Menu
Download the app

SBJ subscribers – Enhance your experience with the revamped iOS app

Olympics

Economist: L.A. far different bid city than Boston

The successful Games of 1984 give Los Angeles a good feeling for the Olympics, Zimbalist says.
Photo by: GETTY IMAGES
The U.S. Olympic Committee last week said it intends to move forward on a possible Los Angeles bid for the 2024 Summer Games, more than likely replacing Boston as the first American bid since 2009.

Many of the problems that plagued the Boston bid from the start ­— controversial venue plans, ambivalence from politicians and bad opinion polling ­— appear not to be an issue in Los Angeles. The USOC says an August poll found 81 percent support for a bid among city residents, and Mayor Eric Garcetti said he would sign the host-city contract backstopping cost overruns.

The USOC has until Sept. 15 to make a final decision. Los Angeles has proposed a $4.1 billion budget with a $500 million contingency.

We discussed Los Angeles as an Olympic city with Andrew Zimbalist, a Smith College economist who wrote “Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup,” and who was a leading critic of Boston’s effort.

What are the key differences between the bids?
ZIMBALIST:
The two principle differences are, No. 1, that Los Angeles has permanent physical venues for most of the roughly 33 required sports facilities, and Boston was going to have all temporary facilities. They were going to be able to use some things like the Boston Garden, but virtually everything needed to be built and the Boston budget had, for instance, only $150 million allocated to build a temporary Olympic stadium with 69,000 seats.

Another thing that’s different about the two cities: Los Angeles is much larger, in terms of population and in terms of economic resources. There’s a good chance there’s going to be a deficit and cost overruns, and to the extent the city is signing the financial backstop, which they’re obligated to according to [International Olympic Committee] rules, Los Angeles would be better able to cover that than Boston. Because of that, there’s likely to be a little bit less concern.
 
Do you think there’s an intrinsic difference between Bostonians and Los Angelenos’ attitudes toward risk and public spending?
ZIMBALIST:
I think the main thing for Massachusetts residents and Bostonians was the experience of the “Big Dig.” So Bostonians and actually generally residents of Massachusetts are very leery about initial budgets and had experience firsthand with cost overruns. What happened in London was the initial plan was to spend $5 billion; it was supposed to be private money. They ended up spending $18 billion, and 80 to 90 percent of that was public money. With regard to Los Angeles, it’s a larger budget there. They have more resources, but they also have more social problems than Boston does. They have more low-income communities with more experience of unrest in those communities than Boston has had. And I would think that Mayor Garcetti would be very sensitive to and careful about spending public money that didn’t necessarily lead to any economic gain for the city.

Garcetti said he’d guarantee cost overruns. That’s a fundamental objection you have to the Olympics, the downside risk to public budgets?
ZIMBALIST:
Yes, that’s right. They’re talking about — I can’t remember the exact number — a $200 [million] or $400 million surplus, or a $200 [million] to $250 million contingency fund. All I would say to that is if you consider what happened in London … or you consider every single Games for which we’ve had financial records, there’s been a cost overrun since 1960. Whether it’s $400 million or $600 million in contingency, when you’re looking at potential overruns in the billions, it can’t be very reassuring to any rational assessment of it.

Bottom line, what is your assessment of a Los Angeles bid?
ZIMBALIST:
First of all, it’s got more wisdom behind it than a Boston bid, but secondly, before I pronounce myself definitively one way or another, I’d like to see the details of the plan. …

No. 1, they’ve got virtually all of the venues there. … And No. 2, the amount of land they have available to them is far greater than it was in Boston, and No. 3, the financial resources they have are far greater. The L.A. city budget is 3.5 times as large as Boston’s, but L.A. also has a number of businesses that generate billions of dollars over and above the general fund, and Los Angeles County has about another $27 billion in its budget. Overall, they’re looking at financial resources of local government revenues that are close to $50 billion, relative to Boston’s budget of $2.7 billion. On top of this, the support level and the enthusiasm in Los Angeles is much greater because of the success they had in 1984.

All of those things together, with more realistic budgeting, I think gives them a fair shot. There’s still a lot of risk involved. It’s still my belief, and I think it’s their belief, that there is not really any economic gain here. It’s for the psyche of Angelenos, it’s a project to make them feel good and to offer them something that’s exciting and enjoyable. If they’re not selling this as a great economic boon but they’re selling this as, “Look, this is a fun project we can do in a reasonable way, or at least it’s likely we can do it in a reasonable way.” And if Angelenos look at this and say, “OK, that’s good by us,” then that’s fine.

SBJ Morning Buzzcast: March 25, 2024

NFL meeting preview; MLB's opening week ad effort and remembering Peter Angelos.

Big Get Jay Wright, March Madness is upon us and ESPN locks up CFP

On this week’s pod, our Big Get is CBS Sports college basketball analyst Jay Wright. The NCAA Championship-winning coach shares his insight with SBJ’s Austin Karp on key hoops issues and why being well dressed is an important part of his success. Also on the show, Poynter Institute senior writer Tom Jones shares who he has up and who is down in sports media. Later, SBJ’s Ben Portnoy talks the latest on ESPN’s CFP extension and who CBS, TNT Sports and ESPN need to make deep runs in the men’s and women's NCAA basketball tournaments.

SBJ I Factor: Nana-Yaw Asamoah

SBJ I Factor features an interview with AMB Sports and Entertainment Chief Commercial Office Nana-Yaw Asamoah. Asamoah, who moved over to AMBSE last year after 14 years at the NFL, talks with SBJ’s Ben Fischer about how his role model parents and older sisters pushed him to shrive, how the power of lifelong learning fuels successful people, and why AMBSE was an opportunity he could not pass up. Asamoah is 2021 SBJ Forty Under 40 honoree. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine’s awards.

Shareable URL copied to clipboard!

https://www.sportsbusinessjournal.com/Journal/Issues/2015/08/17/Olympics/LA-2024.aspx

Sorry, something went wrong with the copy but here is the link for you.

https://www.sportsbusinessjournal.com/Journal/Issues/2015/08/17/Olympics/LA-2024.aspx

CLOSE