There\u2019s a good chance that the most exciting event in the 2028 Summer Olympics will be the race out of Los Angeles when taxpayers find out how much they\u2019ll have to pay for it.<\/p>\n
Despite all the assurances that the Games will be privately financed at \u201czero cost\u201d to the city, there\u2019s an unfortunate word that keeps showing up in reports of the city\u2019s hosting agreement: \u201cguarantor.\u201d<\/p>\n
The Merriam-Webster dictionary defines \u201cguarantor\u201d as \u201cone that promises to answer for the payment of a debt or performance of a duty in case of the other\u2019s default or failure to perform.\u201d<\/p>\n
Used in a sentence, \u201cThe city of Los Angeles is the ultimate financial guarantor of the 2028 Olympic and Paralympic Games if the LA28 Organizing Committee\u2019s private revenue from sponsorships, ticket sales and other sources is insufficient to cover costs.\u201d<\/p>\n
Hosting the Olympics is like inviting a carload of celebrities to stay at your house for a month, all expenses paid, in the hope of selling the TV rights for a reality show called \u201cHigh-Living Houseguests.\u201d It might work out. Or you might spend the rest of your life paying off the bills for make-up, wardrobe and catering.<\/p>\n
You may remember that Boston was originally selected as the U.S. city bidding for the Games, until the people of that city screamed about getting stuck with the bill. Boston dropped out, and L.A. came back into the bidding process. The International Olympic Committee selected Paris to host the 2024 Games, and Los Angeles \u201cwon\u201d 2028.<\/p>\n
LA28\u2019s budget is in the neighborhood of $7 billion. If revenue falls short, the city of Los Angeles is on the hook to cover the first $270 million of the deficit. Then the state of California is in for $270 million. When that\u2019s exhausted, the rest of the costs fall on the taxpayers of Los Angeles. That\u2019s what the host city contract requires \u2013 the host city is the unlimited financial backstop.<\/p>\n
Although taxpayers are financially responsible for the Games, elected officials have little to no control over Olympics planning. The federal government has agreed to spend $1 billion on security, but it\u2019s unclear if Los Angeles will receive any of that money directly. LA28 is required to have enough insurance to cover disasters. We\u2019ll see how that goes.<\/p>\n
To protect the city against extra costs from city services related to hosting the Games, LA28 was required to negotiate an Enhanced City Resources Master Agreement (ECRMA) by last October. The long-awaited agreement finally is ready for approval by the City Council and the mayor.<\/p>\n
According to the tentative ECRMA, the city will provide LA28 with a final cost estimate for enhanced services by October 31, 2027, and LA28 will make payments to the city at the start of each month of reimbursable services. The final bill will be presented to LA28 on December 1, 2028. If LA28 ends the Games with a surplus, the city has the right to audit it.<\/p>\n
Other venue cities still have to reach their own agreements with LA28, though only Los Angeles is a guarantor. After LA28 reaches agreements with cities including Anaheim, Inglewood, Pasadena and Long Beach, it will have to finalize agreements for services at competition sites. One city that won\u2019t be in the conversation is Santa Monica. City officials there decided not to host beach volleyball after getting a look at the extra costs the city would bear and the negative effects of Olympics-related restrictions on local businesses.<\/p>\n
At least this much is done: the city of Los Angeles finally has a tentative agreement to estimate its costs for extra services such as trash pick-up and traffic control, and to bill LA28 for it.<\/p>\n
Security costs are another question. Los Angeles City Administrative Officer Matt Szabo said Los Angeles will try to get federal reimbursement for police protection at Olympics venues, and if that doesn\u2019t cover it, the city will charge LA28\u2019s contingency fund.<\/p>\n
It\u2019s only a problem if the Games lose money and the taxpayers of Los Angeles are left with the bills.<\/p>\n
Good luck collecting from the empty offices formerly occupied by LA28\u2019s \u201cHigh-Living Houseguests.\u201d The contract doesn\u2019t even allow us to sell the TV rights.<\/p>\n
Write Susan@SusanShelley.com and follow her on X @Susan_Shelley<\/p>\n","protected":false},"excerpt":{"rendered":"There\u2019s a good chance that the most exciting event in the 2028 Summer Olympics will be the race…\n","protected":false},"author":3,"featured_media":906282,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5123],"tags":[1582,276,2961,224,5337,1269,16837],"class_list":["post-906281","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-ca","tag-california","tag-la","tag-los-angeles","tag-losangeles","tag-opinion","tag-opinion-columnists"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116846907289383258","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/906281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=906281"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/906281\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/906282"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=906281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=906281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=906281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}