Los Angeles redefines 'compromise' in latest Olympic bidding duel

Why does 2028 Olympics work for L.A.? (2:07)

Wayne Drehs explains why Los Angeles is on the verge of hosting the 2028 Olympics instead of 2024. (2:07)

CARSON, Calif. -- The Olympic Games have always been a mega sporting event flush with hyperbole. Each of those 17 days are filled with physical tests to see who is the fastest, strongest and mentally toughest. So when Los Angeles mayor Eric Garcetti stepped onto the podium at the StubHub Center here Monday evening and formally announced the city had reached an agreement with the International Olympic Committee to host the 2028 Summer Games, his words were, well, over the top.

"There is no other metaphor. It was a marathon," he said. "A couple times, we were counted out altogether. But we never hit a wall. We never lost our focus, and today we are at the finish line."

Against a cloudless, powder-blue, twilight sky and with the new LA2028 slogan, "Follow the Sun," boldly plastered on the stadium scoreboard behind him, Garcetti and the rest of the LA2024 leadership proudly celebrated the moment they had spent two years waiting for.

"We are here today to make history," Garcetti said. "I'm proud to say the Olympics are coming back to the United States of America."

Monday's news wasn't a surprise. With the announcement, there will be a dual-bid allocation, with Paris receiving the 2024 Summer Games -- an outcome those close to Olympic circles have seen coming for months. The proposal was rubber-stamped by IOC membership last month in Lausanne, Switzerland, paving the way for the negotiations between Paris, Los Angeles and the IOC that led to Monday's agreement.

But the obvious conclusion doesn't minimize its importance. On the most basic level, the news is that, yes, the Summer Olympics will return to the U.S. for the first time since Atlanta in 1996. The announcement comes at a time when the United States Olympic Committee had grown increasingly frustrated by failed bids for the 2012 and 2016 Games. There were rumblings an L.A. loss might mean the U.S. would not bid again.

But the bigger story is a complete shift in the Olympic paradigm. For the first time in the modern era, the script has been reversed. Rather than cities taking desperate measures to win over IOC members for their votes, the money this time is flowing the other way. As part of its agreement with Los Angeles, the IOC agreed to increase the amount of revenue it will share to help offset the additional cost and risk that comes with waiting four additional years. It is also waving some $50 million in fees.

Why is this important? Well, you first have to understand how Olympic funding usually works. Since 1984, the last time Los Angeles hosted the Summer Games, the IOC has sold television rights and international sponsorships on its own. It then cuts a check to the host city for a predetermined amount to help cover the cost of the event. That amount is set to be $1.7 billion in 2024 (it was $1.5 billion for Rio last summer). From there, cities rely on domestic sponsorships ($1.2 billion in London in 2012) and ticket sales ($1.1 billion in London) to cover the remaining expenses. The caveat: That amount is rarely enough to cover all the bills.

But, for 2028, the IOC has agreed the amount could be as much as $2 billion. Of perhaps even greater importance: The IOC has agreed to not take its 20 percent share of any surplus that is left after the Games, allowing the L.A. organizing committee to sell domestic sponsorships in any area where the IOC doesn't already have a sponsor. Those concessions could potentially be worth hundreds of millions of dollars.

"What we were able to negotiate -- this deal was too good to pass up," Garcetti said. "This legacy can inspire a whole new generation."

Garcetti made no secret of his desire to make youth sport free for children in Los Angeles. He said Monday that process could begin as early as next year thanks to the $160 million, interest-free, upfront loan from the IOC. "That's something worth fighting for," Garcetti said.

What does the IOC expect from L.A. in return? To save the future of the Olympic movement. And no, that's not more Olympic hyperbole.

The days of cities lining up one after another begging to host the Games are long gone. Back in September 2015, when Garcetti stood behind a podium on Santa Monica Beach to formally announce L.A. would represent the U.S. as its 2024 candidate city, the field was crowded with four other contenders: Budapest, Hamburg, Paris and Rome. But residents in three of those four cities looked at a recent string of cost overruns and pressured public officials to bag the Olympic dream. The same happened in the bidding for the 2022 Winter Games, with six cities ending their bids before a decision was made.

And who could blame those cities for dropping out. For the 2008 Summer Games, Beijing reportedly budgeted $1.6 billion and spent $40 billion. In London in 2012, $4 billion became $13 billion. Peak absurdity was reached in Sochi, where the Russians reportedly spent $51 billion to put on the 2014 Winter Games, more than every other Winter Olympics combined.

Now it becomes L.A.'s job to do the exact same thing it did in 1984 -- fix the broken Olympic model. Back then, in the wake of the 1972 terrorist attack in Munich and cost overruns in Montreal four years later, L.A. was the only city to bid for the 1984 Games. The end result was a $235 million surplus, more than half of the entire $413 million budget. The money was in part used to start the LA84 Foundation, which helped fund youth sports, including a tennis league in which a young Venus and Serena Williams participated. It is also part of an endowment the USOC uses each year to help support its athletes.

"This is the same sort of watershed moment," says Victor Matheson, an economics professor at the College of Holy Cross in Massachusetts who specializes in the impact of mega sporting events. "And it certainly looks like Los Angeles is going to bail them out again."

Want to know how much it costs to host the Olympics? L.A.'s $5.3 billion budget doesn't include a single new permanent venue, Olympic village or media compound. Instead, there are temporary venues and the cost to ensure the current facilities to be Olympic-ready. Though they won't say so publicly, L.A. bid committee officials are optimistic their proposal will result in a similar economic impact on its residents. Just like Peter Ueberroth did when he negotiated that groundbreaking agreement with the IOC in 1984.

"[LA2024 chairman Casey Wasserman] and the mayor, they know their success will not be measured against Tokyo [in 2020] or Rio, but rather that of Peter Ueberroth," said UCLA professor Zev Yaroslavsky, who spent 40 years as an elected official in Southern California, including 19 on the L.A. City Council. "They know that, and they want to do an even better job than Ueberroth."

Technically, the deal isn't 100 percent complete. The L.A. City Council will need ratify the agreement over the course of the next week; but you can believe Garcetti and other bid leaders wouldn't have put on Monday's show if they weren't close to 100 percent certain the council was on their side. Later, the IOC will do the same and is expected to make the formal announcement for both Paris and Los Angeles at its meeting on Sept. 13 in Lima, Peru.

Never before has there been 11 years between when the IOC chose a host city and when the opening ceremonies occurred in that city. With the decision comes greater risk and greater opportunity; but what happens after the 2028 Games will be what matters most to the Olympic movement.

Will countries again line up looking to repeat Los Angeles' success? How many of those cities will have the infrastructure to replicate L.A.'s template? Or will a new blueprint somehow be established, one in which the IOC will change what matters most and value bids that leave a truly prosperous legacy behind?

Monday was the first step in a long process to find out the answers.