Olympics delay to cost Japan organisers $3.8b

Olympics delay to cost Japan organisers $3.8b

TOKYO • The postponement of the Tokyo Olympic Games until next year because of the coronavirus pandemic will cost Japanese organisers an additional 294 billion yen (S$3.8 billion), the organising committee said yesterday.

Organisers have been assessing the financial impact of the delay since the Japanese government and International Olympic Committee (IOC) decided in March to push back the Games for the first time until next July.

Operational costs related to the delay will run to around 198 billion yen, while Covid-19 countermeasures, including the implementation of a testing system, and procuring equipment for infection control will cost an extra 96 billion yen.

The virus countermeasures, however, will be fully covered by the Japanese government to the tune of 56 billion yen and another 40 billion yen from the Tokyo metropolitan government.

Tokyo 2020 organisers are also falling back on a contingency fund of 27 billion yen detailed in last year’s budget to cover the costs, while seeking fresh funds via sponsorship and insurance claims.

The Tokyo metropolitan government is expected to pay a total of 120 billion yen, the organising committee 103 billion yen and the Japanese government 71 billion yen, organisers said.

The IOC has previously said it will contribute US$650 million (S$865.8 million) towards covering postponement costs and this sum is separate from the costs announced by Japanese organisers.

“Tokyo’s costs are Tokyo’s costs,” Tokyo 2020 chief executive officer Toshiro Muto said. “Tokyo 2020’s (allocation) is revenue that we can secure.

“Within this revenue, we have additional sponsorship that we have requested from partners and we also have insurance.”

Tokyo 2020 president Yoshiro Mori added that the IOC had agreed to waive any additional royalties accrued by new sponsorship deals secured by the organising committee.

“I had a video conference (call) last night with IOC president (Thomas) Bach,” said Mori, who was wearing a red-and-white mask with the words “One Team” on the side, the slogan of the Japanese rugby team during last year’s World Cup.

“President Bach expressed his strong determination that the IOC and us should work as one team and cooperate to ensure the success of the Games.”

The last official budget given by the organising committee last December, months before the Games were postponed, was US$12.6 billion.

Having overshot the budget, more spending could harden public opinion in the country, especially as the bulk of the costs are expected to be borne by Japanese taxpayers.

Polls done as recently as August still show a sizeable number of respondents in favour of another postponement or cancellation.