Share article:
Share article:

Will the Tokyo Olympics be successful behind closed doors?

Friday, 16 July 2021
This is an opinion article by an external contributor. The views belong to the writer.
© Belga

It was 2012 when Shinzo Abe embarked on his journey as Prime Minister of Japan. Among the first directives of the Japanese Prime Minister was the Olympic dream: to defeat the favourites Istanbul and Madrid and declare Tokyo as host city for the 2020 Games.

Right from the start, the prediction of Japan’s victory fuelled a rather defeatist climate. However, the goal was too important: bringing the Olympics back to the Far East island would have led the country through a social and economic rebirth after decades of economic stagnation.

To be able to reassert itself on a global level, to open its doors to the world, to close the circle opened in 1964 when the Tokyo Olympic Games meant rebirth, innovation, and redemption in the affirmation of modernity and democracy. So Abe has built an impeccable diplomatic structure. He picked up the reins of the project, gave Japanese officials a clean slate, and achieved the necessary global support.

Tokyo 2020 is a reality and the prime minister steals the stage at the Rio 2016 closing ceremony by showing up dressed as Super Mario, coming out of a green tube.

The Covid Effect on the Tokyo Olympics

The unexpected global pandemic, however, erased any sense of Japan’s dream for redemption. Do these Olympics really serve Japan now? How will a city still paralyzed by the state of emergency and economic crisis that has consumed the country for 18 months be able to recover? How will the Olympics be able to relaunch a Japan that will not be able to welcome any foreign fans, that will not be able to fill the stadiums, that will keep all the athletes in a bubble without giving them the chance to even meet the public?

Even Emperor Naruhito said he was worried about the situation: more than half of the population of Tokyo wants the Olympics to be canceled or postponed. The message of economic revival no longer makes sense, the comparison with 1964 rings hollow and Abe himself is no longer in office. The echo that would also serve to highlight other issues dear to Japan (such as the reconstruction of the country after the tragedy of the earthquake and tsunami of 2011, or the use of hydrogen to power the Olympic Village) will not be there.

Suga’s bet

This prediction was averted by the current deputy prime minister, Yoshihide Suga. However, the games have been politically presented as a symbol of global triumph over the Sars-Cov-2 pandemic: “The world has fought against the great difficulties of Covid-19 and has overcome them together. We would like to send this message from Japan to the world,” Suga said in June. “To hold the games here is to send a message of hope and courage.” For the Prime Minister, these Olympics are actually a calculated political gamble.

The hope is to ride the wave of gold medals from Japanese athletes, reach a higher threshold of approval in the polls and gain electoral success in the next elections scheduled for the fall. What Suga didn’t foresee, however, was criticism from the opposition and mutiny from Japanese sponsors: the latter invested more for the Tokyo Olympics than any other sporting event in history, with little marketing benefit in return.

Tokyo 2020 raised more than $3 billion from Japanese sponsors alone, leaving aside the global sponsorship revenue that goes to the IOC.

Renegotiation and sponsor numbers

The International Olympic Committee’s decision to postpone the Olympics for 12 months, rather than cancel them, has led to a rush to renegotiate thousands of commercial contracts-from hotel reservations to sponsorship agreements.

Top-tier sponsors, who paid about $100 million for the original deals, were asked to pay another $10 million after the games were postponed. According to rumors from within the business environment related to sponsorships for the Olympics, the other business partners have been asked to pay about $5 million each.

The sponsoring companies are having to deal with the damage to their image, those that have invested in products and marketing linked to the spectators have been overwhelmed by almost useless campaigns given that participation in these games has been enormously limited. For broadcasters, the situation is better.

Nearly three-quarters of IOC revenues come from marketing sports rights: NBC, which owns them in the United States, reported that it sold more than $1.2 billion in advertising on images of the games, more than it did for the Rio Olympics.

Tokyo Olympics in figures

The original budget for Tokyo 2020 was 1.35 billion yen equal to approximately 12.2 billion dollars: of this 600 billion yen came from the city, 150 billion yen from the national government, and the rest from commercial revenues. After the postponement of the event, the budget was revised and reshaped to 1.64 billion yen: largely funded by the public purse.

With the decision to hold the games behind closed doors, Tokyo taxpayers are close to repaying 90 billion yen in ticket sales. Meanwhile, Japan’s Board of Audit has confirmed that official budgets underestimated government spending on the Olympics. The true cost to Japanese taxpayers may never be made clear, but it is likely to be estimated at a figure in excess of $25 billion.