Ticket sales may minimize LA28 public budget impact
LA28 finances growing, with city responsible for hypothetical Games losses...and the state too, depending on gubernatorial decisions
The 2028 Olympic and Paralympic Games, hosted pursuant to an International Olympic Committee (IOC) contract with the City of Los Angeles, are poised to be the modern world’s largest non-military event. They will host about 15,000 athletes and include around 15 million ticketed seats for residents and visitors. The Games should boost Southern California’s economy temporarily. Perhaps most importantly, they should be a fun event that leaves athletes, visitors, and residents with positive memories.
I am an Olympic expert and a California state budget expert, so I am asked how the Games will affect the state. These questions have greater resonance as millions—including me—try to purchase tickets during LA28’s first ticket draw. Tickets are a major revenue source for the private LA28 organizing committee, with LA28 ticket prices reportedly 17% higher than those of Paris in 2024. Out-of-state ticket purchases, corporate sponsorships, and IOC contributions to LA28—as well as money spent by visitors in the state’s economy—essentially are Los Angeles exports to the rest of the U.S. and the world.
TLDR: My Key Points.
LA28 much less risky for public budgets than many prior games: not funding costly new “white elephant” venues or infrastructure just to host the Games.
LA28 finances growing, with strong chance it will turn a profit, as the 1932 and 1984 Los Angeles Games both did.
Funding for transit a bigger issue than imagined a decade ago, with calls for more federal help on that front.
City of Los Angeles—still discussing how to allocate public services costs with LA28—is already on the hook for hypothetical LA28 losses, although the state potentially could support some of those losses under a 2017 law.
State budget risk has remained relatively low, but transit issues have increased risks marginally in recent years.
Federal government very important for U.S. Olympic and Paralympic hosts. Has appropriated funding for security costs, but anxiety exists about future actions.
State and Local Fiscal Risks. Big ticket sales are among the funding needed to minimize public subsidies of LA28. Pursuant to its IOC contract, the City of Los Angeles is on the hook for LA28 losses if they occur (that is, financial losses in LA28’s delivery of sports and related events at Olympic and Paralympic venues in the region, Oklahoma City, and other locations). The state may have to pay up to $270 million of those hypothetical city costs if Governor Newsom or his successor chooses to execute a Games Support Contract under a state law passed in 2017.
Even assuming no losses for LA28, state or local public service costs for the Games could still prove substantial: for example, if the federal government provides no more funding for temporary transit costs to move visitors around the region during the Games. (Those transit costs are greater than assumed when I reviewed the Olympic and Paralympic bid at the LAO in 2016 and 2017.) For Los Angeles, an agreement with LA28 on how to address municipal costs related to the Games remains unresolved, and a recent city decision to expand its convention center, a key 2028 venue, has been called risky.
Federal Government Has Key Role. The U.S. is unusual in that states or municipalities contract with the IOC to host the Games. In other host countries, national governments often have a more prominent role with the IOC contract. Nevertheless, as I wrote in 2017, the federal government always plays a big role when a U.S. city hosts the Olympic and Paralympic Games. The big security apparatus at a Super Bowl or a party presidential convention—with big involvement by federal homeland security and other departments—is known by many. The Games, however, are equivalent to running many Super Bowls or World Cup matches daily in one metropolitan area over a few weeks. Based on past precedent going back to 1960, planning for 2028 has always assumed major federal involvement, including federal funding for security and transit. The current federal administration has been supportive of LA28, with a $1 billion appropriation for security grants, some transit funding, State Department efforts to ensure visa availability for the Games and prior qualifying events, more proposed funding this year for federal security agencies, and a presidential order “to ensure maximum safety, secure borders, and world-class transportation” for the Games. Despite this federal support, many remain anxious about how federal actions here and abroad will affect Los Angeles during and before the Games.
State and Local Fiscal Opportunities. On the positive side, LA28 seems—from the limited data available—to be making good progress in meeting its financial goals, reducing the chances of LA28 losses in executing its Games plan. If LA28 turns a profit after paying all of its costs—including required payments to local municipalities for their services—most profits are expected to support youth sports development, adding to prior LA28 and IOC funding of the PlayLA program and the 1984 Games’ endowment of the LA84 Foundation. The Games will produce a net economic boost for the state and increase state and local tax revenues temporarily. (Estimates of state tax gains—which will be modest compared to the overall state budget—are expected in future months.) This will help cover public service costs resulting from the huge event. LA28, with local leaders, has announced local and small business procurement goals, which will benefit some local businesses.
Avoiding New Infrastructure Costs Has Been Key to the Plan. Unlike other Olympic and Paralympic hosts, LA28’s plan over the past decade has been to avoid construction of costly new permanent venues—relying instead on existing and temporary venues—and use existing and already-funded transportation and housing infrastructure. While the state has boosted investment in Los Angeles infrastructure in recent years, it has rejected proposals to fund new infrastructure specifically tied to the Games, consistent with LA28’s plan for a “no build” Games. (Moreover, unlike Paris with the 2024 Games, Los Angeles rejected proposals to fund big new housing projects as part of the bid process a decade ago, relying instead on UCLA housing facilities for the main Olympic and Paralympic athletes’ village.)
Currently, however, several requests for new state funding are under consideration, such as $96.5 million to upgrade state-owned Exposition Park—in part to improve its ability “to activate all areas within the Park safely” for the Games—and $379 million for LA Metro to complement requested federal transit funding for the Games. The avoidance of new venue and infrastructure costs to date—so often a major issue for Olympic host cities—has kept state budget risk related to the Games “relatively low” to date, consistent with the view of me and my LAO colleagues in 2016. That being said, transit funding pressures are among those that have increased the Games’ fiscal risks for the state marginally in recent years.
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State Government Role. Last year, I described the various legislative and budget actions taken to date by the state government to support the 2028 Games. More such actions are likely between now and the formal start of the Games on July 14, 2028. In 1984, the state’s Department of Finance projected that the Olympic Games in Los Angeles generated $52 million of added state revenue, more than covering over $21 million in identified state costs to support the Games. State departments with costs related to the 1984 Games included the California Highway Patrol, the Military Department (National Guard), Caltrans, and the Office of Emergency Services (CalOES), among others. As noted in my post last year, several state departments already are involved in various LA28 activities.
California’s Olympic and Paralympic History. California hosted the 1932 and 1984 Olympic Games, both of which generated profits. It also hosted the 1960 Olympic Winter Games at the resort now called Palisades Tahoe in Placer County, and the state paid directly for many costs of that event. (I was the principal author of an LAO report that summarized this history in 2016, and I published an article on the finances of the 1960 Games in the Journal of Olympic History last year.) California’s fourth Olympics and first Paralympics in 2028 will add to this history.
Links to State Legislative Hearings on LA28. Senate and Assembly committees chaired by Sen. Ben Allen (D-Pacific Palisades) and Asm. Tina McKinnor (D-Inglewood) have met to discuss preparations for LA28. Those hearings are archived here and here and here.