LA 2024 Releases $5.3B Budget; No New Stadiums Needed
📅 Tue December 27, 2016 - West Edition #26
LOS ANGELES (AP) The Los Angeles bid committee for the 2024 Olympics released details of a nearly unheard-of budget plan, insisting $5.3 billion will be enough to cover both operational and infrastructure costs for an Olympics that won't need any new, permanent stadiums.
The cost would be less than half that of the recently completed Rio Games and about a quarter of Tokyo's ballooning budget for the 2020 Olympics.
It also defies convention in the Olympic bidding business, in which cities traditionally deal with two figures — one for operational costs and one for “non-Olympics” costs that cover capital and infrastructure.
Bid officials say they can do this because more than 30 venues already exist in the L.A. area and those that don't will be built as temporary structures. The bid folded in $1.2 billion for infrastructure, which would primarily be used for temporary venues and to bring existing ones up to Olympic standards.
“If LA is chosen to host the 2024 Games, the IOC does not have to worry about changing or evolving budgets, shifting competition venues or uncertainty about the delivery of the Games,” bid chairman Casey Wasserman said.
Los Angeles is going against Paris and Budapest, Hungary. Preliminary figures for Paris called for an infrastructure budget of $4.5 billion and operational costs of $4.8 billion, with 95 percent of the city's proposed venues either temporary or already in existence. The next deadline for cities to submit candidate files, which will include updated budget figures, is Feb. 3. The games will be awarded next September.
Gone from Los Angeles' budget was a one-time projected surplus of $161 million. In its place is a $491 million contingency fund that would cover cost overruns.
Wasserman said all the figures are conservative and the numbers come in low because no major construction projects are needed. Los Angeles has already committed to more than $200 billion in transit and airport projects, regardless of whether it wins the Olympic bid. Often, projects such as those get approved in conjunction with an Olympic bid.
In providing a $5.3 billion budget, Los Angeles is playing to the International Olympic Committee's attempt to keep costs — and building — in check; decades of runaway spending have greatly reduced interest in hosting.
Rio de Janeiro is expected to come in with a bill of between $10 billion and $12 billion for its recently completed Olympics.
Meanwhile, Los Angeles released its figures only hours after an IOC vice president called Tokyo's $20 billion budget unacceptable. A government panel in Japan has said costs could reach $30 billion, more than four times the initial estimate.
Wasserman said the IOC will not be surprised when it sees all items wrapped into a single L.A. budget.
“The process has been very open and transparent,” he said.
The budget was independently reviewed by the accounting firm KPMG, which concluded LA's budget was “substantially reasonable.” A few quibbles: Bid organizers may have been slightly optimistic about revenue they'll produce from ticket sales; and no inflation index has been developed to measure costs in 2024 dollars, though one is expected later this month.
The bid's top revenue sources are domestic sponsorship ($1.93 billion), ticketing ($1.47 billion) and IOC contributions from broadcasting ($855 million) and sponsorship ($453 million).