As Los Angeles gears up to host the 2028 Summer Olympics, the city is already looking beyond Paris 2024, setting its sights on an event that promises to reshape the region’s infrastructure and economy. The construction efforts are well underway, with key projects aimed at improving transportation, revamping the airport, and modernizing the downtown convention center, which will serve as the venue for five sports. These initiatives are being funded through a combination of federal and city dollars, as well as airport fees, and are expected to leave a lasting impact on the region.
Los Angeles views the Olympics not as a financial burden but as a significant revenue opportunity. The 1984 Summer Olympics, held in the same city, are often cited as one of the most financially successful Games in modern history. By leveraging existing facilities like the Los Angeles Memorial Coliseum and the Rose Bowl, the 1984 Games turned a reported $223 million profit, equivalent to approximately $670 million today. The city hopes to replicate this success in 2028, albeit on a much larger scale.
The financial stakes are high, with LA28, the private group organizing the Games, operating on an estimated budget of nearly $7 billion. This budget is intended to cover the costs associated with staging the events, including the opening and closing ceremonies. The group plans to fund these expenses through a combination of sponsorships, ticket sales, global television rights, and payments from the International Olympic Committee. In addition to these funds, Los Angeles has secured $900 million in federal money specifically for infrastructure and transportation improvements ahead of the Games.
One of the most significant investments is the $14 billion renovation of Los Angeles International Airport (LAX). This massive project includes the addition of an automated people mover to connect the central terminal area to rail transit and a new rental car facility. Simultaneously, the Los Angeles County Metropolitan Transportation Authority is spending $20 billion to expand bus and rail lines, including a new train route from downtown to the westside, near the University of California, Los Angeles (UCLA).
Despite these extensive preparations, the financial risk remains a concern. Los Angeles and California officials have agreed to serve as financial backstops, with the city covering the first $270 million in potential cost overruns and the state covering the next $270 million. This arrangement puts taxpayers on the hook for any expenses that exceed the initial budget, a scenario that has played out in many past Olympics. For example, the Tokyo 2021 Olympics, delayed by the pandemic, ended up costing $14 billion, 128% over budget, while the 2016 Rio de Janeiro Games became the most expensive Summer Olympics to date, with costs totaling $24 billion, or 352% over budget.
To mitigate these risks, LA28 has emphasized sustainability and the use of existing facilities. For example, instead of constructing a multibillion-dollar Olympic Village, athletes will stay in dormitories at UCLA. However, some events, such as softball and canoe competitions, will be held in Oklahoma City, 1,300 miles away, to avoid the expense of building new venues in Los Angeles.
The economic benefits of the 2028 Olympics are expected to extend well beyond the Games themselves. Local politicians anticipate that the event will generate profits that will benefit the city for years to come, much like the LA84 Foundation, which has used profits from the 1984 Games to support youth development through sports. However, some groups, like NOlympics LA, argue that the costs of hosting the Olympics, including potential displacement and gentrification, outweigh the benefits.
As Los Angeles continues its preparations, the city is determined to prove the skeptics wrong and demonstrate that the 2028 Olympics will not only be a successful event but also a catalyst for long-term economic growth and development in the region.