$15.4 billion, that is the numeric answer for anyone questioning why the Tokyo Olympics have not been canceled despite the rising covid cases and pushback from locals in Japan.
The Tokyo Olympics are touted to be the most expensive summer Olympics till date. The bill however is actually much higher; as the $15.4 billion does not account for sponsorship losses that may have to be incurred if the already spectator-less games are altogether canceled.
Companies have spent more than $1 billion on ads timed to the Tokyo Games, which will take place in empty arenas as the pandemic lingers. But these sponsors are also feeling the backlash and are retreating taking in some losses. Panasonic, a top sponsor, will not send its chief executive to the opening ceremony, . Neither will Toyota, one of Japan’s most influential companies, which also delivered a blow to the Games on Monday when it said it had abandoned its plans to run Olympics-themed television commercials in Japan. Also According to news reports, the Olympic Committee may have to refund TV rights fees of around $4 billion if the event is not held at all. Already postponing the event has cost a whopping $3 billion, this is when the merchandise et al has not been rebranded and is being used with the signage of 2020 itself.
There is also a large insurance cost at play, according to Reuters, the International Olympic Committee (IOC) takes out about $800 million worth of insurance to cover most of the $1 billion it invests in every host city. On top of that insurance, local Tokyo organizers took out a $650 million policy and another $600 million for hospitality.
But it is not just the International Olympic Committee that has finances to worry about. The Games are also important to individual participating nations and their National Olympic Committees. According to The NYT, $549 million is distributed among these organisations, and for most this is a matter of survival. Without the Games being held, there may not be a payday. The money assumes added significance during the pandemic when the sporting schedules around the world have taken a big hit, and most of the events that have taken place have seen no or reduced spectators.
So with a total cost of over $20 billion, the balancing act for the Olympic Committee has been a tough one.