Sports Business: How Tokyo Games are a $ 15.43 bn subject for Japan, IOC

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International Olympic Council, the Organising Committee for the Tokyo 2020 Olympic Games and the Japan Government are determined to ensure that the Summer Games are not cancelled even as a postponement is imminent now.

Many stake holders will have a sigh of relief and Tokyo 2020 economic impact will be hard to bear for many.

Also Read: COVID-19: Tokyo 2020 to be Tokyo 2021 now, confirms IOC member

IOC member Dick Pound has all but confirmed that the Games will now be held next year. While the world Olympic governing body has asked four weeks for an official announcement, cancellation of the Games is completely ruled out.

IOC president Thomas Bach and Prime Minister of Japan Shinzo Abe have finally accepted the harsh reality that postponing the Tokyo 2020 Games is the only viable option now. Neither Japan, nor IOC can afford to bear the economic effect.

Till date, the Olympics have only been cancelled twice – in 1940 and 1944 – but that was due to the World War II.

If the Games are cancelled now, there will be a Tokyo 2020 Economic Impact of $ 15.43 billion (Japanese Yen 1,698 bn).

The German online statistics portal Statista has revealed the data of the high economic stakes on the Games, which will hit the Japanese Government, Insurance sector and stake holders hard.

Here are the details of threatened Economic Impact vis a vis expenses incurred till date.

HOST NATION JAPAN                                             

Hosting Olympics in the recent past has seen nations like Greece and Brazil struggling to overcome the financial burden of preparations and conduct of the Games. Japan had created a self-sustainable budgetary plan to meet the costs of the Games. However, those financial goals can only be achieved if the Games are completed. A cancellation would cost Japan alone $ 15.43 billion.

COVID-19 THREAT FOR TOKYO 2020 OLYMPICS
FEARED ECONOMIC LOSS ON JAPANESE ECONOMY
Feared Losers US $ Japanese ¥
Japanese Olympic Committee 5.48 603
The City of Tokyo 5.43 597
Japanese Business 3.16 348
Japan Central Government 1.36 150
Source: Statista / figures in billion

 

INSURANCE SECTOR

The insurance sector worldwide has sold protection covers to the various stake holders, which according Statista, will drain the sector of our $ 2.60 billion. Single largest bill would come for protection of the media rights and sponsorships.

COVID-19 THREAT FOR TOKYO 2020 OLYMPICS
FEARED ECONOMIC LOSS TO INSURANCE SECTOR
HEAD US $
TV Rights and Sponsorships 2,000
Hospitality Industry 600
Source: Statista / figures in million

 

SPONSORSHIPS

Tokyo 2020 has breached all Olympic sponsorship records with broadcast partner NBC booking sponsorship and advertisement deals worth a record $1.25 bn with 10% inventory still in hand. If the Games fail to take off, Tokyo 2020 Organising Committee and the broadcaster are tend to lose $2.15 billion by way of sponsorship, which according to Statista, have already been booked.

COVID-19 THREAT FOR TOKYO 2020 OLYMPICS
POTENTIAL SPONSORSHIP LOSSES
HEAD US $
Local sponsorship partners 900
NBC broadcast sponsorships 1,250
Source: Statista / figures in million

 

Other than the monetary implications, 11,000 athletes, 4,000 para-athletes and over 80,000 unpaid volunteers will be losing out a crucial lifetime experience or opportunity.

Also Read: Tokyo 2020: Canada confirms withdrawal for COVID-19 threat

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