Just how much Japan has spent to stage the Olympics isn’t exactly known. The official tally is US$15.4-billion. Government audits suggest the true number could be double that.
Whatever the true cost, much is on the line for this year’s Summer Games.
Countries see the Olympics as an unparalleled channel onto the world’s television screens. The Olympics itself draws its lifeblood from broadcast revenues that only flow if the competition takes place. Athletes spend years preparing to compete for their national flag. And in the midst of an international pandemic, an event that touches the entire world has consequences for international travel, and whether it may one day be possible for the modern jet age to stage a return.
The decision to proceed with the Olympics this summer after postponing in 2020 was controversial, not least among a Japanese public that remains deeply opposed to holding such a large event in the midst of a pandemic. As the opening ceremony draws near, here’s a look at what’s at stake in an Olympics almost certain to be remembered as the COVID Games.
The bargain at the heart of any Olympics is an agreement by one country to spend enormous amounts of money building athletic facilities in exchange for weeks of global attention. Some 4.7 billion people tuned in to the 2008 Beijing Games.
It is as much a national branding endeavour as it is an athletic competition. The spending is high, but so is the exposure.
For Japan, the Tokyo Olympics promised a chance to “show the world a place with two faces, new and old, in Japan and Tokyo,” said Kaori Sato, a branding expert who is a planner at ITP Communications.
Olympic planners wanted to show off an ecologically friendly Games; advertisers in the country saw value in showing off what Ms. Sato described as “traditional Japanese culture fused with pop culture and the Japanese temperament.”
It was also a moment to showcase the skill and savvy of a country whose cultural cachet has been overshadowed by South Korea and whose economy has been eclipsed by that of China, which is playing host to the Winter Olympics in a few months. “The quality of the Japanese organizers is absolutely superb,” said Richard Pound, a Canadian who is the senior-most member of the International Olympic Committee, or IOC.
“It’s a real shame, in many respects, that it wasn’t possible to go ahead in 2020 – because they were going to demonstrate a new level, almost a new paradigm of Olympic organization.”
But for Brand Japan, the pandemic has evaporated many of those hopes. The raft of last-minute changes to plans – including the banning of most spectators weeks before the opening ceremony – have cast into question the competence of organizers, as has the belated campaign to vaccinate the Japanese public.
The banishment of foreign spectators, including the families of Olympians, has also meant there will be few opportunities to show off the country. Locked in hotels and the Olympic village, the athletes themselves will be unable to see much of the country.
Those changes have erased some 90 per cent of the branding opportunity for Japan, Ms. Sato said.
“The impressions of individual people on social networks based on their own experiences has tremendous power,” said Hiromitsu Hatakeyama, senior executive director and head of strategy for Interbrand Japan. “It’s a shame that that part is damaged.”
Still, he sees the possibility of a silver lining. If Japan can hold an Olympics without disaster – without sick athletes, cancelled events or infected communities – the country could foster a sense of national pride at home and a positive image abroad. “The essence of a person or a brand comes out in a time of crisis – and how well they respond to those difficult times,” Mr. Hatakeyama said.
Mr. Pound counts himself among those confident Japan has pulled it off. ”I don’t think there’s another country in the world that could have held all this together for a year – that’s how good they are,” he said.
THE OLYMPICS MOVEMENT
Last June, World Sailing received an emergency loan from the IOC. The postponement of the Tokyo Olympics – and with it the expected sharing of broadcast revenues – created a dire situation for the sailing body. Without the loan, “we would have gone into liquidation,” World Sailing chief executive officer David Graham acknowledged this year, in comments reported by the Inside the Games website.
The IOC set aside US$150-million for such aid packages, part of an effort to preserve the organizations of international athletics that are the lifeblood of the Games. For some national Olympic committees, too, fully three-quarters of revenues come from the international organization.
“The majority of the sports that do compete at the Olympic Games really rely on that funding that’s disbursed after the Olympics happen,” said Heather Dichter, a scholar who specializes in the Games at De Montfort University’s International Centre for Sports History and Culture in Britain. “So to not have the Games really puts a huge percentage of global sport at risk to be able to continue.”
Broadcast rights and sponsorship make up fully 91 per cent of the IOC’s income, and broadcasters prepay roughly 30 per cent in the years prior to the Games. If the Tokyo Olympics were cancelled, the IOC would be obligated to repay that money. In such a scenario, the IOC “takes a haircut,” said Richard Peterkin, a former IOC member who chaired the finance commission for the Association of National Olympic Committees. But, he added, “it will live quite happily for another quadrennium.”
Over the past few years, the IOC has built up a rainy-day fund whose balance now approaches US$2-billion. “They could survive an entire four years without an Olympics, if it came down to that,” Mr. Peterkin said. “Yes, they would have to cut back. But it would not be that dramatic.”
The IOC and major broadcasters also maintain insurance to cover against unforeseen possibility. In the event of a single Games cancellation, “It’s the insurance people that are probably going to suffer the most, because they’re going to have to pay out a lot money,” Mr. Peterkin said.
That insurance backdrop may raise questions about why organizers pursued the Tokyo Games in the midst of a pandemic that continues to infect people around the world. In Tokyo and elsewhere, COVID-19 remains far from being under control.
Japanese infectious-diseases experts have cautioned that bringing in so many people from so many countries could be dangerous. They have warned about the potential for further spread of the virus – in Japan and then elsewhere as athletes leave the Games.
“There hasn’t been a pandemic on this scale for more than a century. So it’s not your usual risk,” acknowledged Mr. Pound, the Canadian IOC member.
But the push for the Tokyo Olympics against those worries was driven in part by those who feared long-term risk to a movement that has been in a continuous battle to maintain its relevance to television audiences and host cities. The IOC has already lined up Paris, Milan-Cortina in Italy and Los Angeles as host cities for future Games – but abandoning Tokyo stood to create a major warning sign for any city that might follow.
“If at the first sign of rain the IOC says, ‘Oh god, the sky is falling,’ and cancels, then your hosts would say, ‘... If they’re not committed to this, can we afford to be committed to it?” Mr. Pound said.
The Tokyo Games mark two firsts for Alannah Yip: her first Olympics, and the first for her discipline, sport climbing. So when organizers postponed the 2020 competition amid a worsening pandemic, she contemplated the possibility that it would not happen at all.
“I would have been sad, of course,” she said. For her personally, it was not a devastating prospect: “I’m not going into these Games as a medal favourite. My big goal was to qualify. And getting to compete in Tokyo is icing on the cake,” she said.
But for many, the Tokyo Games are do or die. Three in four Summer Olympians attend only one Games, researchers have found. “Most athletes aren’t Michael Phelps or Simone Biles,” said Prof. Dichter, the Olympics scholar. Even the one-year delay in the Tokyo Games “has caused a number of athletes to retire.”
Marnie McBean, the Canadian Olympian who is the country’s chef de mission to Tokyo, recalled beginning her athletic career around athletes barred from competing in Moscow by the boycott of the 1980 Games. “You become broken-hearted and that is something that lingers a lifetime,” she said. The effect on Olympians today would be even greater, given how financial and time commitments have grown over time, she said.
Without the Tokyo Games, “for sure there would have been a lost generation of athletes who would have been training for this moment that we would lose,” she said. The reverberations stood to extend far into the future, she said, given how many athletes are drawn to compete by watching Olympics.
For Team Canada, the risk was particularly acute: A record number of teams have qualified, including women’s basketball, soccer, rugby, water polo and softball, as well as men’s rugby, volleyball and field hockey. Think what “that would do for Canadian youth, to inspire them,” she said. “You don’t have to just do hockey as a team sport.”
Only a few months ago, with the Tokyo Olympics promising to allow foreign spectators into stands, it still seemed possible that the Summer Games might be a pivotal moment in reviving the age of easy international travel. Perhaps the sight of tens of thousands of people landing in Tokyo would help to bring back to life the pandemic’s toll of parked jets and stripped-back flight schedules.
It stood to mark a moment, one when the world watched as international flights sprung to life “and the world took a semblance of normal,” said Barry Prentice, a scholar with the Transport Institute at the University of Manitoba’s Asper School of Business.
It hasn’t worked out that way. And if anything, the Tokyo Olympics has only underscored the time it will take to return to the dense networks of border-hopping flights that have been a key pillar of the modern world.
In March, Japan reversed course and banned international spectators. Since then, fast-spreading virus variants have driven a surge in global cases. The number of new cases remains at levels similar to last October, with Southeast Asia, parts of Africa and some European countries witnessing substantial continuing outbreaks.
The number of weekly flights has partly recovered from last year – driven in part by robust domestic travel in places such as China and the U.S. – but remains fully a third behind levels in 2019. A lack of passenger flights has landed some athletes on cargo aircraft as their only means to get to Tokyo.
Japan itself has become a painful example of the slow pace of recovery. The stubborn persistence of coronavirus cases along with a delayed vaccine rollout – to date, only 16 per cent of the population is fully inoculated – has led to a continued state of emergency in Tokyo, the Olympic host city. Japan continues to ban travellers from most countries around the world.
As a result, it seems unlikely the Olympics will be “a key trigger for travel resumptions,” said Alexandre de Juniac, the former CEO of Air France who recently stepped down as director-general of the International Air Transport Association.
“The only trigger will be the cancellation of any travel restrictions by governments,” most importantly by the U.S., Europe, China and other Asian countries. That’s not likely to happen until there is a “significant and permanent decline in the number of COVID cases.”
The International Air Transport Association predicts a return to historical trends for international travel by 2024.
But for much of the world, the speed of vaccination remains slow. In some of the most populous developing countries, including India and Indonesia, fewer than 10 per cent of people have been fully vaccinated. In Nigeria, the figure is just 0.7 per cent. Meanwhile, the emergence of new variants has challenged the effectiveness of existing vaccines and created a risk of rapidly-spreading new infections.
“The key point for every state now is to have the majority of the population totally vaccinated,” Mr. de Juniac said.
Sign up for The Globe’s Olympic newsletter and follow all of the news, features and opinion in the leadup to the Summer Games in Tokyo.
Build your personal news feed
- Follow topics and authors relevant to your reading interests.
- Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.