Japan seems to be losing money every day it gets closer to the start of the Tokyo Olympic Games on July 23. How has the COVID-19 pandemic impacted the Olympics? How much money is Japan losing right now?
The latest blow to the international event came on July 7 when Olympic organizers decided to block all fans from attending competitions in Tokyo. The decision came after the Japanese government reinstated a state of emergency in the city due to a surge in COVID-19 cases. Originally, only international spectators were banned from attending. The latest decision bans Japanese spectators as well.
The number of COVID-19 cases in Tokyo jumped up to 896 on July 7, which was the second-highest count since May, according to Yahoo Sports.
“The state of emergency in Tokyo is being implemented as a measure aimed at suppressing the flow of people in order to prevent the spread of infection now, because the number of confirmed COVID-19 cases remains high and the number of people infected with variant COVID-19 strains in Tokyo is increasing,” the Japanese government said in a statement.
Japanese fans might still be allowed to attend some events like soccer, softball, and baseball, that are being held in other locations and not in Tokyo. Any decisions regarding attendance for those events will be left to the local government authorities in each area, organizers said in a statement.
How much will the Olympics lose without fans?
Without fans in the stands, the event could lose an estimated $815 million on tickets sold, not to mention the millions of tourism dollars the country would have raked in from visitors spending money on hotels and restaurants.
Earlier this year, a study by a Japanese professor of economics estimated that holding the Olympics and Paralympic Games without spectators could result in an over $23 billion loss for Japan.
How much did postponing the Olympics cost?
Although there still isn't any talk of postponing or canceling the event in 2021, if organizers decide to go that route, the price tag would be significant.
The Tokyo Olympics was already postponed in 2020 due to the COVID-19 pandemic that swept across the globe. The cost of that postponement is an estimated $3 billion, according to Reuters.
The entire cost of holding the Tokyo Olympic Games this year is estimated to be over $15 billion, including the cost for last year’s postponement, reports Reuters.
According to the website Statista, the Japanese government and other entities could lose up to 640 billion yen, or $5.8 billion, if the Toyko Olympics gets postponed again. If the event gets canceled altogether, the loss will top 4 trillion yen, or almost $40 billion.
Sponsors and media could lose money if the Olympics gets postponed again.
Beyond the costs of putting on the event, canceling or postponing the Olympics could also hit the pocketbooks of event sponsors and the media. Over 60 Japanese companies paid a combined total of over $3 billion to sponsor the Olympics, Reuters reports.
Comcast paid a pretty penny for the rights to broadcast the Olympics in the U.S. Discovery Communications, parent company to Eurosport, owns the rights to broadcast the games in Europe. The media companies could lose billions of dollars in advertising revenue if the games gets postponed or canceled in 2021.