The Sports Examiner: City of Los Angeles releases text of proposed “Games Agreement” with Los Angeles 2028 organizers

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It’s still almost seven years until the Games of the XXXIV Olympiad and XVIII Paralympic Games in Los Angeles, but the City and the LA28 organizers are not waiting. A proposed 23-page “Games Agreement” outlining the services to be provided by the City and the responsibilities of the organizing committee was posted Wednesday evening, with a recommendation from City staff to approve it by 8 December.

The agreement itself does not break much new ground. As the introduction notes, “The City Attorney advises that any changes in the Games Agreement compared to the [existing Memorandum of Understanding] are not material in nature and continue the intent of the MOU” which was signed in 2018.

The core of the agreement concerns costs to the City resulting from the staging of the 2028 Olympic Games in Los Angeles. The contract summary states the key concept as:

“The City agrees to provide and maintain, at its own cost, normal and customary City resource levels leading up to and during the hosting of the 2028 Games. LA28 may request that the City provide enhanced City resources that exceed normal and customary levels. Costs resulting from requested and agreed upon enhanced City resources will be reimbursable to the City by LA28.”

This is exactly the same concept on which the City and the Los Angeles Olympic Organizing Committee agreed for the 1984 Olympic Games. Further, a procedure is specified to determine the level of normal (existing) City service by 1 October 2024, with an “Enhanced City Resources Master Agreement” for activities to be concluded by 1 October 2025 to identify more-than-normal City activity to be paid for by the organizing committee and detail the “repayment timelines, audit rights, and other processes for the Games.”

A separate set of agreements are to be concluded by 1 October 2026 for specific competition and support venues operated by the City. Arrangements with sites outside the City will be negotiated separately with the relevant entity, on the same principles.

However, the proposed agreement goes much further in terms of what the LA28 organizers must provide to the City compared to the 1984 Games:

● City staff: In order to cover planning costs, LA28 will pay for the equivalent of up to four full-staff City staff beginning in 2024.

● Games Surplus: The Host City Contract specifies that LA28 will receive 80% of any surplus from the 2028 Games, and this amount will be moved to a “Legacy Entity” to be established by 31 January 2028. The City and LA28 will each nominate an equal number of directors, making it a shared-governance project. The other 20% will go to the U.S. Olympic & Paralympic Committee.

L.A. Mayor Eric Garcetti made a prediction at the 2019 Los Angeles Sports Summit that the organizers would realize a $1 billion-plus operating surplus from the Games. So breaking even is not really good enough.

● Human Rights: “LA28 will develop and implement, in close coordination with the City, a human rights strategy committed to human rights protections in the City of Los Angeles.” This program is to be developed between 1 January 2024 and 31 December 2025.

● Community Access: “LA28 will develop solutions in furtherance of making tickets
and access available and affordable to City residents in an equitable manner.” This is specified to include programs for low-and-moderate income individuals, residents near the venues, students, veterans, youth and “Caregivers of persons with high dependencies or disabilities” attending with their dependent.

● Community business and staffing: Programs will be required to “to ensure that small,
local, and underrepresented businesses have access and can participate in contract opportunities associated with the 2028 Games” and “a program in furtherance of ensuring that the 2028 Games workforce is fully representative of the diversity of Los Angeles.” The specific goals of both programs are due by 31 March 2025.

The City is also planning a “business attraction program” to promote business in Los Angeles, but LA28’s role is only to share information and collaborate.

● Sustainability: A plan is due by 31 March 2023 to support “advancement of the City’s applicable sustainability goals such as the City’s goals for zero carbon transportation, zero carbon grid, zero carbon buildings, zero waste, and zero wasted water.”

This is in line with the International Olympic Committee’s stance that the Los Angeles Games must be carbon-neutral, if not carbon-positive. The Games Agreement calls for the LA28 Games to meet “International Organization for Standardization 20121 standards.”

A “Games Energy Council” is also called to coordinate power requirements for the Games.

● Transportation: LA28 will “will develop and lead, in close coordination with the City, a mobility and transportation plan” and an operations plan for area airports.

None of these items were required of the 1984 organizing committee, which was a completely private-sector entity and received no governmental financial guarantees. The City of Los Angeles and the State of California are both on the hook for $270 million (each) in guarantees against an organizing committee deficit. Accordingly, the City must have not less than one-sixth of all seats on the LA28 Board.

There are several other items included in the contract:

● Arts and Culture: LA28 is obligated to stage a cultural program with the Games; the Games Agreement requires the organizers to develop a plan “to provide culturally diverse communities with opportunities and capacity to bid, propose, and receive contracts to produce local events, festivals, and cultural experiences in conjunction with the 2028 Games.”

● Public Safety: A “California Olympic and Paralympic Public Safety Command” was established earlier this year and is integrated into the agreement.

● Risk Management: LA28 is required to “maintain insurance policies in accordance with
prudent commercial best practices to include, but not be limited to, policies to protect against natural disasters, communicable diseases, terrorism, civil unrest, cyber-attacks, event cancellation, and coverage for reduced ticket sales and other revenue losses should the events become less appealing.”

A contingency is not less than $270 million – the City’s guarantee amount – is specified.

The agreement requires LA28 to make annual reports on 31 March of each year, as it has been doing, but does not mandate any other public reporting of its activities.

The already-executed Youth Sports Agreement, in which LA28 has committed to $160 million in funding for City Recreation & Parks Department programs through 2028, is also integrated.

Interestingly, the City has required an agreement by the end of 2022 to allow the City to use some of the organizing committee’s intellectual property (logos and other marks), but this must be approved by the International Olympic Committee.

Is this a good agreement for the City? For LA28?

It’s really not a final agreement at all, but an agreement to agree on more specifics at a late date. But for the City, it continues to underline its commitment to being reimbursed for all of its activities above and beyond its normal course of business in at least the last three years prior to the Games. And it has LA28 agreed to make efforts to hire local business, local people and make affordable tickets available to people who might not otherwise be able to attend the Games.

For LA28, the agreement is certainly not a cost-saver, but it prevents the organizing committee from being held up to fund normal City expenses. And it provides a valuable blueprint of specific civic-sector targets it must meet over the final three years of the organizing effort.

Activists will be unhappy, of course, because the agreement – depending on the activist – allows the Games to go on, and/or does not solve their pet problems, whether they be traffic, homelessness, climate or something else. Look for them to signal their fury at upcoming City Council hearings on the proposed text.

This “Games Agreement” is not a breakthrough, but it is incremental progress for both sides, and it shows a continuation of a positive working relationship as well as the agreed  concepts of city reimbursement on which the L.A. bid was based.

For now, that’s pretty good.

~ Rich Perelman

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