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Olympic organizers have pointed to the postponed Tokyo Games as a potential symbol of the world overcoming the coronavirus pandemic. “I believe that these Olympics are going to have great historical significance,” Yoshiro Mori, the president of the Tokyo organizing committee, said after confirming that the International Olympic Committee and the Japanese government had agreed to reschedule the competitions for July 23–Aug. 8, 2021, exactly one year after what was planned.
But the Olympics require a massive mobilization of locals, from municipal departments and corporations to manual laborers and service workers. “The logistics mobilization is massive, and it is far more complex than just making sure that the venue is ready one year later,” said Harry Hiller, a professor of sociology at the University of Calgary who studies the impacts of the Olympics on host cities.
“If I had an hour to spare with you and you had the space to fill, I don’t think I could even begin to get across the enormity of this project,” World Athletics president Sebastian Coe told CNN.
The enormity of the challenge and the intense uncertainty surrounding the trajectory of COVID-19 puts the Olympics and Tokyo in a uniquely risky situation. It’s unlikely that a vaccine for the virus will be ready by next summer. It’s far from clear that a year from now, the world will be any more ready for an international gathering the size of the Olympics—which is expected to bring 11,000 athletes and more than 600,000 visitors to Tokyo.
Some believe that outright cancellation would be more prudent. “The spreading coronaviral pandemic is an Olympic game changer, and all of the available options are costly in the short run,” said John Vrooman, a Vanderbilt University professor and expert on sports economics. “It is time to cancel the games.” Other experts believe that Tokyo should move forward with postponement.
Either way, there’s no doubt that immense logistical, economic, and psychological challenges lie ahead for the organizing committee and the city of Tokyo—challenges that must be faced under the looming risk that an unabated coronavirus pandemic may ultimately compel organizers to cancel the Olympics, regardless of preparations.
The sheer price tag of holding the Olympics and moving them back a year is staggering. Revenue from sponsors, ticket sales, marketing, and IOC contributions has thus far covered just $5.6 billion of operating costs. TV revenue was expected to bring in $1.2 billion. Meanwhile, the games’ organizers released a total budget in December showing $12.6 billion in costs for putting on the games, but according to Vrooman, a recent audit reveals that Japan could end up spending more than $26 billion.
Katsuhiro Miyamoto, an emeritus professor of economics at Kansai University, estimates that a one-year postponement will likely cost $6 billion on top of that. The IOC may cover a portion of these costs, but the vast burden will fall onto Japanese taxpayers.
The costs of a postponement come from maintaining venues, storing gear and materials, rehiring staff, and duplicating marketing efforts, all of which will need to be spent amid the broader economic fallout and recovery efforts from the pandemic. A senior official in the Tokyo Metropolitan Government predicted that Tokyo would see a drop of $9 billion to $18 billion in tax revenue due to the virus.
Toshiro Muto, CEO of the Olympic organizing committee, said that Tokyo is currently holding discussions with all of the privately owned Olympics venues—but that some problems have already become apparent. Many of the venues have already been booked for different events next year, leaving a plethora of scheduling conflicts to be resolved.
“Our plan was to return all of the Games venues [to their owners] once we had finished,” Muto told the New York Times. “So to hire them again means we have to pay additional costs for them, and we might have to hire people until next year.”
In 2017, Tokyo released a comprehensive plan for how each of the Olympic venues was to be used and adapted before, during, and after the Olympics, but an official with the Tokyo Metropolitan Government told me that there is not yet a plan for how the postponement will affect their scheduled opening dates—whether their opening will be delayed until the Olympics, or if they will open for other uses within the next year.
Tokyo had already secured the 80,000 volunteers required to host the games. The organizing committee plans to ask all volunteers if they are willing to have the same role and schedule next year to reconfirm participation as quickly as possible. With 36 percent of volunteer applicants having come from overseas, that could be an open question for many.
City and Olympic employees will need to continue in their roles for another year as well. Hiller pointed out that hundreds of thousands of employees will have their schedules disrupted. “Virtually every city department—whether it’s recreation, roads, or transportation—is geared for this specific time. Now they have to reschedule vacations and ensure for another year that facilities and equipment [remain] as new and polished as possible.”
Outside the official operation, many businesses in Tokyo that were counting on the boost expected from the Olympics have been hammered by the coronavirus. Imperial Hotel, a company that operates six hotels throughout Japan and three in Tokyo, saw its occupancy rate in March drop 60 percent from last year. A postponed Olympics has made matters even worse.
The impact extends far past tourism and hospitality. Thousands of local businesses were preparing to release special products and campaigns timed to the Olympics.
Grapestone Co. Ltd., which sells banana-shaped sponge cakes, spent a year developing an Olympic-themed “Tokyo Banana” confection. Now vendors are quickly pulling out. “We’ve never seen such a dramatic fall in sales,” spokeswoman Yukiko Ohno told Japan Today.
Private sponsorship contracts for the games, cumulatively worth $5.6 billion, are set to expire at the end of the year and will need to be renegotiated as well.
“We would like to ask [our sponsors] for extensions,” Muto said. “I’m not hearing they have any specific objections to this. And [as to] whether we would like to ask them for more contributions—nothing has been decided.”
However, far from upping their investment, Japanese companies may seek revenue or reimbursement for the delay. “How major sponsors will be paid and making sure they are satisfied with what they will receive, compared to what they had previously bargained for in these agreements, is a major consideration,” said Irwin Kishner, co-chair of Herrick, Feinstein LLP’s sports law group.
The Olympic Village, designed to house more than 10,000 athletes, is due to be converted into luxury apartments—many of which are already sold and slated to begin occupancy before 2023. A representative at Mitsui Fudosan, the corporation leading the real estate project, told me that “we cannot answer [how to address the postponement] at this point.” Sales of flats and showroom tours were suspended as of earlier this month.
Around 4.5 million tickets have been sold for the Olympics. Tokyo told the press that it will be issuing full refunds in the event ticket holders cannot attend the games next year and has suspended the previously planned spring ticket sales.
The swimming world championships in Japan and the track and field world championships in Oregon were both scheduled for early August 2021, overlapping with the Olympics. So far both competitions have agreed to find alternative dates. Media partners will also need to work on a revised schedule.
Beyond these hurdles involving dollars, labor, infrastructure, and contracts, the one-two punch of the coronavirus and the resulting postponement will also require an unprecedented commitment from the organizers and athletes to overcome the fatigue, fears, and potential health hazards that will persist over the next year.
“By the time you get to the end of that seven-year journey [of organizing the Olympics], your teams are running on empty,” said Coe. “I am hoping there is a recognition that there is exhaustion suffused with massive disappointment.”
Then there are the politics. Canceling the games altogether was widely viewed as a disastrous outcome to be avoided at all costs. Japanese Prime Minister Shinzo Abe in particular has a strong political impetus to make sure the games happen no matter what.
“These Olympics are deeply personal [to Abe],” said Kristen Jaconi, director of the risk management program at the University of Southern California Marshall School of Business. “His grandfather, a former prime minister, helped bring the first Olympics to Tokyo in 1964. These Olympics were to be a capstone of Abenomics, a capstone of his legacy. Prime Minister Abe is determined to see these games through. His only viable opponent is the coronavirus.”
While there were significant issues to be addressed even before the virus struck, Japan was ready to go in 2020, and experts predict that the city will be ready again in 2021. Tokyo, an advanced city with preexisting infrastructure, was equipped to be one of the rare economies able to potentially earn a profit off the games. The costs of a postponement throw a wrench in that forecast.
But the far deadlier wrench is COVID-19. “The uncertain future of the Tokyo 2020 Games is out of the IOC’s control and depends on the unpredictable course of the coronavirus and the guidelines of the World Health Organization,” said Vrooman.
Japan’s commitment means that Tokyo is all in—for good or ill. The city and organizers have no choice but to start executing on the daunting list of logistics and keep on hoping that the pandemic comes to an end.
“This is a prayer that we have,” Mori said, “and I do believe that someone is going to listen to our prayers.”