Despite many cities hosting the Olympics facing bankruptcy in the aftermath, a new study by Beacon Economics LLC and UC Riverside predicts that the Los Angeles area would see an $9.5 billion economic boost and generate $4.4 billion in worker earnings if the city is awarded the 2024 Summer Olympics.
Los Angeles, Paris and Budapest are the finalists to be awarded the 2024 Olympic Summer Games. The winning city will be picked in September, supposedly based on evaluations of the competing cities’ vision, governance, games delivery and venue funding.
L.A.’s bid is uniquely structured compared to the other finalist cities, because LA claims it does not need to build any new permanent venues. LA 2024 intends to rely solely on access to existing sports complexes in Los Angeles, Orange and Riverside counties.
The economic impact study was conducted by the UC Riverside’s School of Business Center for Economic Forecasting and Development to evaluate the viability of the L.A. 2024 Olympic Bid Committee (L.A. 2024) final proposal. According to their analysis, the City of Los Angeles will not lose money hosting the games and will generate additional tax revenues of between $152 million and $167 million, mostly from hotel transient occupancy taxes and incremental sales tax revenues.
The increase in economic output from the games will also generate the equivalent amount of between 74,308 and 79,307 full-time jobs.
But the City of Los Angeles will still be at risk for up to $6 billion in spending necessary to host the games. L.A. 2024 estimates it will make a surplus by selling $1.3 to $1.5 billion of Olympics and Paralympic Games tickets; plus taking in $4.8 billion in advertising and sponsorship revenue.
The competition to host an Olympic games comes after the 2016 Rio De Janeiro Olympic Summer Games that cost about Brazil about $4.6 billion to host and was filled with daily tales of corruption. Ten days after the final ceremonies, Brazil’s Senate convicted impeached President Dilma Rousseff by a vote of 61-20 for illegally using money from state banks to bankroll public spending on the Olympics and other boondoggles.
The 1976 Montreal Summer Olympics was predicted to cost to cost the host $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 economic flop left Montreal saddled with $1.5 billion in debt.
After the estimated cost of hosting the 2004 Athens Summer Olympics doubled to over $11 billion, Greece had to admit to the European Commission that it was entering a public debt crisis. Thirteen years later, Greece is still an economic basket case.
A confident Los Angeles Eric Garcetti claimed as the Rio Olympic scandal was raging in August: “In 1984, Los Angeles showed the world that a responsibly managed Olympic Games could add billions of dollars to the local economy and bring progress that could be felt for decades to come — and we’re ready to do that again in 2024.”