Tokyo Olympics: in 2021, less grandiose and more expensive Games

Text by: Farid Achache Follow

As Japan entered an economic recession, the International Olympic Committee freed up € 740 million to deal with the consequences of the coronavirus crisis. The envelope will be devoted largely to the postponement of the Tokyo Olympics to 2021 which should cost several billion euros.  

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On March 24, the IOC announced the postponement by one year of the Tokyo Olympics initially scheduled from July 24 to August 9, 2020, a first for the modern era Olympics in peacetime. The Tokyo Games are now rescheduled from July 23 to August 8, 2021.

This postponement will lead to additional costs which are still very difficult to assess, which will have to be shared between the IOC and the organizing committee (Cojo). To minimize them, the IOC and the Cojo "  are in close contact  " with the working group created for the occasion. "  We are not ruling out any leads in order to reduce costs while maintaining the spirit of the Games and the quality of the competition,  " said Thomas Bach, President of the IOC.

Review what is essential

"  The Games we have in a year may not be the same as the classic Olympic and Paralympic Games we have experienced in the past, " said Toshiro Muto, General Manager of Tokyo 2020. " We need to review what's essential, asking us what are the really essential elements  ”, he adds.

The main difficulty of this postponement is to guarantee for one more year the availability of the competition sites and the Olympic Village, whose accommodation was intended to be sold just after the closing of the Olympic Games.

The list of budget cuts promises to be long. The cost of the opening and closing ceremonies will no doubt be lowered. Other sectors affected: food for athletes and transport. The services offered to officials and the expenses of IOC members could be greatly reduced. The Olympic torch relay will certainly be less spectacular. All of these savings will also allow for the upkeep and maintenance of all sports facilities until the summer of 2021.

"  For the postponement, it is necessary to finance one more year the organizing structure of the Olympic Games, to compensate the promoters for the delayed deliveries of the programs planned in post-Olympic period (offices, housing ...)", also explains the economist Christophe Lepetit , in charge of studies at the Center for sports law and economics (CDES) of Limoges.

Recession in Japan

Japan fell into recession for the first time since 2015 and GDP fell 0.9% in the first quarter of 2020 compared to the fourth quarter of 2019, when it had already contracted by 1.9%. To make things easier, the “land of the rising sun” will have to sit on all the cash inflows that were scheduled with the arrival of hundreds of thousands of tourists this summer. And the global economic situation, very uncertain in the coming months, could have negative consequences on the number of visitors expected in 2021. The Japanese tourism sector contributes 7.4% of Japanese GDP.

According to the latest figures published, the budget for the Tokyo Olympics must now be set at 12.6 billion euros shared between the Organizing Committee (Cojo), the government and the city of Tokyo, without the cost of the postponement ( estimated between 2 and 5 billion euros).

As a reminder, in December 2018, the organizing committee of the Japanese games had promised that it would not exceed an envelope set at 10.5 billion euros. When it applied , Japan announced that Tokyo 2020 would cost around 7 billion euros.

The heavy bill of the Games

The recent announcement by the World Health Organization that the new coronavirus could "  never disappear  " is also enough to shake the organizers of Tokyo 2020 and the IOC. Japan is currently more spared from the Covid-19 pandemic than some European countries or the United States, with 16,000 confirmed cases and 749 deaths.

Before the Covid-19 crisis, the overly heavy bill of the Games could dissuade future candidate cities, against a background of citizens' reluctance to bear the cost of such an event. Hence the attribution of Paris 2024 and Los Angeles 2028 at the same time.

The Covid-19 pandemic will " undoubtedly  "  cause "  cost overruns  " on the budget for the Paris 2024 Olympic Games, Sports Minister Roxana Maracineanu acknowledged in early May. Who will now dare to embark on such an adventure for 2032, after this planetary crisis of the Covid-19 and its traumas?

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