Tokyo 2020 ‘balanced’ fiscal report published



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Total costs of Tokyo Olympics unveiled Image: Japan Sports Council

The Organising Committee for the Olympic and Paralympic Games Tokyo 2020 (Tokyo 2020) have published its final financial report detailing its revenues and expenditures, which were balanced, and the overall financial results of the Tokyo 2020 Games.

The Tokyo Organising Committee of the Olympic and Paralympic Games is the organization responsible for overseeing the planning and development of the 2020 Summer Olympic and Paralympic Games.

The 2020 Summer Olympics, officially the Games of the XXXII Olympiad and also known as Tokyo 2020, was an international multisport event held from July 23rd to August 8th, 2021 in Tokyo, Japan, with some preliminary events that began on July 21st.
 

Organising Committee budget

The ‘International Olympic Committee’ stated that thanks to the efforts made to increase revenues and continuously review expenditures, Tokyo 2020 achieved a balanced budget of JPY 640.4 billion (USD 5.8 billion*).
 

The primary sources of revenue were:

  • The International Olympic Committee (IOC) contribution of JPY 86.8 billion (USD 0.8 billion);
  • TOP sponsorship of JPY 56.9 billion (USD 0.5 billion);
  • Local sponsorship of JPY 376.1 billion (USD 3.4 billion);
  • An insurance payout of JPY 50.0 billion (USD 0.5 billion) for the postponement of the Games; and
  • Other sources of revenue, including licensing, which round up to the total.

 

As for the expenditure:

  • JPY 195.5 billion (USD 1.8 billion) went on venue-related costs, such as temporary infrastructure (overlay) and technology; and
  • JPY 444.9 billion (USD 4.0 billion) went on service expenditures such as competition and venue operations, transport and security.

 

Total Games expenditures

The ‘International Olympic Committee’ further stated that the Total Games expenditures, including those borne by the Government of Japan and the Tokyo Metropolitan Government, were JPY 1,423.8 billion (USD 13.0 billion). This was reduced by JPY 220.2 billion (USD 2.0 billion) from Tokyo 2020’s version five budget announced in December 2020, and JPY 29.2 billion (USD 0.3 billion) from the estimated Games budget announced in December 2021.
 

The breakdown of the total expenses is:

  • JPY 864.9 billion (USD 7.9 billion) for venue-related expenditures, such as permanent venues, temporary infrastructure (overlay) and technology;
  • JPY 523.6 billion (USD 4.8 billion) for service expenditures, such as competition and venue operations, transport and security; and
  • JPY 35.3 billion (USD 0.3 billion) for COVID-19 countermeasures.

 
The total expenses specifically related to the Paralympic Games are JPY 151.4 billion (USD 1.4 billion).

The Olympic and Paralympic Games Tokyo 2020 were staged in unique circumstances due to the first-ever postponement of the Games, caused by the spread of COVID-19 which put the world on the edge in 2020. This resulted in the decision to restrict the number of spectators in most competition venues, which also impacted the Games finances.

However, the spirit of collaboration and partnership during the planning and delivery of the Tokyo 2020 Games helped to save significant amounts in the budget through a venue masterplan review and through the application of Olympic Agenda 2020+5 and the New Norm; and further savings were also achieved through optimizations and simplifications following the postponement.

Through these joint efforts to improve efficiency and advance simplification, even after the unexpected additional costs caused by the postponement and the COVID-19 countermeasures, the Tokyo 2020 Games were delivered with final expenditures of JPY 1,423.8 billion (USD 13.0 billion), JPY 76.2 billion (USD 0.7 billion) less than the version one budget announced in December 2016.

The budget was presented at Tokyo 2020’s last-ever Executive Board meeting as a formal entity, with the organization set to cease operations and enter its final liquidation process at the end of June 2022. These financial results follow reports from the Organising Committee and the Tokyo 2020 Coordination Commission to the IOC Session earlier this year.

*109.89 is the average USD/JPY 2021 exchange rate as published by the Bank of Japan.

The International Olympic Committee (IOC) is a non-Governmental sports organization based in Lausanne, Switzerland. It is constituted in the form of an association under the Swiss Civil Code.
 

Postmortem

‘The Hindu’ stated that accurately tracking costs of the pandemic-delayed 2020 Tokyo Olympics is a moving maze because of recent fluctuations in the exchange rate between the dollar and the Japanese yen.

Organizers of last year’s COVID-delayed Tokyo Olympics were expected to place the final cost of the Games at ¥1.42 trillion, about twice what was forecast when the IOC awarded them in 2013.
 

$10.5 billion

‘The Hindu’ further stated that the fall in the yen’s value means the cost of the Olympics quoted in dollars is now about $10.5 billion. A year ago, the price was about $13 billion.

Victor Matheson, a Sports Economist at the College of the Holy Cross who has written extensively on the Olympics, stated that most of “The expenses and revenues are in yen, so the exchange rate changing the dollar amounts doesn’t affect how the event ‘feels’ to the organizers.”

In the runup to the Tokyo Games, organizers often used the exchange rate of 107. At that rate, the equivalent of ¥1.42 trillion would be $13.33 billion as the final price tag.

Matheson and fellow American Robert Baade researched Olympic costs and benefits in a study called ‘Going for Gold: The Economics of the Olympics’.

They write, “The overwhelming conclusion is that in most cases the Olympics are a money-losing proposition for Host Cities and they result in positive net benefits only under very specific and unusual circumstances.”
 

Moving maze

Accurately tracking Olympic costs – who pays, who benefits and what are and are not Games’ expenses – is a moving maze.

Olympic organizers estimated the official costs when the Games closed a year ago at $15.4 billion.

Four months later, organizers said the costs had fallen to $13.6 billion. They said there had been a large saving because no fans were allowed to attend, dropping security costs, venue maintenance, and so forth.

However, organizers lost at least $800 million in income from no ticket sales, which fell to the Tokyo Metropolitan Government to cover.
 

Most expensive Olympics

A University of Oxford study in 2020 said Tokyo was the most expensive Olympics on record.

There is one undeniable fact: More than half of the costs were paid for by public money – Tokyo’s Government, the national Government and other Government entities.

In the several years prior to the Olympics, Government audits found official costs might have been twice as much as stated, meaning the public portion of the bill might be far more than half.

The International Olympic Committee in its annual report says it contributed about $1.9 billion to cover Tokyo costs.
 

Long-term impact

It’s impossible to assess the long-term impact of the Tokyo Olympics, particularly in a sprawling City like the Japanese capital where change is constant. The pandemic erased any short-term tourism bounce. Local sponsors, who paid more than $3 billion to be linked to the Olympics, didn’t seem very happy, according to local reports.

Dentsu Inc., the giant Japanese advertising and public relations company, may have benefited. It directed marketing for Tokyo 2020, received commissions for lining up sponsors and has been linked to an IOC vote-buying scandal that was tied to Tokyo getting the Games.

The scandal forced the resignation of Tsunekazu Takeda in 2019, an IOC member who also headed the Japanese Olympic Committee.

The Games were hit with other scandals, including the resignation of Yoshiro Mori, the President of the organizing committee who made sexist remarks about women. The former Japanese Prime Minister stepped down five month before the Games opened.

Tokyo had billed itself as a “safe pair of hands” in its bid to get the Games.

Tokyo will also be remembered as the first Games that were postponed for a year, and then held mostly without fans in a so-called bubble.

The most important legacy is surely the $1.4 billion 68,000-capacity National Stadium designed by Japanese architect Kengo Kuma.

Matheson and Baade wrote, “The goal should be that the costs of hosting are matched by benefits that are shared in a way to include ordinary citizens who fund the event through their tax dollars. In the current arrangement, it is often far easier for the athletes to achieve gold than it is for the hosts.”

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