Landing the Olympics costs money – some $16 million so far, according to June tax filings from the LA 2024 exploratory committee, which oversaw the bid. But the committee managed to pay the tab without using taxpayer dollars, relying on 29 individuals and organizations who each donated at least $1 million to fund operations.
A who’s who of civic and business leaders chipped in, including David Geffen, Tony Pritzker, Haim Saban, Jeanie Buss and Tom Gores – each of whom contributed $1 million to the committee.
LA 2024 Chairman Casey Wasserman, chief executive of the eponymous Westwood sports and entertainment agency Wasserman, put in $3 million.
The International Olympic Committee’s vote last week confirmed speculation that Los Angeles is the likely destination for the 2028 Summer Games, with Paris in line to receive the 2024 bid.
The dual-track arrangement must still be ratified at a September confab in Lima, Peru.
The global consensus at this point is that Los Angeles will play host to athletes from around the world in 11 years barring any last-minute setbacks.
Businesses on the contributor list include the Los Angeles Clippers, Los Angeles Dodgers, Universal Studios, Banc of California, Westfield Property Management and City National Bank parent company RBC Capital Markets, which each put in
LA 2024 spokesman Jeff Millman said there was no expectation of remuneration or of sponsorship deals as a result of the donations, noting the existing committee does not control such arrangements.
“The L.A. bid committee has no business relationships,” Millman said.
The landscape of opportunities could change once the bid transforms into an organizing committee, which would likely have a say in sponsorship deals, various contracts and other business arrangements.
Millman said it was premature to comment on how that process would play out.
Some perspective on L.A.’s 1984 Olympic Games is available to the current committee thanks to Barry Sanders. The retired Latham & Watkins partner is a member of the current body, and served as outside legal counsel to the ’84 organizing committee.
Sanders said once the shift to organizing happens there should be extraordinary caution on any deals they make. He said the 1984 Olympic organizing committee was able to avoid spending public money and stay under budget because it pressed vendors and sponsors on every cent.
That could be more difficult to do a second time around, however.
“Because we have the example of the 1984 Olympics in Los Angeles, which had a budget surplus, the organizing committee has to be very careful to not be taken advantage of by contractors,” he said. “They won’t be as likely to believe there isn’t more money, even if that’s the case.”
L.A.’s Olympic bid reminds Sanders of the run-up to the 1984 games.
The city’s bid to host in 1984 came directly after the disastrous 1976 Montreal Olympics, which were plagued by cost overruns. The international movement was already struggling with the after-effects of the murder of 11 Israeli athletes by terrorists who invaded the Olympic Village in Munich four years earlier.
A boycotted 1980 Summer Games in Moscow in the days of the Soviet Union preceded L.A.’s turn in the spotlight. The privately funded games were a financial success with future Major League Baseball Commissioner Peter Ueberroth at the helm, producing a surplus that helped fund youth sports programs in the area for decades.
The movement has stumbled from that highpoint lately. The most recent Olympic games in Rio de Janeiro; Sochi, Russia; and London all experienced huge cost overruns. While no major security breaches have occurred, Sanders said terrorism has been of constant concern at recent venues.
Such troubles have led to a significant downturn in cities interested in hosting both the 1984 and 2024 Olympics.
Los Angeles was essentially unopposed for the 1984 Olympics, while the 2024 campaign saw both Rome and Budapest drop out of the running early leaving Paris as the only competitor.
“This is certainly a case of déjà vu all over again, to use a famous sports quote,” Sanders said. “In 1984, there were no other bidders, so they had to select L.A. With fewer and fewer cities bidding, there was not only concern that 2024 was a thin field, but that future games would have difficulty attracting bids, too.”
However, Los Angeles is uniquely situated to avoid some of the pitfalls to which other host cities have fallen victim, according to Robert Kleinhenz, executive director of economic research at Century City-based Beacon Economics, who has worked to project the financial impact of the 2024 games for the bid committee.
“We hear time and time again about unsuccessful Olympic bids and how they can negatively impact a region, but that’s usually a product of facilities and infrastructure being built that doesn’t have uses after the games,” Kleinhenz said. “We don’t have to worry about that in L.A. because the games are timed nicely to infrastructure improvements already expected to be in place by 2024.”
Pushing the games back to 2028 likely wouldn’t create significant change from an economic perspective, he added.
“We would still be in a position as a region to derive significant economic benefit from the games in 2028 as opposed to 2024,” he said.
But Sanders said the organizing committee should keep the extended time line in consideration and not take anything for granted, even if the economic forecast wouldn’t be significantly altered.
“Any expectation about the financial climate so far ahead is extremely speculative,” he said. “The organizing committee needs to be cognizant of that.”
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