Sport

GLOBAL SHUTDOWN?

Tokyo 2020 will be the biggest Coronavirus sporting casualty if the Olympic Games are called off

Tokyo 2020 will be the biggest Coronavirus sporting casualty if the Olympic Games are called off
A pedestrian in Tokyo wearing a face mask walks past a poster with an illustration of the 2020 Tokyo Olympic and Paralympic Games mascot character Miraitowa. (Photo: Tomohiro Ohsumi / Getty Images)

With 19 weeks remaining until the opening of the Tokyo 2020 Summer Olympics there already appears to be disagreement on whether it can go ahead or be postponed due to the Coronavirus outbreak.

There is some irony that the official Tokyo 2020 Olympic torch relay will start in the prefecture of Fukushima on 26 March. It was in this area that the devastating 11 March 2011 tsunami following a 9.1 magnitude earthquake off Japan’s east coast, caused a nuclear disaster. Three reactors at the Fukushima Daiichi Nuclear Power Plant suffered meltdowns after the emergency generators needed to cool the reactors were flooded by the 14m waves.

Coronavirus (Covid-19) is less dramatic than a nuclear disaster, but no less dangerous to humans – as 3,000 deaths and 88,000 infections since the first case 10 weeks ago indicates.

The symbolism of starting the official countdown to the Tokyo Games in the same region as one of Japan’s worst disasters as another potential global disaster emerges, is an unnerving metaphor for what lies ahead.

With Japan being one of the countries severely affected in these early months of the Covid-19 outbreak, schools are closed and mass gatherings of people such as at football matches are curbed. In this context, the staging of an Olympic Games feels like an extravagance more than anything else. But then again, all global sporting events are extravagances that cost taxpayers, cities and countries billions of dollars for negligible positive returns.

As it currently stands, the 2020 Olympic Games in Tokyo will go ahead as scheduled from July 24. The International Olympic Committee (IOC) and the Tokyo Organising Committee agree on this much – for now.

Where their perspectives digress though, appears to be over possible postponement versus cancellation of the four-yearly showpiece.

In response to a question posed in Japan’s parliament on Monday, Tokyo Olympic Minister Seiko Hashimoto said Tokyo’s contract with the IOC: “calls for the Games to be held within 2020. It could be interpreted as allowing a postponement”.

It seems like semantics is about to become an Olympic sport.

Last week, prominent IOC member Dick Pound told the Associated Press that no postponement was possible. If the Games could not go ahead as scheduled they would not go ahead at all. Pound indicated that the end of May was the latest date for a decision.

“In and around that time, I’d say folks are going to have to ask: ‘Is this under sufficient control that we can be confident about going to Tokyo or not?’ Pound said.

“A lot of things have to start happening. You’ve got to start ramping up your security, your food, the Olympic Village, the hotels. The media folks will be in there building their studios.

“You just don’t postpone something on the size and scale of the Olympics. There are so many moving parts, so many countries and different seasons, and competitive seasons, and television seasons. You can’t just say, ‘We’ll do it in October.’ ”

On Tuesday the IOC held an executive board meeting at its headquarters in Lausanne, Switzerland and afterwards IOC head Thomas Bach moved to curb fears of the Tokyo Games being cancelled.

“I would like to encourage all the athletes to continue their preparation for the Olympic Games Tokyo 2020 with great confidence and full steam,” Bach told a media conference.  

“From our side, we will continue to support the athletes and the National Olympic Committees.”

The Tokyo Olympic organising committee is sticking to its official message for the moment – that all is well and Covid-19 is under control.

“Countermeasures against infectious diseases constitute an important part of our plans to host a safe and secure Games,” a statement from the Tokyo Olympic organising committee, released on Monday, said.

“Tokyo 2020 will continue to collaborate with all relevant organisations which carefully monitor any incidence of infectious diseases and we will review any counter-measures that may be necessary with all relevant organisations.”

Inevitably politics and money are at play as much as health in these Covid-19 times. Japan has spent $12.35-billion (according to some reports, although this number could well be higher) preparing Tokyo to host the Olympic Games, some of which is offset by ticket sales and a portion of the income derived from television rights.

The IOC, of course, holds the rights and stands to make the most money from the Games, but it hasn’t spent an obscene amount building and revamping infrastructure. That risk is carried by Japan and its tax-paying citizens. Not holding the Olympic Games for the first time since World War II would be a blow to the IOC, but not as big as the blow Japan will take if they don’t go ahead. Which is why they are talking about postponement rather than cancellation as the worst-case scenario.

But postponement is almost impossible because of the sheer amount of logistics involved in bringing multiple sporting codes together at the Olympic Games. Dozens of sports federations, from athletics to yachting, plan their schedules around the 17-day event.

Athletes prepare their entire lives to peak at that time. Those on the lower rungs of sport, who are not fully professional and have to take time off from work to fulfil their dream of being called an Olympian, cannot easily alter their schedules on a whim.

Superstars in other sports such as football, basketball, golf and tennis have this window open once every four years. There is no gap in their busy international schedules for a postponement because every possible window is filled and sold to TV companies for huge fees. Moving an Olympic Games literally means reworking the calendars of almost every sporting code, redoing broadcast contracts and somehow making them all align at some, as yet, undefined point.

If Covid-19 does stop Tokyo from hosting the Olympic Games, the only other remotely plausible scenario is that another city steps in and runs the event in the designated period (24 July-9 August). But this is highly unlikely.

Rio, which hosted the last Summer Olympics in 2016, should in theory still have the requisite infrastructure in place to do it all again at short notice. But it doesn’t. A year after the Rio Olympic flame was extinguished, many of the venues were already derelict and falling apart. The controversy surrounding the Games in Rio in the first place – being hosted by a country that could ill afford it – was a political disaster for the city and the national government.

London, the 2012 hosts, could in theory dust off its venues and try again, but that idea has already been shot down by the British Olympic Association (BOA). They moved quickly to distance themselves from a conservative politician and candidate for London mayor named Shaun Bailey, who suggested the IOC should seriously consider asking London to step in.

Even if a move of venue was plausible, the fact that Covid-19 has no respect for borders suggests that no major urban area – at least in the northern hemisphere at this stage – could guarantee that fans and athletes would be safe.

Another option is that in the worst-case scenario the Tokyo Olympics would go ahead, but without fans. It’s an extreme suggestion and one that is unlikely to succeed. Imagine an empty 80,000-seater stadium for the 100m finals. Eerie wouldn’t even begin to cover it.

For now, Tokyo 2020 adopts a wait-and-see attitude. DM

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FACTBOX: Implications of Olympic Games cancellation (Reuters)

Olympic costs

Organisers said in December the Games were expected to cost some ¥1.35-trillion ($12.35-billion), but that figure did not include an estimated ¥3-billion for moving the marathon and walking events from Tokyo to the northern city of Sapporo to avoid the summer heat.

Tokyo 2020’s budget is split between the organising committee and local and national governments; the IOC contributed more than $800-million.

Organisers say the national government will have paid some ¥150-billion – mainly for funding a new National Stadium.

Japan’s Board of Audit, however, put government spending between the bid in 2013 and 2018 at ¥1.06-trillion ($9.81 billion), a discrepancy organisers attributed to differences in the definition of “Games-related” spending.

Sponsors 

The Tokyo 2020 Olympics have generated record domestic sponsorship revenues of more than $3-billion.

That does not include partnerships with Japanese companies Toyota, Bridgestone and Panasonic and others such as South Korea’s Samsung, who through a TOP sponsors programme, have separate deals with the IOC worth hundreds of millions of dollars.

Insurance

Global insurers face a hefty bill if Covid-19 forces the cancellation of the Games, with estimates of the cost of insuring the showpiece running into billions of dollars.

The IOC takes out about $800-million of protection for each Summer Games, which covers most of the roughly $1-billion investment it makes in each host city. Insurance sources estimated it would pay a premium of about 2-3%, giving a bill of up to $24-million to insure the Tokyo event.

Analysts with the financial services firm Jefferies estimate the insured cost of the 2020 Olympics at $2-billion, including TV rights and sponsorship, plus $600-million for hospitality.

Media

NBCUniversal in December announced it had already sold more than $1-billion in advertising commitments in its planned US broadcasts of the Games and was on track to surpass $1.2-billion, Variety reported. The company’s parent, Comcast, agreed to pay $4.38-billion for US media rights to four Olympics from 2014 to 2020, Variety said.

Discovery Communications, the parent of television channel Eurosport, has agreed to pay €1.3-billion ($1.4-billion) to screen the Olympics from 2018 to 2024 across Europe.

During a recent call with investors, Gunnar Wiedenfels, Discovery’s chief financial officer, suggested a cancelled Olympics was “not going to have any adverse impact on our financials”, Variety reported, adding executives said the company had insurance to safeguard its investment.

Hit to Japan’s economy 

Most of the domestic spending on the Olympics has been done, so a cancellation would have minimal impact in that regard, economists said.

A Bank of Japan study in 2016 estimated Games-related spending would peak at 0.6% of gross domestic product (GDP) in 2018 and be less than 0.2% of GDP in 2020, research consultancy Capital Economics noted.

Tourism, a major contributor to recent Japanese growth, could take a hit, although economists said the greater threat was from the Covid-19 spread itself.

In 2019, Japan hosted 31.9 million foreign visitors, who spent nearly ¥4.81-trillion ($43.1-billion).

Nomura Securities had forecast consumption of ¥240-billion from event-related tourism in 2020, which it said would evaporate if the Olympics were cancelled.

Citigroup Global Markets Japan economist Kiichi Murashima said a loss of events-related tourism alone would chip 0.2 percentage points off GDP growth in the July-September quarter against the previous quarter.

But he said the chilling impact of the virus on an already struggling Japanese economy, and on global growth, if the spread did not peak, meant Japan’s GDP could show zero or even negative growth in the July-September quarter.

A failure to contain the global spread of the virus would scupper a scenario that sees Japan’s economy posting a V-shaped recovery after two quarters of negative growth through March, said Jesper Koll, a senior adviser at US asset manager WisdomTree.

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