The Tokyo Olympics will need a public bailout of around $ 800 million if the games go behind closed doors, as organizers delay a decision on domestic spectators at the last possible moment.
Recent budgets show that Tokyo 2020 organizers still assume full stadiums. Having already spent the billions of yen raised from ticket sales, a new taxpayer subsidy would be the only way to fund refunds, according to a Financial Times analysis of the organizing committee’s accounts.
With the Japanese government determined to move forward and hold the games from July 23, the decision to whether to allow local fans in stadiums has become one of the biggest controversies surrounding the Olympics.
Speaking at the G7 summit in Cornwall, Prime Minister Yoshihide Suga said Japan was determined to allow spectators if it could.
“Given the level of Covid-19 infections, we will decide [on capacity] in accordance with the numbers allowed at other sporting events, ”he said.
If spectators are totally or partially banned, the city of Tokyo will be obliged to refund their tickets after agreeing to bear the cost to organize delayed games.
Of the 668 billion yen ($ 6.1 billion) in revenue that the organizing committee budgeted for this year, 90 billion yen is expected to come from ticket sales, representing roughly half of Tokyo 2020’s commercial revenue. The rest comes from public funding.
A balance sheet released by Tokyo 2020 last week showed a liability of 118.3 billion yen for prepayments received. Most of that was ticket income from the Japanese public, who handed over their money nearly two years ago.
Doctors and public health experts have advised Japan to hold the Olympics without spectators for avoid spreading the Covid-19, but organizers and sponsors are desperate to keep at least a few fans to get a return on their investment.
Shigeru Omi, the government’s chief medical adviser on the pandemic, urged Japan to avoid a “party atmosphere” during the games. Fans celebrating and drinking would lead to the kind of high-risk socialization that spreads the disease, he warned.
“If it is to take place, then no spectator is the only option,” Haruo Ozaki, president of the Tokyo Medical Association, said at a recent press conference.
Tokyo continues to report 300 to 400 cases of Covid-19 every day and is expected to remain in a emergency state until June 20. Olympic organizers have postponed a decision on spectators until the end of June, hoping the virus situation will have improved.
Sponsors are impatient to have spectators since they offered tickets to some of the games’ biggest moments at competitions and other marketing events.
“A big issue for sponsors is whether they can allow winners of the mainstream campaigns they started running ahead of the games last year to attend,” said a marketing manager who advises several sponsors of Tokyo 2020 on how to run games.
“Most sponsors have already benefited a lot from ticket campaigns. If these tickets are canceled, they are going to face a lot of backlash. “