced the average processing time to one
week.
President’s Executive Orders. On January
27, 2017, the President signed an executive order
that, among other provisions, temporarily
suspended entry of citizens from seven countries
(Iraq, Iran, Libya, Somalia, Sudan, Syria, and
Yemen). Following various court challenges, the
implementation of that order was enjoined. e
President signed a new order on March6 that,
among other things, temporarily paused entry to
the U.S. by nationals from six of those countries (it
excluded Iraq), subject to various exceptions. is
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order also is being challenged in federal courts in
Hawaii and elsewhere, as of the date this analysis
was nalized. On January 30, U.S. Olympic
Committee (USOC) ocials released a statement
based on discussions with federal ocials. e
statement said that the U.S. government had
advised the USOC that it will work “to ensure that
athletes and ocials from all countries will have
expedited access to the United States in order to
participate in international athletic competitions.”
Infrastructure Funding
Governor’s Request for Olympic-Related
Infrastructure Support. At his inauguration on
January 20, 2017, the President reiterated his intent
to focus on improving the nation’s infrastructure.
At the request of the White House, the National
Governors Association (NGA) has been assembling
lists of possible infrastructure projects across
the country, presumably for possible federal
funding support. In its response to the NGA on
February 7, the Governor’s Oce listed more than
$100billion in possible California infrastructure
projects, including expanding and improving the
LosAngeles County Metropolitan Transportation
Authority (Metro) purple line, the Metro project
to connect the LosAngeles International Airport
(LAX) central terminal area to the Crenshaw/LAX
and green Metro line, and the orange bus rapid
transit (BRT) line. e Governor’s Oce list noted
that these Metro improvements would benet
commuters and the 2024 Olympic bid.
Additional Infrastructure Funding Helpful,
but Not Required. In its bid documents, LA2024
stated that no new infrastructure projects are
required for the city to host the Olympics—a fact
that is unusual for Olympic cities. Nevertheless,
improvements are ongoing to the LosAngeles
area transportation system, like those funded
from the recently approved county sales tax
measure (Measure M). LA2024’s bid documents
highlight that these new improvements—including
improvements like those listed in the February7
letter from the Governor’s Oce—will aid the
region in hosting the Games. Specically, LA2024
notes that Metro’s current xed guideway transit
(including subway, light rail, and BRT) is slated
to expand from over 120 miles and 111 stations
now by adding about 20 miles of rail and 24 new
stations by 2024, including an automated people
mover at LAX.
Transit Key to Games Planning. Parking
near key venue locations will be restricted to
ocial Games vehicles and nearby residents and
businesses only. e Olympic bid also aims to
reduce Games-time trac volumes in LosAngeles
County by at least 15percent in part to help
ensure that athletes and other Olympic guests can
travel promptly to and from events in designated
Olympic Route Network lanes. For these reasons,
public transit options are key to the LA2024 plan.
Ticketed spectators, as well as Games volunteers
and others, will be provided public transport
access to and from the events they are attending.
e ticketing technology platform will include
information on transit options. KPMG, in its
evaluation of the LA2024 budget, noted that timely
completion of ongoing infrastructure projects
is important in ensuring an eciently managed
Games. Bid documents specically note that the
acceleration of the Purple Line to Westwood—
funded from Measure M and anticipated to be
completed in 2024—would be desirable for hosting
the Games. Added federal funding could boost that
construction eort.
EcOnOmic Study
e IOC requires candidate cities to submit
economic impact studies with their Olympic bids.
LA2024 released its required study in January 2017.
e study was conducted for LA2024 by Beacon
Economics, a California economics consulting
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rm, and the Center for Economic Forecasting and
Development at UC Riverside.
Study Uses Common Forecasting Techniques.
e LA2024 economic impact study uses a
“multiplier approach,” typical in such studies. In
short, the study considers likely levels of direct
spending by LA2024, Games attendees, and
visitors before, during, and aer the Games—
specically during a period ending in 2025.
As these expenditures occur—funded largely
from currency “exported” from other states and
countries into the LosAngeles economy—this
spending would create a “ripple eect,” resulting
in even more spending in the area economy and a
total economic impact that is greater than the level
of direct spending mentioned above. For example,
LA2024 will use funding from the IOC to hire
contractors to make temporary improvements to
venues, those contractors will buy supplies, and
their employees will buy groceries and other goods
and services. e study anticipates that there would
be between 2.6million and 3.3million people
attending the 2024 Games and that 41percent of
attendees would come from outside the LosAngeles
area. Such visitors from elsewhere in the U.S.
and around the world
will bring their money
and spend between
$1billion and $2billion
in LosAngeles, according
to the study, resulting
in hotels, restaurants,
and other businesses
buying supplies and
their employees, in turn,
spending some of that
money close to home in
Southern California.
Up to $10Billion
Net Increase in
Local Economy. e
LosAngeles-Long Beach-Anaheim metropolitan
area had a gross domestic product (GDP)—the
estimated value of goods and services produced
there—of $931billion in 2015—the lion’s share of
California’s $2.5trillion statewide annual GDP. As
summarized in Figure4, the study estimates that
the net additional economic output in the City of
LosAngeles due to the Games would total between
$9billion and $10billion (in 2016dollars). is
output would be spread across several years, mostly,
it appears, between 2020 and 2025, but with some
of the economic activity occurring slightly earlier
or later. In addition to the economic eect in the
city, the study nds there also would be economic
output gains elsewhere in California (estimated at
about $3billion in gross output) and in other U.S.
states too (estimated at about $4billion in gross
output).
Job Creation and Tax Dollars. By increasing
economic output, the Games would temporarily
increase employment in the LosAngeles area, as
well as state and local tax dollars. e economic
impact study estimates that the net increase
in full-time equivalent jobs due to the Games
would total over 60,000 in LosAngeles, as
Figure 4
Estimated Economic Output Effects in Los Angeles
Over Multiyear Period
Includes Direct, Indirect, and Induced Effects (In Billions, 2016 Dollars)
Low End
of Range
High End
of Range
Pre-Games Olympic spending $1.9 $1.9
During-Games Olympic spending 6.5 6.5
During-Games visitors 1.9 2.3
Pre-Games and Post-Games visitors 0.4 0.5
Gross Additional Economic Output $10.6 $11.2
Offsetting effects (effects of fewer regular visitors) -1.2 -1.6
Net Additional Economic Output $9.4 $9.6
Full-Time Equivalent Jobs
(Net Increase in Thousands)
62 65
Source: Study conducted by Beacon Economics LLC and the UC Riverside School of Business Center
for Economic Forecasting and Development, as commissioned by LA 2024.
12 LegislativeAnalyst’sOfcewww.lao.ca.gov
AN LAO BRIEF
shown in Figure4. e bulk of these jobs would
result from spending in the economy during the
Games—suggesting the jobs will be temporary.
e study also estimates an increase in state and
local tax revenue throughout California of around
$700million, as well as increases in federal tax
revenue.
Osetting Economic Reductions. e
1984 Olympics caused a signicant, short-term
reduction in overall visitation to LosAngeles.
Analysts attributed the reduction in part to fears
of trac congestion and of potentially exorbitant
hotel pricing. In addition, some facilities that
usually host conventions and other visitors were
unavailable for non-Olympics visitors at times.
LA2024’s economic impact study acknowledges
that there would be some similar concerns for the
LosAngeles tourism economy in 2024. Specically,
the study anticipates a 3percent reduction in total
visitor numbers. Nevertheless, the study’s authors
anticipate that visitors coming for the Games would
spend roughly double the amount of a normal
tourist to LosAngeles—more than osetting the
anticipated decline in visitation.
laO cOmmEntS
Big Intergovernmental Eort Required.
Figure5 (see next page) summarizes key elements
of the timeline if LosAngeles is chosen this fall to
host the 2024 Games. Between now and 2024, the
focus of activity would be on Olympics organizers,
their contractors working to get venues ready,
and international athletics groups. Over time,
however, the city, other local governments, and the
state—along with federal ocials—would have an
increasing workload to prepare to manage security
and other tasks related to the Games. Various
state departments would be involved, such as the
California Highway Patrol, Caltrans, the Military
Department, the Oce of Emergency Services, the
university systems, the state park system (involved
with the Lake Perris venue), the California Science
Center (adjacent to the Coliseum), and gambling
regulators (due to potential increases in illegal
betting related to the Games). Given the issues
that caused visitation declines in 1984, it would
also be important for the public-private California
Travel and Tourism Commission (Visit California)
to coordinate with local leaders in promoting
domestic and international tourism during the
Games.
Future Legislative Oversight. In the coming
months, the executive branch needs to be
increasingly well informed about potential issues
related to the Olympics. State departments need
to help LA2024 prepare, as well as make sure the
Governor is prepared as he enters into negotiations
with LA2024. Senate Bill1465 envisions that the
agreement between the Governor and LA2024
for a backup state nancial guarantee of no more
than $250million would “be determined on or
about the time” of LosAngeles’ selection as the
2024 host city—which would occur in September,
just six months from now. Given this time frame,
the Legislature may wish to enquire in the coming
months as to the administration’s eort to prepare
for possible negotiations with LA2024. For
example, what potential Olympic-related impacts
have state departments identied to date? Also,
does the administration have a plan to work with
the city and LA2024 to oset some state Games-
related costs with federal NSSE funding and to
meet regularly to discuss cost and operational
issues? By learning more about the entire scope
of potential Olympic-related impacts to state
government, the Legislature would be better
prepared to provide feedback to the Governor in
advance of these negotiations and to monitor how
state departments’ activities evolve later.
Eorts to Mitigate Financial Risk Noteworthy.
As we discussed in our November report,
LosAngeles’ bid makes signicant eorts to
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reduce the nancial risks that have plagued
prior Olympic cities. Basing its bid on existing
or already-on-track venues and infrastructure
reduces the chance that cost overruns will occur.
More broadly, if LosAngeles is selected, Olympic
organizers and local leaders can focus largely for
the next seven years on preparing the region to
host a fun, successful event for athletes and visitors,
rather than focusing on keeping big construction
projects on time and on budget. We agree with
city ocials that the current Olympic bid plan is
fairly low risk for the city and, by extension, the
state as well. Moreover, billions of dollars of outside
money—from visitors and international broadcast
Figure 5
Rough Timeline if Los Angeles Is Chosen to Host the 2024 Games
2017
• International Olympic Committee (IOC) Evaluation Commission visits city (May 10-12)
• Commission publishes findings and LA 2024 given right to respond (summer)
• Briefing for IOC Members and Sports Federations (July: Switzerland)
• IOC selection of 2024 Host City and LA’s victory celebration (September 13: Peru)
• City of Los Angeles must sign IOC Host City Contract without reserve or amendment
• Formal establishment of LA Organizing Committee for the Olympic Games
2018
• Events related to PyeongChang Olympic and Paralympic Winter Games (February-March)
• Launch of LA 2024 emblem and marketing program
2019
• Expansion of LA 2024 volunteer program
• National partnership announcements
• Launch of education and community youth programs
2020
• Update to Games plan and sustainability goals report
• Community participation programs
• Events related to Tokyo Olympic and Paralympic Games (July-September)
– Including LA 2024’s performance at Tokyo Closing Ceremony
2021
• Launch of four-year cultural program, national promotional program
• Launch of LA 2024 mascots and new product lines
2022
• Super Bowl LVI (February: Inglewood)
• Events related to Beijing Olympic and Paralympic Winter Games (February-March)
• Ticketing program launch
• Unveiling of torch, medals, and “Look of the Games”
2023
• Torchbearer selection campaign
• National Live Site plans announced
• Test events begin
2024
• Olympic Torch Relay crosses the U.S.
• Cultural Olympiad: arts and cultural activities leading up to the Games
• Olympic trials
• Final preparations across Los Angeles region
• Ramp-up of security and transportation activities to support the Games
• Promotional activity and sponsor activation in full force
• The Olympic Games in Los Angeles (July 19-August 4)
• The Paralympic Games in Los Angeles (August 16-29)
• Post-Games activities (venue disassembly)
2025
• Post-Games financial reporting
14 LegislativeAnalyst’sOfcewww.lao.ca.gov
AN LAO BRIEF
contracts—will ow into the LosAngeles economy
if it hosts the Games, generating some added local
economic activity and potentially hundreds of
millions of local and state tax dollars. We note
that the Games will generate at least several billion
dollars of added local economic activity even
if there are larger osets to economic gains not
identied in LA2024’s economic impact study
(for example, a greater reduction in non-Olympic
tourism than that study estimates).
Resolve Needed to Keep Costs Low. While the
current LosAngeles bid appears to be low risk,
it is easy to imagine that pressures could emerge
to change one or more elements of the bid plan
in future years. For example, expectations about
venue amenities needed for a particular sport
could change, and ocials could push LA2024
to make additional, costly improvements at one
or more sites. Alternatively, owing to the strict
timelines involved in planning for the Games, costs
for construction labor and supplies could escalate
more than Games organizers expect in the early
2020s, and this could escalate venue improvement
costs. Ticket revenues could fall below expectations.
Faced with any of these challenges, to keep the
Games as a low-risk nancial proposition, city
and state ocials would need to resolutely resist
any changes that could produce future nancial
shortfalls. For example, if requests emerge to
change a venue, city and state ocials would need
to encourage LA2024 to nd ways to minimize
any such costs. If ticket or other revenues fall short,
these ocials would need to encourage LA2024
to look for savings to oset that potential shortfall.
In our view, both city and state ocials, including
the Legislature, may be able to play a constructive
role in helping LA2024 cope with these sorts of
concerns.
Complexity for Every Level of Government.
e Olympics and Paralympics are among the
world’s largest, most visible public events. ey
bring organizational, nancial, logistic, and
security challenges far beyond other events hosted
by large cities. If LosAngeles is selected, hundreds
of millions of state tax dollars will be on the line,
and the City of LosAngeles will have much more
on the line as the primary nancial guarantor for
the Games. While the current bid is designed to
keep nancial risks low, every level of government,
including the federal government, will have a stake
in making the LosAngeles Games a success. At
the state level, the Legislature, with its ability to
provide oversight to state departments, can play a
constructive role in helping the Games and keeping
its nancial risks low.
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AN LAO B R I E F
16 LegislativeAnalyst’sOfcewww.lao.ca.gov
LAO Publications
This brief was prepared by Jason Sisney and Carolyn Chu. The Legislative Analyst’s Ofce (LAO) is a nonpartisan ofce
that provides scal and policy information and advice to the Legislature.
To request publications call (916) 445-4656. This brief and others, as well as an e-mail subscription service,
are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000,
Sacramento, CA 95814.
