The California legislature is set to pass a bill to provide an “Olympic Games Trust Fund” bill that guarantees the Los Angeles Organizing Committee for the 2028 Olympic Games for up to $270 million in cost overruns.
With the California legislature about to recess on September 15, Senate President Pro Tem Kevin de León (D-Los Angeles) and Assembly Speaker Anthony Rendon (D-Paramount) used the “gut and amend” parliamentary procedure to flip AB 132 from a state “Election Code Appropriation Bill” to an “Act Relating to Public Contracts.”
The bill is almost identical to SB 1465, “2024 Olympic Games and Paralympic Games,” which passed the ;egislature last year and was signed by Governor Jerry Brown to provide a $250 million subsidy against losses from hosting the Olympics. The extra $20 million in this year’s bill was apparently added to cover four years of inflation.
AB 132 authorizes California’s governor to execute “support contracts” with the Olympic Host Committee regarding any potential deficits, so that the City of Los Angeles as the endorsing municipality is not at risk of financial loss.
Rather than calling the bill a subsidy or a guarantee, Senator de León is coined the name “Olympic Games Trust Fund.” The smokescreen is important, because most cities that host Olympic games tend to suffer huge financial losses.
The 1976 Montreal Summer Olympics was predicted to cost to just $125 million. When challenged on the cost, Mayor Jean Drapeau — famously confident in his management capabilities — declared: “The Olympics can no more have a deficit than a man can have a baby.” The epic economic flop left Montreal with $1.5 billion in debt.
The budgeted cost to host the 2004 Athens Summer Olympics was about $5 billion, but $6 billion in cost overruns caused Greece to sufferer a vicious debt crisis, and the nation is still an economic basket-case 13 years later.
The 2016 Rio De Janeiro Olympic Summer Games was tainted by corruption and resulted in an $879 million cost overrun. Ten days after final ceremonies, Brazil’s Senate convicted and impeached President Dilma Rousseff by a vote of 61-20 for illegally using state bank money to bankroll crony Olympic public spending and other boondoggles.
Breitbart News reported that since the Los Angeles Organizing Committee does not intend to build any major new venues, L.A. could make another big profit by hosting the 2028 Summer Olympics, like the $232.5 million that the city pocketed from hosting the 1984 Games.
A joint feasibility study by Beacon Economics LLC and University of California Riverside forecasts that Los Angeles could see a $9.5 billion economic boost, including $4.4 billion in worker earnings and over $152 million in additional tax revenues.
As the most media-savvy town on the planet, Los Angeles will also benefit from NBC Universal acquiring the exclusive broadcast rights for all Olympic events held between 2022 and 2032 for $7.75 billion.
The City of Los Angeles was supposed to be at risk for $6 billion in spending necessary to host the 2024 Summer Olympic Games, but the IOC payments to accept hosting the 2028 Summer Games will now drastically reduce any risk of financial loss to the city.