State Analyst Reports LA 2024 “Low Risk”, But City Remains “Primary Financial Guarantor”

The Los Angeles bid to host the Olympic and Paralympic Games in 2024 received another glowing report from the California State Legislative Analyst’s Office (LAO), a follow up from the initial report filed last November that commended the plans as “fairly low risk” for the city and the state.

LA 2024 has proposed an unprecedented two-stadium Opening Ceremony concept leveraging iconic LA Memorial Coliseum and new NFL stadium (LA 2024 depiction)

LA 2024 has proposed an unprecedented two-stadium Opening Ceremony concept leveraging iconic LA Memorial Coliseum and new NFL stadium (LA 2024 depiction)

The latest report released Thursday comprehends further updates provided by LA 2024 including details from the phase 3 bid book submitted in February, updated budget details and revised plans including the two-stadium Opening Ceremony concept.

“Basing its bid on existing or already-on-track venues and infrastructure reduces the chance that cost overruns will occur,” the report explained.

The report continued to echo the bid’s general narrative suggesting that “more broadly, if Los Angeles 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.”

But analysts warn that the project isn’t completely without 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 officials could push LA 2024 to make additional, costly improvements at one or more sites.”

Changes could be requested along the way by the International Olympic Committee (IOC) based on decision-making over the course of the seven year organization.  Additional events may be added to the program, but these will be identified by the organizing committee and will likely be for sports that can be easily accommodated in existing facilities.

The report also raised concerns over the overly-optimistic ticket sales projection of 97 per cent, a figure based on a model from the London 2012 Games.  Though reduced sales could burden the budget – tests revealed that the offset would be minimal.

The report attributed further risk to “organizational, financial, logistic, and security challenges far beyond other events hosted by large cities.”

“If Los Angeles is selected,” the report explained, “hundreds of millions of state tax dollars will be on the line, and the City of Los Angeles will have much more on the line as the primary financial guarantor for the Games.”

LA 2024 CEO Gene Sykes responded to the report Thursday saying “we appreciate the California State Legislative Office’s independent review of our bid, which expresses confidence in our work to ‘greatly reduce the financial risks that have plagued prior Olympics.'”

The LA 2024 Olympic Bid Long Beach Sports Park (LA 2024 Illustration)

The LA 2024 Olympic Bid Long Beach Sports Park (LA 2024 Illustration)

The report further recommended close coordination between government entities in order to ensure success.

“At the state level,” it said, “the Legislature, with its ability to provide oversight to state departments, can play a constructive role in helping the Games and keeping its financial risks low.”

Last week International Olympic Committee (IOC) President Thomas Bach said the possibility of awarding the 2024 and 2028 Games to both Los Angeles and rival bid Paris later this year remains on the table, though both bids have said that they are only interested in 2024 at this time.

The LAO report and its analysis seemed geared to 2024 as well.

The IOC is set to elect the winner at an all member’s session September 13 in Lima, Peru.

Robert Livingstone

About Robert Livingstone

Robert Livingstone is a senior editor, award-winning journalist and author, covering Olympic bid business as founder of GamesBids.com as well as providing freelance support for print and Web publications around the world. He is a member of the Olympic Journalists Association and the International Society of Olympic Historians. Follow him @enotsgnivil