CA hasn’t signed off on a promised deal to help bail out LA if the Olympic Games lose money

California lawmakers passed legislation in 2017 agreeing to cover up to $270 million of losses related to the Olympic Games after L.A. covers the first $270 million should a deficit occur. That legislation directed the governor to execute a contract solidifying the state's commitment.

But more than eight years later, that contract hasn't been inked by the governor's office.

The state's guarantee is of potentially huge importance to the city of Los Angeles, which took on a huge risk when it agreed to be the financial backstop for the Olympics in order to secure the host city bid. L.A.'s financial exposure is essentially unlimited. If LA28, the private nonprofit running the games, winds up with a deficit exceeding $540 million, the city is responsible for the rest.

When asked about the contract, the governor's office directed LAist to the California Department of Finance. Spokesperson H.D. Palmer said that the state is currently in talks with LA28 and the city of L.A. about contract language, but asserted there are no “sticking points.” He said only that working out contract language takes time.

LAist asked LA28 for more details on what's being discussed and when the contract would be finished.

"We engage regularly with our state partners on various Games planning items and look forward to continuing our strong partnership with the state and the city in the lead up to 2028 as we work to execute a fiscally responsible Games," Jacie Prieto Lopez, vice president of communication and public affairs at LA28, said in a statement.

Ilanna Morales, a spokesperson for L.A. Mayor Karen Bass, told LAist in a text message that the city was "confident that an agreement will be reached and that the 2028 Olympic and Paralympic Games will be a financial success."

The lack of a signed state contract could trigger alarm bells in city government, where some officials are already upset that another key contract remains unsigned. That is an agreement between Los Angeles and LA28 over compensating the city for extra services it will provide for the Olympics, such as police overtime. That contract was scheduled to be signed more than six months ago.

City officials say if that contract isn't airtight, it could leave L.A. with millions in unexpected costs. Referring to that unsigned contract, Councilmember Monica Rodriguez warned CEO Reynold Hoover in a public letter last week that the coming Olympics could "bankrupt" the city.