Tokyo Olympics: a considerable shortfall for the sponsors and the city
Audio 03:37
A masked man walks past a logo of the Tokyo Olympics on July 15, 2021 in the Japanese capital.
(Illustrative image) © Behrouz Mehri / AFP
By: Anne Verdaguer Follow
8 mins
As the Olympic Games open this Friday in Tokyo, the shortfall is estimated between 2 and 2.5 billion euros due to the closed door imposed by the organizers to prevent the spread of the Covid-19 epidemic .
A decision that follows the state of emergency implemented in the Japanese capital until August 22.
Publicity
This in camera will have consequences on ticketing and merchandising: it should be noted that the average basket of the spectator is normally between 50 and 100 euros.
There is another element that is more difficult to quantify: it is called
marketing activation
.
Clearly, the number of potential customers that each brand can reach and retain during these kinds of large-scale events.
We are talking here about sixty Japanese companies that are involved in the event for sponsorships and a dozen large multinationals
Another unknown, according to Michael Tapiro, founder of the Sports Management School, is the brand image of these large companies, because "
you have to imagine that an empty stadium will already give a very dismal tone to the competition while the Japan is undergoing a very violent fourth wave and that, sorry to put it that way, but it is not something very salesy.
"
Finally, the bill for the city of Tokyo, it remains an unknown, the Japanese capital which alone weighs 19% of the Japanese GDP.
Cancellation of the competition in question
One of the members of the Olympic committee believes that "
Japan has already missed the opportunity to cancel them
".
A message also hammered out by the organizers and the Japanese government.
In a poll, the Japanese believe over 80% that these Olympics should not take place.
Japan has already disbursed 15.5 billion euros for these games because of the additional cost linked to the postponement of one year;
it is already the highest bill in the history of the Olympics
In reality, there will be little impact on the Japanese economy, which is already doing well.
The level of economic activity is already low in Japan due to the pandemic and the country relies on its industrial power and its export strength to maintain its place as the 3rd world power.
The IMF has also raised its growth forecast this year to 3.1%.
As for the markets, they had anticipated this in camera, even if some local sponsors, such as the brewer Asahi, or the equipment manufacturer Asics, the action has already lost 2% last Friday.
On the other hand, for tourism in particular, the impact will not be negligible.
In the restaurant and hotel sector, we had already anticipated the event by investing.
The state of emergency in Japan will also force restaurants to close at 8 p.m.
According to Capital Economics, spending would not have exceeded 0.02% of Japanese GDP.
The impact of the lack of spectators will therefore not be significant enough to rock the Japanese economy.
What about the future Paris Olympics in 2024?
If we are to believe sports economist Michael Tapiro, the sponsors will no doubt already hope for a downward renegotiation of their contract in Tokyo given the lack of visibility and the inability to attend the event.
For the Paris 2024 Olympics, it is likely that the scenario could be the same.
An Olympiad often exceeds 100% of budget estimates.
And the Covid-19 risks playing the spoiler again.
Paris estimates that the budget spent for the Olympics will not be higher than 7 billion euros and that the games in 2024 will bring in 10.7 billion euros.
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Olympic Games
Japan
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