For over a century, the Olympics have provided a platform for host cities to showcase their culture, infrastructure, and global standing. However, the financial and logistical complexities of hosting have escalated, leading many cities to question the economic value of the Games. By examining the growing costs, potential benefits, and key case studies—particularly Los Angeles’ (LA) model—this article explores the feasibility and sustainability of hosting the Olympics in today’s economic climate.

 

 

The increasing scale of the Olympics has placed significant financial strain on host cities. Since the 2000s, costs have regularly exceeded initial budgets due to heightened security requirements, large-scale infrastructure projects, and event logistics. For instance, Tokyo 2020’s costs rose from an initial estimate of $7.3 billion to over $15.4 billion. Even more striking, Russia’s Sochi Winter Olympics in 2014 spiralled from a projected $12 billion to $50 billion, much of it due to poor planning, mismanagement, and cost overruns related to newly constructed infrastructure?.

 

This pattern has significantly reduced interest among potential host cities. For the 2024 Olympics, only two cities—Paris and Los Angeles—submitted bids after others, like Rome and Budapest, withdrew amid growing public opposition and financial concerns. This trend reflects the increasing public awareness of the economic risks associated with hosting the Games. Additionally, the International Olympic Committee’s (IOC) past emphasis on large, new infrastructure projects has led to many cities suffering from “white elephant” venues—costly, underused facilities that strain public finances post-Games.

 

 

The Los Angeles (LA) Olympics in 1984 represent a landmark case of hosting the Games sustainably and profitably. With no competition from other cities, LA secured favourable terms with the IOC, using an existing infrastructure approach that drastically reduced construction expenses. The Los Angeles Memorial Coliseum, which hosted the Games in 1932, was repurposed, while other local venues were upgraded rather than newly constructed. This minimal infrastructure model allowed LA to avoid large capital costs, enabling the city to achieve a $232.5 million profit, which funded youth sports programs and community projects in the years following?.

 

LA’s 1984 success serves as the foundation for its approach to the upcoming 2028 Olympics, which are projected to cost $6.9 billion. The LA 2028 Organising Committee plans to leverage existing sports facilities, such as SoFi Stadium and Crypto.com Arena, alongside temporary venues. This strategy aims to maintain low overhead costs while maximising revenue through sponsorships and broadcast rights, with projected revenues expected to exceed $7.5 billion. If successful, LA 2028 could replicate the financial success of its 1984 predecessor and further reinforce the model of sustainable hosting.

 

 

Los Angeles’ strategy offers valuable lessons for future host cities, particularly in the areas of budget control, private funding, and environmental sustainability. Some key aspects of the LA model that other cities could adopt include:

 

Utilising Existing Infrastructure: LA demonstrated that leveraging pre-existing venues, rather than building new ones, significantly reduces financial risk. For example, London and Sydney, both cities with well-developed sports infrastructure, could similarly limit costs by repurposing existing facilities.

 

Encouraging Private Investment: The LA 1984 Olympics set a precedent for privately funded Games, with corporate sponsors covering a substantial portion of costs. The 2028 Games aim to continue this model by drawing much of the budget from sponsorship and broadcast deals. This reduces reliance on public funds, thus mitigating the financial risk to taxpayers.

 

Employing Temporary Structures: To avoid creating white elephants, LA 2028 plans to construct temporary venues for less popular events. This model has already influenced Paris 2024, where 95% of the venues are either existing or temporary. Such flexibility minimizes costs and aligns with sustainability goals by preventing unused facilities post-Games?.

 

Focusing on Environmental Sustainability: With mounting global attention on environmental issues, the LA model aligns with the IOC’s Agenda 2020, which encourages environmentally friendly practices. By relying on existing infrastructure, LA minimises environmental impact, providing a sustainable template that could help future host cities achieve eco-friendly and economically feasible Games.

 

 

The Olympics offer host cities certain economic advantages, notably through revenue from ticket sales, sponsorships, and broadcasting rights. However, these revenue streams typically cover only a fraction of the total costs. For example, ticket sales generally account for 20-30% of total revenue, leaving host cities to rely heavily on broadcasting rights and sponsorship deals. Between 2017 and 2020, broadcasting rights generated approximately $4.5 billion for the IOC, underpinning the financial structure of the Games.

 

Despite these short-term gains, the long-term economic impact of hosting is often less favourable than expected. Although cities frequently anticipate increased tourism, foreign investment, and commercial growth, these benefits are often transient. Following the 2012 Games, London experienced a brief spike in tourism; however, visitor numbers returned to pre-Olympics levels within a few years. For cities to achieve lasting economic gains, they must invest in effective post-games marketing and work to integrate new infrastructure into the local economy?.

 

 

The lessons from Los Angeles’ 1984 and 2028 approaches illustrate that hosting the Olympics can be both financially sustainable and beneficial when approached thoughtfully. By prioritising existing infrastructure, promoting private investment, and committing to sustainability, host cities can reduce the financial risks associated with the Games.

 

While the prestige of hosting the Olympics continues to attract cities, LA’s model offers a viable path forward—one that prioritises long-term economic stability over the costly pursuit of new infrastructure. Future host cities would benefit from adopting the principles championed by the LA model, turning the Olympics into an opportunity for sustainable growth rather than an economic gamble.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For over a century, the Olympics have provided a platform for host cities to showcase their culture, infrastructure, and global standing. However, the financial and logistical complexities of hosting have escalated, leading many cities to question the economic value of the Games. By examining the growing costs, potential benefits, and key case studies—particularly Los Angeles’ (LA) model—this article explores the feasibility and sustainability of hosting the Olympics in today’s economic climate.

 

 

The increasing scale of the Olympics has placed significant financial strain on host cities. Since the 2000s, costs have regularly exceeded initial budgets due to heightened security requirements, large-scale infrastructure projects, and event logistics. For instance, Tokyo 2020’s costs rose from an initial estimate of $7.3 billion to over $15.4 billion. Even more striking, Russia’s Sochi Winter Olympics in 2014 spiralled from a projected $12 billion to $50 billion, much of it due to poor planning, mismanagement, and cost overruns related to newly constructed infrastructure?.

 

This pattern has significantly reduced interest among potential host cities. For the 2024 Olympics, only two cities—Paris and Los Angeles—submitted bids after others, like Rome and Budapest, withdrew amid growing public opposition and financial concerns. This trend reflects the increasing public awareness of the economic risks associated with hosting the Games. Additionally, the International Olympic Committee’s (IOC) past emphasis on large, new infrastructure projects has led to many cities suffering from “white elephant” venues—costly, underused facilities that strain public finances post-Games.

 

 

The Los Angeles (LA) Olympics in 1984 represent a landmark case of hosting the Games sustainably and profitably. With no competition from other cities, LA secured favourable terms with the IOC, using an existing infrastructure approach that drastically reduced construction expenses. The Los Angeles Memorial Coliseum, which hosted the Games in 1932, was repurposed, while other local venues were upgraded rather than newly constructed. This minimal infrastructure model allowed LA to avoid large capital costs, enabling the city to achieve a $232.5 million profit, which funded youth sports programs and community projects in the years following?.

 

LA’s 1984 success serves as the foundation for its approach to the upcoming 2028 Olympics, which are projected to cost $6.9 billion. The LA 2028 Organising Committee plans to leverage existing sports facilities, such as SoFi Stadium and Crypto.com Arena, alongside temporary venues. This strategy aims to maintain low overhead costs while maximising revenue through sponsorships and broadcast rights, with projected revenues expected to exceed $7.5 billion. If successful, LA 2028 could replicate the financial success of its 1984 predecessor and further reinforce the model of sustainable hosting.

 

 

Los Angeles’ strategy offers valuable lessons for future host cities, particularly in the areas of budget control, private funding, and environmental sustainability. Some key aspects of the LA model that other cities could adopt include:

 

Utilising Existing Infrastructure: LA demonstrated that leveraging pre-existing venues, rather than building new ones, significantly reduces financial risk. For example, London and Sydney, both cities with well-developed sports infrastructure, could similarly limit costs by repurposing existing facilities.

 

Encouraging Private Investment: The LA 1984 Olympics set a precedent for privately funded Games, with corporate sponsors covering a substantial portion of costs. The 2028 Games aim to continue this model by drawing much of the budget from sponsorship and broadcast deals. This reduces reliance on public funds, thus mitigating the financial risk to taxpayers.

 

Employing Temporary Structures: To avoid creating white elephants, LA 2028 plans to construct temporary venues for less popular events. This model has already influenced Paris 2024, where 95% of the venues are either existing or temporary. Such flexibility minimizes costs and aligns with sustainability goals by preventing unused facilities post-Games?.

 

Focusing on Environmental Sustainability: With mounting global attention on environmental issues, the LA model aligns with the IOC’s Agenda 2020, which encourages environmentally friendly practices. By relying on existing infrastructure, LA minimises environmental impact, providing a sustainable template that could help future host cities achieve eco-friendly and economically feasible Games.

 

 

The Olympics offer host cities certain economic advantages, notably through revenue from ticket sales, sponsorships, and broadcasting rights. However, these revenue streams typically cover only a fraction of the total costs. For example, ticket sales generally account for 20-30% of total revenue, leaving host cities to rely heavily on broadcasting rights and sponsorship deals. Between 2017 and 2020, broadcasting rights generated approximately $4.5 billion for the IOC, underpinning the financial structure of the Games.

 

Despite these short-term gains, the long-term economic impact of hosting is often less favourable than expected. Although cities frequently anticipate increased tourism, foreign investment, and commercial growth, these benefits are often transient. Following the 2012 Games, London experienced a brief spike in tourism; however, visitor numbers returned to pre-Olympics levels within a few years. For cities to achieve lasting economic gains, they must invest in effective post-games marketing and work to integrate new infrastructure into the local economy?.

 

 

The lessons from Los Angeles’ 1984 and 2028 approaches illustrate that hosting the Olympics can be both financially sustainable and beneficial when approached thoughtfully. By prioritising existing infrastructure, promoting private investment, and committing to sustainability, host cities can reduce the financial risks associated with the Games.

 

While the prestige of hosting the Olympics continues to attract cities, LA’s model offers a viable path forward—one that prioritises long-term economic stability over the costly pursuit of new infrastructure. Future host cities would benefit from adopting the principles championed by the LA model, turning the Olympics into an opportunity for sustainable growth rather than an economic gamble.