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CA hasn’t signed off on a promised deal to help bail out LA if the Olympic Games lose money
A Team USA Athlete greets Governor Gavin Newsom as the flag returns to Los Angeles for the first time in 40 years at LAX airport on Aug. 12, 2024.
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'Astronomical' LA28 Olympics ticket prices have shocked fans. But could a more expensive games benefit taxpayers?
LAist Olympics reporter Libby Rainey joins the Imperfect Paradise podcast to discuss why Olympics ticket prices are so expensive, what they can tell us about the money behind the games and who might stand to benefit – or lose – from the Olympics coming to LA.
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.
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Some competitions are scheduled around the summer heat. -
The city's financial exposure is essentially unlimited in the event of budget overruns. -
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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.
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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.
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You come to LAist because you want independent reporting and trustworthy local information. Our nonprofit newsroom doesn’t answer to shareholders looking to turn a profit. Instead, we answer to you and our communities. We are free to follow facts wherever they lead and to hold power to account without fear or favor. Our only loyalty is to our readers and listeners and our mission: to inform, engage, and strengthen Southern California’s communities.
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