Organizers behind Los Angeles' plans for the 2024 Olympic Games released a budget Tuesday that predicts a $161 million surplus, but those numbers may be on the high side.
Victor Matheson, who studies economics at College of the Holy Cross in Massachusetts, reviewed L.A.'s draft bid and tells KPCC it may not be realistic, calling it "optimistic."
"You might liken it to a wedding. Weddings are extremely fun, these are great events that people like going to, but the father of the bride is not likely to make money on this," Matheson said. "It doesn't mean we should stop having weddings, but you should go into the wedding with your eyes open, knowing that you're probably going to be spending a bunch of money here for what turns out to be just a three-week party."
Matheson says the bid will run a surplus, but only if L.A. gets lucky on both cost and revenue. As an example of a line item where luck would be important, Matheson points to L.A.'s proposal to build an Olympic Village along the L.A. River. The projected total cost would be $1 billion — $925 million that would be private money, with only $75 million coming from the Olympic Committee.
“This is about a [$1] billion project that you're hoping someone is in the market for exactly that project and that was going to build it anyway, and is only asking for a little tiny bit from the Olympic Committee,” Matheson told KPCC.
Matheson says that this Olympics would have to outdo history to make its numbers.
"Most of the revenue numbers are on the high side of what we have experienced in recent Olympics," Matheson said, "so you'd have to have an Olympics that did significantly better than ones in the past — not something that's not achievable, but something you have to be lucky to do."
The proposal envisions events taking place across the region, from gymnastics at the downtown Staples Center to volleyball on Santa Monica Beach.
Matheson tells KPCC that filling stadiums for sports less popular in the host country can also be an issue.
“You can always fill a stadium for an Olympic games for something like team handball. The real question is whether you can fill it with people for team handball at $100 a pop, which is what you need to actually make the budget numbers work,” said Matheson. “No matter what country you are in the world, everyone’s had trouble making those numbers come together.”
The estimate comes about a month after the U.S. Olympic Committee cut ties with Boston, which was initially selected as the U.S. contender for the games.
A sticking point was possible cost overruns that would be picked up by taxpayers.
The USOC faces a Sept. 15 International Olympic Committee deadline to enter a bid.
L.A., which hosted the 1932 and 1984 Olympics, is viewed as the likely choice because its many existing venues would help keep costs low.
The Los Angeles plan projects spending $4.1 billion.
This story has been updated.