Olympic cancelation effects would reach around globe
TOKYO — The tentacles of canceling the Tokyo Olympics — or postponing or staging it in empty venues — would reach into every corner of the globe, much like the spreading virus that now imperils the opening ceremony on July 24.
The International Olympic Committee and local organizers say the games are on, but the clock is ticking.
The fate of the Tokyo Games touches 11,000 Olympic and 4,400 Paralympic athletes, coaches and sports officials, local organizers, the Japanese government and national morale, international broadcasters, fans and world sponsors. Add to this hotels, airlines and taxi drivers — and even 80,000 unpaid volunteers who will miss a oncein-a-lifetime opportunity.
The Olympic brand could be damaged, although the Switzerland-based International Olympic Committee may be among the least affected parties financially if the games are called off. The IOC has been resolute in its message, although it has a several-month window to decide.
Kazuhiro Tateda, an expert on infectious diseases and a member of a Japanese government panel, said the virus may not die out quickly.
“Unlike the flu that disappears with warmer weather, the response to the new coronavirus, I think, will have to continue for half a year or a year,” Tateda told Japanese broadcaster NHK on Tuesday.
The IOC has ample financial safeguards against cancellation, which has happened only in wartime since the modern Olympics began in 1896. Its latest annual report shows it has almost $2 billion in reserve that could cover running costs until the 2022 Winter Olympics in Beijing.
The IOC’s annual reports show it paid almost $14.4 million in an insurance premium to protect against canceling the 2016 Rio Olympics and $12.8 million for a policy to cover the 2018 Winter Olympics in Pyeongchang, South Korea.
Wolfgang Maennig, an Olympic rowing gold medalist who teaches sports economics at Hamburg University, said the losses will be shared.
“Insurance companies will have to pay a large amount of the losses of the IOC,” Maennig said in an email to the AP. “The rest will have to be borne by the IOC.”
Victor Matheson, a sports economist at the College of the Holy Cross in Worcester, Mass., said athletes are the most vulnerable. The Olympics feature 33 sports, and many of the smaller ones have a limited following until games time.
“For athletes, their career length isn’t long and in many sports success in the Olympics is your one shot at a financial return,” Matheson told the AP.
Matheson said losses by hotels and other service businesses are unlikely to be insured. The billions on government spending on venues looks like a risky investment. The loss of the Olympics would negate the difficult-to-calculate goodwill that Japan and Tokyo might have won.
Tokyo is officially spending $12.6 billion to organize the Olympics, although a national government audit office says it’s at least twice that much. The local organizing committee budget of $5.6 billion is private money, with the rest coming from Japanese taxpayers. About $1 billion in the local operating budget is to come from ticket sales, which would be lost if the games go ahead without fans in empty stadiums.
“Some combination of the IOC, the broadcasters, and the insurers will lose big,” Matheson said. “That loss is coming out of someone’s pocket depending on how all of the contracts are written.”