The International Olympic Organizing Committee (IOC) revealed Monday that Los Angeles had negotiated a financially lucrative deal to host the 2028 Summer Olympic Games.
As Breitbart News reported last month, the IOC judged Los Angeles and Paris to have equally strong bids to host the 2024 Summer Olympics. Instead of flipping a coin, the IOC said they would offer one city the right to host the 2024 Summer Games, and the other city would win the right to host the 2028 Sumer Games.
Paris claimed that it was only willing to host the 2024 Summer Games. So, according to the New York Times, the IOC negotiated a deal for Los Angeles to host the 2028 Summer Games by agreeing to advance $1.8 billion to the Los Angeles Organizing Committee, plus make another $180 million in compensatory payments for the four-year delay and $160 million to pre-fund local youth sports.
In a huge negotiated win for Los Angeles, the IOC also agreed to forfeit its standard 20 percent of any “surplus revenues,” generally called profit, generated by the local organizing committee after contingency funds were spent.
Giving up 20 percent of profits would normally be considered a joke, because every host city over the last 5 decades, except Los Angeles, has lost money, and some have gone bankrupt.
But Los Angeles’ bid to host the Summer Games was unique, because the L.A. 2024 Olympic Bid Committee claimed it did not need to build any new permanent venues to host the Summer Games. L.A. 2024 highlighted that Los Angeles made a $232.5 million profit hosting the 1984 Summer Olympics and estimated it would make hundreds of millions of dollars in surplus by selling $1.3 to $1.5 billion of Olympics and Paralympic Games tickets, plus booking at least $4.8 billion in advertising and sponsorship revenues.
Breitbart News reported that a recent study by Beacon Economics LLC and University of California Riverside predicted 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, if the city was awarded the 2024 Summer Olympics.
As the most media-savvy town on the planet, Los Angeles will also benefit from NBCUniversal 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.