The cost of the postponement for the Tokyo Olympics could reach about $2.8 billion, according to figures released Friday by the Tokyo organising committee, the Tokyo city government and Japan’s national government.
The numbers are in line with estimates made in Japan since the Olympics were postponed eight months ago. The games are now set to open on July 23, 2021, reports AP.
About two-thirds of the added costs are being picked up by the two government entities, with the other one-third going to the privately funded organising committee.
Few of Tokyo’s added costs — or the overall costs — are covered by the Switzerland-based International Olympic Committee, which relies largely on public coffers to hold its events. Its revenue is generated largely by selling broadcast rights and sponsorships.
“I think our biggest challenge is the additional costs,” Tokyo Governor Yuriko Koike said during an online news conference. “This is a crucial issue in order for us to prepare for the Olympics. We need to gain the understanding and sympathy of the people of Tokyo and the people of Japan.”
As the costs for Tokyo keep rising, it may reinforce scepticism about the wisdom of holding the Olympics in the middle of a pandemic. Recent polls show the Japanese public is divided on the issue of the Olympics, and any move to permit fans from abroad to enter despite a vaccine being on the horizon.
Japan has controlled the pandemic better than most countries with about 2,200 deaths attributed to COVID-19 in a country of 125 million.
The University of Oxford published a study three months ago that said the Tokyo Games are the most expensive Summer Olympics on record. And that research was done before the games were postponed by COVID-19.
Prior to the postponement, Japan said the Olympics would cost $12.6 billion. But a government audit last year said it was likely twice that much, and that was before the postponement. All but $5.6 billion is public money.
Tokyo said the Olympics would cost $7.3 billion overall when it won the bid in 2013 in Buenos Aires, Argentina.
The operational cost for the delay is listed at 171 billion yen, or about $1.64 billion at the present exchange rate. The organising committee and the Tokyo government share equally in covering the expenses. The national government will pick up a small portion.
The cost for coronavirus countermeasures is 96 billion yen (about $920 million) and will be covered solely by the governments.
Tokyo organisers also said they could add 27 billion yen (about $260 million) from a contingency fund to help cover added costs.
Toshiro Muto, the CEO of the organising committee, said new domestic sponsors were being sought to cover the rising expenses. Tokyo has already received a record of $3.3 billion from domestic sponsors — at least twice as large as any previous Olympics. Muto said the IOC had agreed to waive a royalty fee it collects of 7.6 per cent on any “additional sponsorships.”
Muto also said organisers did not expect to receive $650 million from the International Olympic Committee, which IOC President Thomas Bach suggested months ago it might chip in to help Tokyo.
“There was an expectation that maybe this was for Tokyo,” Muto said. “But Tokyo’s costs are Tokyo’s costs.”
Several months ago, Tokyo organisers announced they pared $280 million from their expenses, removing frills like hospitality parties and scaling back in many areas. However, the full complement of 11,000 Olympic and 4,350 Paralympic athletes are expected to attend. They will be joined by tens of thousands of officials, judges, VIPs, media and broadcasters.
Gskuji Ito, the chief financial officer of the Tokyo organising committee, said organisers expected to be paid 50 billion yen ($480 million) in postponement/cancellation insurance it had secured.
Muto and organising committee president Yoshiro Mori both said they know some expected larger cuts and fewer added expenses.
“Whether you believe the glass is half-full or half-empty,” Muto said, “whether your feel our efforts were enough, that’s up to you to decide.”