L.A. Olympics in 2024 would fuel $11.2 billion in economic output – Long Beach Press Telegram
If Los Angeles wins its bid for the 2024 Olympic Games, the event would generate as much as $11.2 billion in economic output in the city, according to a study commissioned by Los Angeles 2024, the local organizing committee.
Los Angeles’ third Olympic Games would also create the equivalent of as many as 79,307 jobs and between $152 million and $167 million in additional tax revenues in the city, said an economic analysis by Beacon Economics LLC and the UC Riverside School of Business Center for Economic Forecasting and Development.
The study is required by the International Olympic Committee as part of the candidature city process and has to be submitted to the IOC by LA 2024 by Feb. 3. L.A. is competing with Paris and Budapest to host the games.
Long Beach, which is a part of the official U.S. Olympic bid, would host a portion of the games.
“There is little doubt that hosting the Olympics is an enormous boost for a local economy — both in the short term as driven by activity surrounding the events themselves, and in the long term, given how these events raise the global profile of the region,” said Christopher Thornberg, founding partner of Beacon Economics and Director of the UC Riverside center. “The worry is always that these benefits come at too high a cost, but because Los Angeles already has many of the assets needed for a successful Olympic experience the upside is far greater than it would be for many other cities who would be hosting for the first time.”
The study, for the most part, echoes in greater detail a report by the state Legislative Analyst’s Office released last year. But in that study, the LAO said long term Olympic-related economic gains were unlikely.
“If Los Angeles hosts the 2024 Games, some short-term net economic gains in 2024 and in the years just before the Games are likely,” the LAO report. “Lasting economic gains, however, appear unlikely. That being said, the low-risk financial strategy of the bid greatly reduces the risk that the Southern California economy will bear large, longterm taxpayer expenses related to the Games. For these reasons, under the current bid plan, the longterm economic effect of the 2024 Games probably would be close to neutral.”
LA 2024 officials have projected a balanced $5.306 billion budget for the Games, outlining a financial game plan that is in stark contrast to budgets for recent Games that left bid cities swimming in red ink long after the Olympic flame was extinguished.
“It really boils down to the idea that the Olympics should be able to recover their expenses through ticket sales and sponsorships,” said Robert Kleinhenz, an economist at Beacon and UCR. “At worst you should break even.”
LA 2024 officials are able to keep projected expenses down because of a wealth of existing top-flight venues in the region. Eight-five percent of proposed venues either already exist or are planned with 80 percent of the facilities built since the 1984 Games.
Those venues span across the region, from Long Beach to the Inland Empire.
“The first thing (about the bid) that is remarkable is that it requires no new permanent venues,” Kleinhenz said. “That can’t be overemphasized. That’s such a huge plus. There are very few places around the world, if any, that could offer up” that many existing Olympic-caliber venues.
The impact of an Los Angeles Olympics would extend beyond the city’s borders, according to the study. The Games would generate between $13.3 and $14 billion in economic output across the state, $17.4 to $18.3 billion nationally.
In addition to the estimated $5.306 billion LA 2024 will spend on hosting the Games, The study’s economic analysis on the total spending on the Games estimated that visitors will spend between $1.17 and $1.46 billion in Los Angeles and between $240 to $300 million in the city after the Games.
The analysis projected 3.3 million visitors would attend the Los Angeles Games, the average visitor staying in the city 5.5 days and spending an average of $230.07 per day.
L.A. Mayor Eric Garcetti pointed back to the 1984 games as a reminder of the value of the games in the region.
“In 1984, Los Angeles showed the world that a responsibly managed Olympic Games could add billions of dollars to the local economy and bring progress that could be felt for decades to come — and we’re ready to do that again in 2024,” Garcetti said in a statement. “This report shows that L.A. is an ideal, low-risk host for the 2024 Games, and that we have the right plan in place to make sure that a winning bid brings a lasting Olympic legacy back to our city.”
The International Olympic Committee is expected to announce which city gets the games in September.