The Los Angeles City Council on Friday morning is expected to vote unanimously to authorize Mayor Eric Garcetti to sign a Host City Contract with the International Olympic Committee in which the city agrees to host the 2028 Olympic Games and guarantees that it will cover any potential financial shortfall from those Games.
The vote comes against the backdrop of the IOC agreeing to a record payout and financial concessions to a host city that could exceed $2.5 billion and concerns about the uncertainty of hosting Games still 11 years away.
In addition to the global and domestic financial and political uncertainty, the council vote will also take place with the budget from Los Angeles 2028, the local organizing committee, still a work in progress and a council-mandated validation of that budget by the accounting firm KPMG perhaps 18 months away.
City, LA 2028 officials and bid supporters said any concerns are offset by the similarity between plans for the privately financed 2028 Games and a bid for the 2024 Olympics that came with a balanced $5.3 billion budget, the region’s wealth of existing Olympic-caliber venues and a memorandum of understanding between the city, LA 2028 and the U.S. Olympic Committee that gives the council a role in the planning of the 2028 Games and the city protection against an unexpected financial deficit.
The memorandum is also expected to be approved by the council Friday, as is a tripartite agreement between LA 2028, Paris 2024 and the IOC in which Paris agrees to host the 2024 Games.
“Clearly I see a sweetheart deal that we could not pass up,” council member Bob Blumenfield said.
Olympic historians, economists, members of previous U.S. Olympic bids, sport business analysts and community activists, however, are not as certain.
While acknowledging the strength of Los Angeles bid, considered by many in the Olympic movement as the strongest Games bid in history, the absence of a validated budget and adding four years to the normal seven years between the IOC selecting host cities and the actual Games add further uncertainty to an endeavor that has historically resulted in financial catastrophe, the longtime IOC observers said.
Six of the last nine Olympic Games, and four of the last five Olympic Games where financial data is available, were left with a deficit or showed no profit. Athens lost $14.5 billion on the 2004 Summer Games. The 2000 Games in Sydney were left with a $2.1 billion deficit.
“There have got to be some…