Road To The Olympic Games

Olympics·Analysis

Too much money at stake for Tokyo Games to be cancelled, says Olympic expert

Fear of tarnishing the Olympic brand and the money it generates is the prime motivation for the International Olympic Committee to go ahead with this summer's Games in Tokyo, says one Olympic expert.

Cancellation could have trickle-down effect on smaller countries, women's sports

A pedestrian walks past a traffic sign next to an official Tokyo 2020 Olympic Games banner on the Tokyo Metropolitan Government Building. Michael Naraine, who studies major games and the Olympic movement, believes there's too much money at stake for the Tokyo Games to be cancelled. (Behrouz Mehri/AFP via Getty Images)

Fear of tarnishing the Olympic brand and the money it generates is the prime motivation for the International Olympic Committee to go ahead with this summer's Games in Tokyo, says one expert.

"It made sense to postpone the Games last year, but cancelling the Games outright is completely out of the question for the Olympic movement," said Michael Naraine, an assistant professor with Brock University's department of sport management who studies major games and the Olympic movement.

"I would hazard to say the biggest reason why they would never get cancelled is because of the money that's on the table."

Both Thomas Bach, president of the IOC, and Yoshiro Mori, president of the Tokyo Olympic organizing committee, have said the Summer Olympics and Paralympics will proceed as planned.

Last month, The Times of London quoted an unidentified senior member of the ruling government coalition of saying "the consensus is that it's too difficult" and "personally, I don't think it's going to happen."

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The Tokyo Olympics and Paralympics were supposed to take place last summer but were rescheduled to this year due to the COVID-19 pandemic.

Both Naraine and Dick Pound, a Canadian member of the IOC, believe the Games will happen.

"It looks like it can be done," said Pound, a former president of the Canadian Olympic Committee. "I think everyone is committed to doing as much as possible to make sure it does happen, provided it can be done safely."

Naraine said cancelling an Olympics could in the future diminish the significant revenues the IOC generates from television contracts and sponsorships.

"It would massively impact the brand," he said. "The value of the Olympic brand would be devalued to the point where sponsors will not be willing to pay the price points that they are currently paying.

"And with the hyper-competitive sponsorship market that we're seeing in sport ... it's going to become a lot more difficult for the Olympic movement to try and attract sponsors if they cannot deliver on their core product."

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The IOC's website says the sale of broadcasting and marketing rights, plus "other income streams" produced $5.7 billion US in revenue for the 2014 Winter Games in Sochi and the 2016 Summer Games in Rio.

In 2014, NBCUniversal signed a deal with the IOC paying $7.75 billion for the rights to the Games through 2032.

Corporations like Airbnb, Panasonic, Visa and Coca-Cola also spend millions of dollars to be Olympic sponsors.

Pound said if the Games were cancelled "insurance coverage would step in to make sure that at least there's some recovery of sunk costs.

"It would be something of a body blow but not fatal by any means."

The IOC says each day it "distributes about $3.4 million around the world to help athletes and sporting organizations."

Trickle-down effect on NOCs

Naraine said a reduction in IOC revenue could have a trickle-down effect on money funnelled to national Olympic committees (NOCs).

Getting less money "may not be a huge deal" for Olympic committees in Canada, the United States and Great Britain, but would impact smaller countries "where corporate money and private sponsorships ... are few and far between," he said.

Pound said less money could hinder training in some countries.

"The on-site activities in each country could continue," he said. "Where they would suffer to a greater degree would be in their ability to afford to travel to international competitions or to engage overseas coaches to come in to do some of the teaching."

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Women's sports could suffer in some countries.

"Unfortunately, it tends to be a situation when push comes to shove for some of those under-resourced NOCs, they tend toward the male sports," Naraine said.

Pound believes the IOC has the resources to maintain funding levels.

"The IOC has kept the funding for that going through all of 2020 with no revenues," he said. "I think they probably can do it for another year without major suffering."

Japan has extended a coronavirus state of emergency in Tokyo and nine other areas through March 7. While new cases of the virus have declined, experts say hospitals remain flooded with serious cases.

Japan's public broadcaster NHK says the country has 390,687 coronavirus cases and 5,766 deaths.

A recent survey also showed around 80 per cent of the Japanese population believes the Games should be cancelled or rescheduled again.

Naraine believes some members of the Japanese government have reservations about hosting the Games.

"I do believe that the Japanese domestic political situation is working in the back room to say, 'you know what folks, this probably isn't the best idea that we host the world for a two-week party,'" he said. "But I don't think they have any say in the matter.

"I think the financial and legal obligations to host the party are set in stone. The sunk costs are already there. They're going to have to kind of play nice and just put on the show for the television viewers."

ABOUT THE AUTHOR

Jim has written about sports in Canada for more than 40 years for The Canadian Press, CBC Sports, CFL.ca and Swimming Canada. He has covered eight Olympic Games and three Paralympics. He was there the night the Edmonton Oilers won their first Stanley Cup and has covered 12 Grey Cups.

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