Bid officials in Los Angeles have officially confirmed their intention to host the Olympic and Paralympic Games in 2028.
The city’s bid committee, which had been vying for the 2024 Games alongside Paris, will now turn their attentions to hosting the 2028 edition with support from the International Olympic Committee (IOC).
On Monday, shortly after an LA Times article broke the news that a deal was done, LA bid officials and the IOC released a joint statement in which they confirmed that the framework for a host city contract for 2028 had been agreed in principle.
Under the terms of the deal, the IOC will make a US$1.8 billion advance payment to a newly established LA organising committee, which will be tasked with putting the necessary plans in place for the 2028 Games.
Those funds will be paid ‘in view of the longer planning period and to increase participation and access to youth sports programmes in the City of Los Angeles in the years leading up to the Games’, according to Monday’s statement.
The figure could, however, rise above US$2 billion when ‘the estimated value of existing sponsor agreements to be renewed and potential new marketing deals’ are taken into account.
Monday’s statement confirms the first details of the 2028 hosting contract, which has been in the offing since IOC members voted in July to award those Games along with the 2024 edition when they meet in Lima, Peru on 13th September.
Since April, officials from the LA and Paris bid teams have been in negotiations with IOC representatives in an effort to settle on a “tripartite agreement” that would dictate which city goes first, with LA officials seeking certain financial concessions for stepping aside and waiting until 2028.
Terms of the unprecedented arrangement will now be considered for approval by the LA City Council and the United States Olympic Committee (USOC) Board of Directors in August. If approved, it is expected that the IOC, LA and Paris will enter a three-way agreement, paving the way for the IOC membership to award the 2024 and 2028 Games in September.
Under the terms of the 2028 host city contract that has been agreed in principle, the local organising committee will receive an estimated US$437 million from commercial rights and benefits - although that figure is projected to rise by US$200 million through new global sponsorship deals and renewals with existing partners. The 2028 host will also be able to sell domestic sponsorships in categories not filled by IOC global sponsors.
Meawhile the 2028 organising committee will get US$898 million in broadcast revenue, US$180 million of which will be paid over a five-year period in quarterly instalments of US$9 million. Those payments are intended to cover the organising committee's extended operating period and will begin within ten days of its establishment, or on 1st January 2018, whichever comes first.
Surplus profits resulting from the staging of the Games will be split between the local organising committee and the host national Olympic committee, with 80 per cent going to the former and 20 per cent to the latter.
Notably, LA's bid for 2024 included a $487.6 million contingency - money that would have become surplus had the Games come in under their US$5.3 billion budget. For 2028, the IOC has waived its right to a 20 per cent cut of any surplus revenue, meaning LA could potentially earn an extra US$100 million-plus.
Additionally, the local organising committee for 2028 will also get up to US$160 million in the form of an interest-free loan to support ‘youth and sport-oriented’ projects and initiatives in the host city prior to the Games. A full version of the 2028 host city contract is available here.
“This is an historic day for Los Angeles, for the United States and for the Olympic and Paralympic Movements around the world,” said LA mayor Eric Garcetti, who has spearheaded the Californian city’s bid.
“Today, we take a major step toward bringing the Games back to our city for the first time in a generation and begin a new chapter in Los Angeles’ timeless Olympic story.
“This agreement with the IOC will allow us to seed a legacy of hope and opportunity that will lift up every community in Los Angeles - not in 11 years’ time, but starting now and continuing in the years leading up to the Games. LA 2028 will kick-start our drive to make LA the healthiest city in America, by making youth sports more affordable and accessible than ever before.”
IOC president Thomas Bach added: “The IOC welcomes this decision of the Los Angeles Olympic and Paralympic bid committee. They presented a strong and enthusiastic candidature that embraces the Olympic Agenda 2020 sustainability priorities by incorporating existing facilities and encouraging the engagement of more youth in the Olympic Movement.
“Therefore, we are very happy that as part of this host city contract, we are able to expand the impact of city youth sports programming and encourage the healthy lifestyle of Angelenos for the next 11 years. We are very confident that we can reach a tripartite agreement under the leadership of the IOC with LA and Paris in August, creating a win-win-win situation for all three partners.”
Both LA and Paris are vying to stage their third editions of the Games - LA previously hosted the event in 1984 and 1932, while Paris staged it in 1900 and 1924.