Financial losses from the transfer of the Olympic games in Tokyo to 2021 will amount to more than $5.8 billion

The postponement of the 2020 Summer Olympics in Tokyo will deal a blow to the Japanese economy and lead to financial losses that will exceed $ 5.8 billion. This is reported by the British economic publication LearnBonds.

The Olympic games were supposed to be held from July 24 to August 9, 2020, but due to the coronavirus pandemic, they were postponed to 2021.

In 2013, when the capital of Japan was chosen for the 2020 Olympics, it was estimated that hosting the Games would cost about $ 6.6 billion, but by the end of 2019, the total cost had almost doubled to $ 12.3 billion.

The organizing Committee invested 5.51 billion dollars in the Olympics. Tokyo authorities were in second place in terms of spending, spending just $ 5 million less than the organizing Committee. The Central government of Japan allocated 1.37 billion dollars.

One of the crucial factors in calculating how the postponement of the Games has hit Japan’s economy is that much of this spending has already occurred. This means that the impact of spending has already been factored into the country’s gross domestic product in recent years.

The postponement of the Games had an impact on the training of 11,000 athletes and 4,400 Paralympic athletes. Many of them trained for several weeks in countries that have now closed their borders. Their expenses for preparing for the Olympics totaling $ 3.56 billion were also attributed to losses.

The Olympics are expected to have a long-term economic impact on Japan, generating more than $ 2 billion in revenue mainly from tourism, Tokyo’s infrastructure development, and continued use of new facilities.

The projected cost of maintaining, repairing, and managing stadiums and the Olympic village will be about $ 210 million, while public relations and communications costs will be $ 91 million.

Also lost profit from sponsorship and advertising contracts in the amount of 4.4 billion dollars.

Japanese businesses had a significant share in the budget for the Tokyo Olympics. Sponsorship money totaled $ 3.18 billion, which is a record. The 2012 Olympic games in London and the 2016 Games in Rio de Janeiro attracted three times less money from local sponsors.

This figure does not include the partnership agreements concluded between the giant companies Panasonic, Toyota and Bridgestone and the International Olympic Committee to sponsor several Games in a row. These organizations have exclusive deals with the IOC worth hundreds of millions of dollars.

NBC set a record by selling more than $ 1.25 billion worth of ads in the run-up to the 2020 Olympic games. Although the company was insured, delaying the Tokyo Olympics would cost them a loss of advertising revenue. During Rio 2016, NBC earned about $ 250 million in advertising.