Tokyo Olympics: postponed to 2021. The economic impact will be severe. 18 Federations at risk

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The TV rights for the Japanese Olympics, equal to 4.5 billion dollars, represent 73% of the IOC’s revenues and are indispensable for financing sports with a lower following.

by Marco Bellinazzo

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(EPA)

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The Japanese premier Abe Shinzo has decided: the Games of Tokyo they will not start on July 24, 2020 but will take place in 2021. At the beginning, the alternative scenarios were: 1 month postponement; slip in autumn; edition postponed to 2021. And it is this solution that prevailed in the end. At stake there was, among other things, the sporting regularity of the event (to guarantee all athletes the same training conditions and the Wada the possibility of adequate doping controls). But also the economic strength of global sport, as well as that of the host country.

Damage to Japan
The one-year postponement could cost between 5.4 and 5.6 billion euros, according to the estimate of Katsuhiro Miyamoto, emeritus professor at the Kansai University of Osaka and expert in sports economics. A cancellation, however, would result in a loss of over 38 billion euros which would rise to 65.9, according to a study by the Japanese financial company Nikko Securities. Also a first estimate of the Nikkei he spoke of $ 6 billion, while Goldman Sachs’ estimate of $ 500 billion (just under $ 5 billion).

The IOC insurance
The IOC can theoretically have an insurance policy, commissioned in 2002 by ex-president Jacques Rogge. A consortium of companies that involves Swiss Re, Munich Re is Lloyds it guarantees coverage of approximately $ 900 million in the event of cancellation of the Olympics or interruption during the event. The IOC also has a foundation that would allow the committee to operate until Paris 2024. In any case, the insurance does not cover the postponement of the Games.

International Federations
The real problem as he explained Thierry Sprunger, financial director of the IOC from 1994 to 2011, concerns international federations. “There are between 10 and 18 federations that could fail – he explained a few days ago -. Out of 28 international federations only a dozen are financially independent: football, tennis, basketball, volleyball and few others. For all the others most of the proceeds come from the Olympic Games. In addition, if Tokyo were to skip, the IOC will not be able to finance the spread of sport in at least 120 developing countries that depend on its contributions “.

Sponsors and TV
The TV rights for the Japanese Olympics – equal to 4.5 billion dollars, a record – represent 73% of the revenues of the IOC and they are one of the most delicate knots to untie. Discovery paid 1.3 billion for rights in Europe but said in a recent meeting with analysts that it was “insured” against possible cancellation. NBC – controlled by Comcast – spent 1.1 billion on the United States. In addition, national sponsorship revenues and ticket sales increased revenue by 30 billion yen, according to the fourth and final version of the Olympic budget. It is clear that any decision on the postponement must fully satisfy TV and sponsors.

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