Tokyo-2020: the IOC has insured itself against the risk of cancellation - France 24

Lausanne (AFP)

As the epidemic of the new coronavirus casts uncertainty over the holding of the Tokyo Olympic Games, which open on July 24, the International Olympic Committee, as since 2004, has insured against a risk of cancellation with consequences very heavy financial.

The first cancellation insurance for the Olympic Games taken out by the body dates back to the Athens Olympics in 2004, an innovation by the then president, Belgian Jacques Rogge.

As for the first Organizing Committee for the Games (Cojo) to have taken out such a guarantee, "it is that of Moscow in 1980, within the framework of a contract signed with Lloyd's of London", explains Frenchman Patrick Vajda , sports risk and insurance expert at SIACI Saint Honoré.

For the Tokyo Olympics, the IOC "is insured in case of cancellation of the Olympics like many international federations," confirmed a spokesperson. According to concordant sources, the IOC has taken out insurance with a premium of around 24 million USD from a group of several companies, including Swiss Ré, concerning cancellation risk.

- the Cojo too -

The host city contract, signed by Tokyo and which gives the IOC the power to cancel the Games if "the safety of the participants is seriously threatened", provides at the same time that the Cojo must "take out insurance" covering " 'all risks'.

But questioned by AFP, the Japanese organizers give no details, repeating that they "did not mention the cancellation of the Games".

"The covers for an event like the Olympic Games are tailor-made," explains Mr. Vajda, who has provided more than a dozen editions. "The principle is that of + any risk except +. All risks are indeed covered except those which are formally excluded and some of which can be redeemed".

"Two main risks can be redeemed: the risk of terrorism and contagious diseases," he said.

- the coronavirus is covered -

Cancellation linked to the coronavirus, the epidemic of which appeared long after the signing of the insurance contract, will therefore be covered.

But coverage of the cancellation of the Tokyo Games, which includes bombings and the earthquake, has focused attention more than ever as the epidemic spreads. Especially since the amounts involved are huge.

Expected revenues (the theoretical amount to be covered in the event of cancellation) amount to almost 5 billion USD, mainly from television rights, sponsors and ticketing. These revenues then make it possible to finance the National Olympic Committees, the International Olympic Federations and the IOC itself.

But a cancellation would have very serious consequences because the insurance would not cover all of these expected revenues. "The maximum that we can assure in cancellation is 1.3 billion dollars, even 1.5 billion," explains Mr. Vajda.

Consequently, the consequences would be serious for the Olympic movement, deprived of a large part of the resources which allow it to live during the 4 years of an Olympiad, even if the IOC has built up reserves of around 1 billion USD to make faced with such a possibility.

Broadcasters such as the American NBC, also insure against the cancellation, as do the IOC partners.

To date, neither the boycotts (in 1980 in Moscow and 1984 in Los Angeles), nor the SARS virus (in 2003) or zika (before the Olympic Games in Rio-2016) were right about the quadrennial meeting.

Only the world wars led to the cancellation of the Olympic Games planned in 1916 in Berlin or in 1940 in Sapporo (winter) and Tokyo (summer), and 1944 in Cortina d'Ampezzo (winter) and London (summer).

Far from the consequences of a hypothetical cancellation of the Olympic Games, a postponement, or of Games disputed behind closed doors for which the 4.5 million tickets already sold should be reimbursed, insurers had to cover claims related to OJ.

Thus, during the Moscow Olympics, American television channels, deprived of American athletes, were compensated. Four years later in Los Angeles, "a claim was also declared to the insurer" because of the Soviet boycott but it did not give rise to payment because "the Cojo could not demonstrate a financial loss, the American television channels that were a hit because of the presence of many American athletes in the finals, "said Mr. Vajda.

© 2020 AFP