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 [ LOS ANGELES ](https://mail.citywatchla.com/index.php?option=com_content&view=category&id=312)

#  What Happens If Los Angeles Cancels the 2028 Olympics?

Written by CityWatch.

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LA2028 - Los Angeles is heading toward one of the most consequential civic decisions in its modern history—and almost no one in City Hall wants to say it out loud.

With fewer than three years until the opening ceremonies, the city is locked into hosting the 2028 Summer Olympics under contracts signed in 2017. Those agreements were approved in just 11 days, without a finalized budget, without voter approval, and without the financial protections Los Angeles insisted upon in 1984.

Now, as the city faces a nearly $1 billion budget deficit, post-fire rebuilding costs, rising homelessness, and deep uncertainty over federal funding, a once-unthinkable question is being asked more openly:

**What if Los Angeles cancels the Olympics?**

The uncomfortable answer, according to a new report by Strategic Actions for a Just Economy (SAJE), is this:

Los Angeles may be damned if it cancels—and damned if it doesn’t.

**The Financial Trap Los Angeles Is In**

Under the Host City Contract signed with the International Olympic Committee (IOC), Los Angeles is the financial backstop for the 2028 Games.

If the organizing committee (LA28) runs a deficit, the city must cover:

- The first $270 million in losses
- The next $270 million falls to the State of California
- Anything beyond that comes back to Los Angeles

There is no cap.

Unlike 1984, there is no charter amendment protecting taxpayers. Unlike 1984, the IOC controls major sponsorship and TV revenue. Unlike 1984, security costs alone are expected to exceed $2 billion, with only $1 billion in federal funding guaranteed.

Olympic scholars call this “blank-check economics.” The Oxford Olympics Study found that every Olympic Games in the last 40 years has exceeded its original budget, with average cost overruns of more than 150 percent.

If Los Angeles experiences even a modest overrun by Olympic standards, the report estimates that taxpayers could be exposed to more than $6.6 billion in costs.

**What Canceling the Olympics Would Mean**

Canceling the Games would be unprecedented at this late stage—but not impossible.

The city cannot simply walk away. Only the IOC can formally terminate the contract. If Los Angeles refuses to perform, the IOC could sue for breach of contract through international arbitration in Switzerland.

How much would that cost?

No one knows. But economists familiar with Olympic contracts estimate potential damages in the billions, depending on how much TV, sponsorship, and licensing revenue the IOC claims it would lose.

However, cancellation would also eliminate enormous future costs, including:

- Olympic security operations
- Transit surge spending
- Policing and emergency staffing
- “Enhanced city services” that LA28 has yet to define or reimburse

The report points to recent precedent. Australia’s state of Victoria canceled the 2026 Commonwealth Games after projected costs more than doubled. The withdrawal cost hundreds of millions—but auditors concluded it still saved the state billions.

In other words, cancellation can be financially painful and financially rational.

**The Hidden Costs of Hosting**

Money is only part of the equation.

Every modern Olympics has brought:

- Mass displacement of unhoused residents
- Accelerated evictions near venues
- Sweeps, surveillance, and expanded policing
- Restrictions on protest and public space

Los Angeles is already experiencing intensified encampment clearances under state and federal pressure. Hosting the Olympics would place those actions under the authority of federal security agencies, including the Department of Homeland Security, during an election year.

The report warns that the Olympics could dramatically reshape daily life in large parts of the city—not for weeks, but for years.

**The Myth of the Economic Boom**

Supporters argue that canceling would forfeit billions in economic benefits. But decades of research show that Olympic “economic impact” claims routinely confuse gross spending with actual public benefit.

Tourists who avoid the city because of crowds, residents who leave town, and spending that flows to multinational hotel chains all reduce real gains. Studies of London, Paris, Atlanta, and Tokyo show that Olympics often displace normal economic activity rather than create new wealth.

Even optimistic projections show that personal income gains for residents would be measured in hundreds of millions, not billions—far less than the city’s potential exposure if costs spiral.

**A Third Option: Renegotiation**

The report points to a third path that city leaders have barely discussed: leverage.

The IOC does not want a public collapse of the 2028 Games. Los Angeles still has bargaining power—especially if the alternative is cancellation or legal warfare.

Possible renegotiations could include:

- Greater IOC assumption of security costs
- Clear limits on city financial liability
- Scaling back venue plans
- Enforceable reimbursement for city services

None of these options are guaranteed. But refusing to even explore them leaves Los Angeles absorbing all the risk.

**The Core Question Facing Los Angeles**

The report’s conclusion is blunt:

Los Angeles committed to the Olympics without doing the due diligence it demanded in 1984. Now, residents face two risky paths—continuing forward with potentially unlimited costs or cutting losses through a legally messy exit.

Either way, pretending there is “no choice” is the most dangerous option of all.

As the report puts it:

Cancel or don’t cancel—Los Angeles is staring at a fiscal disaster either way. But only one path offers the chance to choose a humane outcome.

The real scandal may not be what happens next—but that this conversation is happening eight years too late.

\[NOTE: Inspiration for this article is credited to SAJE (Strategic Actions for a Just Economy) is a 501(c)(3) nonprofit organization in South Central Los Angeles that builds community power and leadership for economic justice. Founded in 1996, SAJE focuses on tenant rights, healthy housing, and equitable development. We believe that everyone in Los Angeles, regardless of income or connections, should have a voice in creating the policies that shape our city, and that the fate of city neighborhoods should be decided by those who dwell there in a manner that is fair, replicable, and sustainable.\]

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