California is headed toward the 2028 Olympics with a nine-year-old legislative promise and no signed contract to back it up.
Back in 2017, state lawmakers passed legislation directing the governor to execute a formal agreement committing California to cover up to $270 million in potential losses tied to the Los Angeles Games. That contract doesn’t exist. As of April 2026, the state and the city are still talking about it.
Governor Gavin Newsom’s office, when pressed on the gap, pointed reporters toward the California Department of Finance. H.D. Palmer, a spokesperson for the Department of Finance, said negotiations with LA28 and the city of Los Angeles are ongoing and insisted there aren’t any “sticking points” in official correspondence. These aren’t small warning signs.
Palmer’s explanation for nine years of inaction: contract language takes time to work out. That answer is going to be a hard sell to city officials watching Los Angeles’s financial exposure pile up in real time.
The liability structure here is worth spelling out clearly. LA28, the private nonprofit managing the Games, would need to rack up losses exceeding $540 million before the city’s liability stops. Below $270 million in losses, Los Angeles absorbs everything. Between $270 million and $540 million, the state covers the gap. Beyond $540 million, the city is back on the hook with no cap on what it could owe. There’s no ceiling. None.
That’s not a theoretical problem. It’s a structural one, and it’s sitting on top of a city that’s still recovering from the January wildfires while managing a constrained budget ahead of what may be the single largest logistical event ever staged in Southern California.
The unsigned state contract isn’t the only friction point. A separate agreement between Los Angeles and LA28 covering city services during the Games, police overtime, infrastructure costs, and related operational expenses, was supposed to be finalized more than six months ago. It still hasn’t been signed.
Councilmember Monica Rodriguez sent a public letter to LA28 CEO Reynold Hoover laying out the stakes in direct language. Without a binding deal, Rodriguez warned, the Olympics could “bankrupt” the city. That word didn’t come from a watchdog group or an op-ed. It came from an elected official who sits on the council and has read what the agreements actually say, or don’t say.
Rodriguez’s concern isn’t abstract. If LA28 runs the 2028 Games, uses city resources throughout, and ends up running significant losses, Los Angeles could be left carrying costs it never formally agreed to take on. The absence of a signed contract is exactly the kind of ambiguity that ends up costing cities money.
LA28 pushed back gently. Jacie Prieto Lopez, the organization’s vice president of communication and public affairs, said in a statement that LA28 “engage[s] regularly with our state partners on various Games planning items and look[s] forward to continuing our strong partnership with the state and the city in the lead up to 2028 as we work to execute a fiscally responsible Games.” It’s the kind of answer that covers a lot of ground without committing to anything specific.
Ilanna Morales, a spokesperson for Mayor Karen Bass, told LAist that the city was “confident that an agreement will be reached and that the 2028 Olympic and Paralympic Games will be a financial success.”
That confidence may be warranted. It may not be. What’s certain is that history doesn’t favor it.
The Oxford Olympic Study has tracked Olympic cost overruns going back to 1960, and the pattern is consistent: host cities spend more than they plan to. Los Angeles hosted the Games in 1984 and walked away with a surplus, which is why the city’s advocates keep citing it. But 1984 was an outlier, staged under conditions that don’t exist in 2026, with a geopolitical backdrop that kept competing bids away and a cost structure that bears almost no resemblance to what LA28 is managing today.
California authorized this financial backstop in 2016 and passed the contract requirement in 2017. The Games are two years out. The contract still isn’t signed.