Tokyo 2020 Olympics hold off causing ripple effect
Tokyo 2020 head honcho Toshiro Muto acknowledged recently that owing to the rescheduling of the Summer Olympic Games to 2021 due to the coronavirus pandemic, the organizers are facing “massive” additional costs in securing the facilities where the events will be held in the future.
The Tokyo Olympics will now be held in 2021 between July 23 and August 8. The dates were decided on Monday in a call between the International Olympic Committee (IOC) President Thomas Bach and Tokyo 2020 boss Yoshiro Mori. After holding out for weeks, local organizers and the IOC last week postponed the Tokyo Games under pressure from athletes, national Olympic bodies and sports federations. It’s the first postponement in Olympic history, though there were several cancellations during wartime.
Muto conceded as such in an event held in the Japanese capital wherein the Tokyo 2020 New Launch Task Force met for the first time after the recent announcement that the Olympics, initially scheduled for July 24 to August 9 2020, would be postponed for the first time in peacetime years due to the severe global effects of the COVID-19 outbreak.
To tackle the “unprecedented challenge” of rescheduling the Olympic and Paralympic Games, Tokyo 2020 has created the ‘New Launch Task Force’ to oversee the rescheduling of the Tokyo 2020 Games in 2021.
Both Tokyo Organizing Committee President Yoshiro Mori and CEO Muto have said “the cost of rescheduling will be “massive” — while media reports estimate billions of dollars — “with most of the expenses to be borne by the Japanese taxpayers”.
Muto promised transparency in calculating the costs, and testing times deciding how they are divided up. Muto questioned, “Since it (the Olympics) were scheduled for this summer, all the venues had given up hosting any other events during this time, so how do we approach that?”
“In addition, there will need to be guarantees when we book the new dates, and there is a possibility this will incur rent payments. So, there will be costs incurred and we will need to consider them one by one. I think that will be the tougher process,” he added.
Katsuhiro Miyamoto, an emeritus Professor of Sports Economics at Kansai University in Osaka, Japan, puts the costs as high as $4 billion. That would cover the price of maintaining stadiums, refitting them, paying rentals, penalties and other expenses.
Japan is officially spending $12.6 billion to organize the Olympics. However, an audit bureau of the Japanese Government says the costs is twice that much. All of the spending is public money except $5.6 billion from a privately funded operating budget.
Earlier this month, the Tokyo 2020 Organising Committee revealed that all new permanent venues for the Games had been completed. The Tokyo Aquatics Centre was the final permanent venue to be completed on schedule in the end of February.
Muto informed that apart from the 43 competition venues that will need to be secured once again, thousands of existing contracts spanning the likes of accommodation, security and ticketing will also have to be secured.
He informed, “We need to secure the facilities. Not only the venues, but the athletes’ village, training sites, storages and what not. We need to assess whether they will be available when we need them next year.”
“There will be additional costs that come with this – and we expect it will probably be massive. We are dealing with the postponement of the Games, which has never happened in history. The task is daunting,” Muto asserted.
Tokyo 2020 President Yoshiro Mori added, “In short, what we have been working on for seven years came to a screeching halt just as it was about to start – and now we have to build it back again. We are going to have to cram into about six months, what we achieved in seven years so it will be difficult.”
As per John Coates, Chair of the IOC’s Coordination Commission for Tokyo 2020, a Summer Games would need to avoid clashes with 2021’s World Athletics Championships and World Aquatics Championships. Both World Athletics and the International Aquatics Federation (FINA) have already said they are ready to reschedule their events to 2022, currently set to be held in Eugene, Oregon (US) on August 6-15, 2021, and Fukuoka, Japan from July 16 to August 1, 2021, respectively.
World Athletics also confirmed that it is working with organizers of its 2021 World Championships in Oregon on new dates for 2022. The event is scheduled for next summer but this is set to be pushed back a year following the Tokyo 2020 postponement.
World Athletics said it supported the new dates for the Olympics, stating that it gives athletes the time they need to get back into training and competition.
Muto added, “We have to decide when the opening ceremonies for the Olympics and Paralympics will be. Without that, there are a lot of things we simply cannot do.”
Organizers for Tokyo 2020 said they will work to make certain that tickets will remain valid for the rescheduled Games next year, which will now take place from July 23 to August 8, 2021.
The Paralympic Games will then follow from August 24 to September 5, 2021. The new dates were confirmed in a joint statement released by the International Olympic Committee (IOC), International Paralympic Committee (IPC), the Tokyo 2020 Organising Committee, the Tokyo Metropolitan Government and the Government of Japan.
More than 4.4 million Olympic tickets were sold in Japan following two domestic lotteries, and Tokyo 2020 has now assured those ticketholders that they would be refunded if they cannot adjust with the new dates that correspond to their tickets.
The announcement comes after Tokyo 2020 was officially postponed last Tuesday due to the coronavirus menace which has the world in its grip. The decision for the new dates was taken on three main considerations: To protect the health of athletes and everyone involved in the Games, and to support the containment of Covid-19; to safeguard the interests of athletes and of Olympic sport; and the global international sports calendar.
It is hoped the new dates will give the relevant health authorities enough time to tackle with the ever-changing landscape and disruption caused by COVID-19. The new dates will also allow more qualification time for athletes. The Games will still officially be known as Tokyo 2020.
Commented Bach, “I want to thank the International Federations for their unanimous support and the Continental Associations of National Olympic Committees for the great partnership and their support in the consultation process over the last few days.”
He added, “I would also like to thank the IOC Athletes’ Commission, with who we have been in constant contact. With this announcement, I am confident that working together with the Tokyo 2020 Organising Committee, the Tokyo Metropolitan Government, the Japanese Government and all our stakeholders, we can master this unprecedented challenge. Humankind currently finds itself in a dark tunnel. This Olympic Games Tokyo 2020 can be a light at the end of this tunnel.”
Tokyo Governor Yuriko Koike remarked, “In consideration of the global coronavirus outbreak, we need a certain timeframe before we fully prepare for the delivery of Games that are safe and secure for the athletes and spectators. Also, the preparation for the new dates will go smoothly, as the dates match with the same timeframe as the original competition dates, corresponding with ticketing, venue staffing, volunteers and transport.”
Koike further noted, “Therefore, I believe that celebrating the opening of the Olympic Games Tokyo 2020 on July 23, 2021, is ideal. The athletes, volunteers, torchbearers and local municipality Governments have been concerned about the situation. Since we now have concrete new dates to aim for, the Tokyo Metropolitan Government will commit all its resources, and work closely with the Tokyo 2020 Organising Committee, the national Government and other stakeholders to fully prepare for the delivery of the Games that are safe and secure.”
The Olympics being rescheduled to 2021 will have tremendous consequences for the economies of Tokyo and Japan. In fact, the Tokyo 2020 cancellation comes as a double whammy for Japan – economic and psychological toll. Japanese taxpayers indeed have to cough up a lot of money. Fans are also a disgruntled lot as everybody was looking forward to the sporting showpiece.
The entire stadia and arena building job for the Tokyo Olympics has been a smooth affair. The budget for building the facilities has grown from the original plan of around $7 billion to at least double that, and perhaps more. However, there is a huge cost attached to keep things on hold for a year which, obviously, is not in the original budget. Somebody will have to be on the hook which, obviously, will be the taxpayers.
Observers say that the Central Government and the Tokyo Government will definitely not want to loosen their purse strings more as they also have to deal with the current coronavirus situation.
The coronavirus situation in Japan is slowly turning worse with latest figures showing 1,953 coronavirus cases and 56 deaths. The chorus is growing for COVID-19 state of emergency in Japan.
Burning a huge hole in Japan’s pocket
Massive investments have been poured into hosting the Games. For example, the New National Stadium, built by Azusa Sekkei Co., for US$1.4 billion has already been completed in November last year.
Apart from the site for the Olympics and Paralympics, most other real estate investments to gear up for the Olympics have been completed and have largely been paid for or financed.
The total costs of the Tokyo Olympics is said to have risen beyond US$12 billion, yet the City of Tokyo alone will spend another US$7.4 billion on projects, directly and indirectly related to the games such as installing barrier-free facilities for the Paralympics, training programs for volunteers, and advertising and tourism plans.
Media reports stated that the Olympics would cost Japan about US$28 billion in total – almost quadruple of the US$7.3 billion declared when Tokyo won the bid in 2013. Only US$5.6 billion of operating costs have been covered with revenues from sponsors, ticket sales, marketing, and IOC contributions.
Due to the coronavirus scourge, the economy globally is bleeding and Japan is no exception. Japan was hoping to (cash) in on the seven-years-in-the-making Tokyo Olympics 2020. But, everything has been put on hold now with the rescheduling to 2021 announced.
The delay of the Olympics is expected to lower economic growth by 0.5 to 0.8 percentage points.
Even when the Olympics will finally be held in 2021, financing the gap of a year will add to the cost. The costs of maintaining venues or storing materials are high. Some estimate the cost of the delay at US$2.6 billion – almost half as much an average Olympic Games between 1960 and 2016 cost.
Despite the huge economic setback, hope still floats that Olympics will be held in 2021 and tourists will visit Japan with a vengeance once again.
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