Business & Economy

Could a 2024 LA Olympics be as successful as the '84 games?

Joan Benoit wins the first women''s Olympic marathon during the 1984 Olympics at the Coliseum.
Joan Benoit wins the first women''s Olympic marathon during the 1984 Olympics at the Coliseum.
Tony Duffy/Getty Images

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Los Angeles’ Olympic bid committee, LA2024, has less than two years to convince international organizers that L.A. is the best place host the 2024 Games.

The essence of their pitch is that the city can recreate the success of the 1984 Olympics, the last Games to generate a profit.

“Forgive me for using a Hollywood analogy, but in a very real way, our bid is the 'Back to the Future' bid of this campaign,” said Casey Wasserman, chair of LA2024. 

If there’s one thing we know about sequels though, it’s that they’re rarely as good as the original.

Zev Yaroslavsky, a former Los Angeles County Supervisor who served on the Los Angeles city council during negotiations for the 1984 Games, said he's worried about the financials for a 2024 Los Angeles Olympics.

"For me, this is the greatest sporting event in the world, but I'm not willing to put the full faith and credit of the city behind it," said Yaroslavsky. "It's not that important."

In '84, driving a hard bargain with international organizers

When L.A. was negotiating its last Olympic contract in 1978, the financially disastrous Montreal Games, held just two years earlier, were fresh in people’s minds. It took Montreal taxpayers three decades to pay off the debt from the Games – a billion and half dollars.

L.A. voters wanted nothing of the sort, so they passed a charter amendment banning taxpayer dollars from being used. When the International Olympic Committee [IOC] still wanted a taxpayer backstop, Mayor Tom Bradley called their bluff.

“He actually sent a message to the L.A. City Council asking the city council to pull the plug on the bid," said Yaroslavsky.

Yaroslavsky says Bradley’s gambit worked: The U.S. Olympic Committee took on all the risk while L.A. controlled the rewards, which was the revenue.

It certainly helped that L.A. was the only bidder for the Games.  Tehran had dropped out because of the Iranian Revolution. 

“We were in a much stronger position then,” said Yaroslavsky.

This time, L.A. is competing against a who’s who of European capitals: Paris, Rome, Hamburg, and Budapest. 

“They’re gonna play cities off against each other," said Yaroslavsky. "You can already see it coming.”

For the 1984 Games, the L.A. Olympic committee signed a $225 million TV contract with ABC, worth more than every previous Olympic broadcast deal combined. They also got multimillion sponsorships from Coca-Cola and Fuji Film.

"It was the first time in the history of the Games that it had been put on by the private sector," Anita DeFrantz, senior U.S. member of the International Olympics Committee and President of LA84 Foundation, told Airtalk last year.  

As it turned out, L.A. might have been a little too successful, because after 1984, the IOC took control away from host committees.

“They’re not idiots," said Yaroslavsky. "They said, 'never again. From now on, we’ll negotiate the television rights and figure out how to apportion the revenues.'”

Olympic village a 'major uncertainty'

Los Angeles Mayor Eric Garcetti has already said L.A. has no choice but to sign a financial guarantee - the IOC requires it. He insists taxpayers don’t need to worry though, because the Games would generate a surplus. However, Andrew Zimbalist, a sports economist at Smith College and author of the upcoming book, Circus Maximus: The Economic Gamble Behind Hosting the Olympics and World Cup, says there is always a considerable financial risk involved with hosting the Games.

“The major uncertainty in my mind about the financial outcome is what L.A. is going to do about its Olympic Village,” said Zimbalist.

During the ’84 Olympics, athletes simply bunked in USC and UCLA dorms. Since then, villages have become more like a mini-town – with entertainment, dining, and training facilities.

LA2024 is considering a dozen different sites where it would partner with a private developer to build housing and other amenities from scratch.

The one that has received the most attention is a Union Pacific Railroad yard near the L.A. River that is a crucial hub for regional freight traffic. Among other problems, Union Pacific has shown little inclination it wants to sell the land. LA2024 has budgeted a billion dollars for an Olympics village, but Zimbalist says that seems very low.

“London spent well over $2 billion on its London Village at the end of the day," said Zimbalist. "It was originally going to be less than that. Tokyo is now budgeting over $3 billion.”

LA2024 emphasizes the village is one of the few projects it would build specifically for the Olympics; 85 percent of venues are already built or would have been built anyways.

"LA2024 will maximize existing facilities, reducing both cost and risk," said Wasserman.

The Los Angeles Memorial Coliseum would host track and field and the opening and closing ceremonies. Gymnastics and the basketball finals would be at Staples Center, while soccer would be played at the Rose Bowl.

“Olympics can be very successful financially if you use existing venues,” said Barry Sanders, a board member at 2024 and chairman of the Southern California Committee for the Olympic Games.

He says it’s a good thing local organizers don’t have to worry about selling TV rights or big sponsorships because instead they get a $1.7 billion check from the IOC and more money from the federal government for security.

“Not only do we get more money now than we did then, but we know we’re going to get it,” said Sanders.

The Olympics have become bigger and more expensive since 1984, but Sanders says L.A. is still the perfect host for an austere Olympics.

“Absolutely I think the success of 1984 can be replicated," said Sanders. "I think it will be replicated if we have the Games here.”

A legacy of funding community programs

The 1984 games were so successful that they made $250 million in profit that still funds activities for needy kids all over Southern California through the LA84 Foundation. 

Some of the beneficiaries are Naomi Lewis’ third grade class at Field Elementary in Pasadena, who took swim lessons on a recent morning at the Rose Bowl Aquatic Center.

“I’ve seen so much progress," said Lewis, standing next to her students splashing around in the Olympic sized pool. "I saw kids that couldn’t swim and now go off the diving board.”

A legacy of helping the community – rather than draining municipal coffers – is rare when you look at many Olympic Games in the modern era. But L.A.'s Olympic boosters say it’s not a coincidence that both times the city has played host – in ’84 and 1932 – the games ended in the black.

To hear more about the similarities and differences between the 1984 Games and a future 2024 Games, join Airtalk's Larry Mantle at special event this week.