Angelenos have waited 33 years for the Summer Olympics to return to their city. On Monday night, they received word that they’ll only have to wait 11 more. In an unusual decision, the International Olympic Committee announced that Los Angeles had agreed to host the 2028 Olympics, ceding the 2024 games to rival bidder Paris. The joint award - the first in Olympic history - will be made official at an IOC meeting in Lima later this month.
Given their druthers, Olympic commissars wouldn’t necessarily have chosen this particular solution. But skyrocketing costs have scared off many major cities from even bidding on the games. Picking Los Angeles - with its existing stock of Olympic-class sports facilities - at least guaranteed the competition a home in 2028. And there’s a good argument to be made that that home should be permanent.
One way to think of the modern Olympics is as a giant urban infrastructure project. So, in addition to stadiums, pools, velodromes and other sports venues (many unlikely to be used again), preparing for the games also typically requires investments in mass transit, pedestrian paths and even housing.
Such massive projects are virtually guaranteed to go over budget: Every Olympics since 1960 has incurred cost overruns - half of them of 100 percent or more. In Tokyo, home of the 2020 Olympics, estimated costs recently hit $12.6 billion, almost double the original budget, and there’s still three years to go. The $1.5 billion in debt that Montreal ran up to build infrastructure for the 1976 games, including an Olympic stadium that locals affectionately refer to as “The Big Owe,” was only paid off in November 2006. In Athens, home of the 2004 games, some analysts blame the Olympics and its costs for bringing on the Greek debt crisis. And, as recently as April, organizers in 2016 host Rio de Janeiro were trying to pay off outstanding debts with used air conditioners and other secondhand goods. The IOC has declined requests for help.
Not surprisingly, all that red ink has begun to shrink the pool of bidders. In 2014, both Oslo and Stockholm backed off bids for the 2022 Winter Olympics due to high costs and popular opposition. The IOC, which allegedly wanted the games to return to Europe, was left to choose between Almaty, Kazakhstan and snowless Beijing. In a very close vote, Beijing won largely on its success in hosting the $40 billion 2008 games - hardly a welcoming signal to countries considering future bids.
The IOC isn’t oblivious to the problem. In late 2014 it enacted Olympic Agenda 2020, a 40-point reform program designed to lower the costs of bidding for and hosting the Olympics. Provisions include promoting the use of existing or temporary venues, and allowing host cities to move events to another city or neighboring country for reasons of “sustainability” or geography. Budapest announced a bid for the 2024 Olympics, in part hoping to take advantage of Agenda 2020. But concerns over yes — cost-overruns and corruption forced the city to withdraw.
That left two bidders. Los Angeles, which entered the competition after Boston backed out over swelling cost estimates, and Paris. Despite a late start, Los Angeles was a powerful candidate thanks to its suite of existing Olympic-quality venues and an entrepreneurial spirit that turned the 1984 Olympics into a profit-making machine.
Those same virtues argue for at least considering making the city a permanent home for the Games. The arguments in favor of one are hard to refute. It would eliminate the spiraling costs associated with the building of expensive Olympic stadiums and other sporting infrastructure that will never be fully utilized again, not to mention the costs of flattering IOC judges. Los Angeles in particular, which has held two Olympics, boasts a thriving professional and collegiate sports scene as well as an entertainment industry that’s mastered the art of monetizing it; that’s ensured many of the city’s old Olympic venues, including the nearly century-old L.A. Coliseum, continue to be used.
Of course, the world likely wouldn’t accept an American city as the only permanent venue (not least because in the current political climate, quite a few fans might have trouble getting visas to attend). The IOC would want to add at least two more cities in different regions that enjoy some of the same infrastructure advantages and then rotate through them. Shanghai could be an option; so, too, Paris or Berlin. Certainly, having just a few Olympic cities would be better than risking having none at all.
Adam Minter is a Bloomberg View columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade.”