TOKYO — The final cost of last year’s Tokyo Olympics, postponed due to COVID, has been set at $13 billion (1.4 trillion Japanese yen), the organizing committee said Tuesday in its final act before it is dissolved at the end. month.
The cost was double what was predicted in 2013 when Tokyo won the Games. However, the final price tag presented by the organizers is below the $15.4 billion they forecast when the Olympics ended just under 11 months ago.
“We made an estimate and it turned out to be lower than we expected,” said Tokyo Organizing Committee CEO Toshiro Muto, speaking through an interpreter at a press conference. “As a total amount, huge or not, when it comes to this kind of talk, it’s not easy to estimate.”
Keeping track of Olympic spending accurately—who pays, who benefits, and what is and isn’t the cost of the Games—is a constantly moving maze. A year’s delay added to the difficulties, as did recent exchange rate fluctuations between the US dollar and the Japanese yen.
When the Olympic Games opened on July 23, 2021, $1 could buy 110 yen. On Monday, $1 could buy 135 yen, the highest level of the dollar against the yen in about 25 years. Organizers have chosen to use a rate of $1 to 109.89 yen to calculate the dollar price, which organizers say is the average exchange rate for 2021.
Victor Matheson, a sports economist at the College of the Holy Cross who has written extensively about the Olympics, suggested in an email to The Associated Press that most of the “expenditure and income is denominated in yen, so the exchange rate that changes dollar amounts does not affect whether how the event is perceived by the organizers.
Matheson and compatriot Robert Baade examined Olympic costs and benefits in a study titled “The Pursuit of Gold: The Economics of the Olympics”. They wrote that “the overwhelming conclusion is that, in most cases, the Olympic Games are unprofitable for the host cities; they produce a positive net benefit only under very specific and unusual circumstances.”
Mutoh said there were savings due to the lack of fans, which reduced the cost of security and maintenance of the hall. He spoke vaguely about “reducing” costs and “simplifying” operations to achieve reductions.
However, organizers lost at least $800 million in ticket revenue because fans were banned due to COVID-19. Muto described reports that spending could total $25 billion before and after the postponement as unfounded.
There is one indisputable fact: Japanese government agencies, primarily the Tokyo Metropolitan Government, covered about 55% of all costs. This amounted to about $7.1 billion of Japanese taxpayer money.
The organizing committee’s privately funded budget was about $5.9 billion. The International Olympic Committee contributed $1.3 billion to this budget, with the largest contribution of $3.4 billion coming from local sponsors. The organizers also transferred $500 million in income from an unspecified “insurance payment”.
A study by the University of Oxford in 2020 found Tokyo to be the most expensive Olympics in history.
In the years leading up to the Olympics, government audits showed that official spending could be much higher than advertised.
It is impossible to estimate the long-term impact of the Tokyo Olympics, especially in a city as vast as the capital of Japan, where change is constant. The pandemic has wiped out any short-term tourism rebound. According to local reports, local sponsors who paid $3.4 billion to compete in the Olympics didn’t seem very happy.
Dentsu Inc., the giant Japanese advertising and public relations company, could win. He managed the marketing of Tokyo 2020, received sponsorship commissions, and was linked to the IOC vote-buying scandal that was linked to Tokyo getting the Games.
The scandal led to the resignation in 2019 of Tsunekazu Takeda, an IOC member who also chaired the Japanese Olympic Committee. He denied any wrongdoing.
The games were also affected by other scandals, including the resignation of Yoshiro Mori, president of the organizing committee, who made sexist remarks about women. The former Prime Minister of Japan resigned five months before the opening of the Games.
“I was puzzled, surprised — it was so unexpected,” Muto said when asked about Mori’s departure. “It was really hard for me to deal with the situation.”
In 2013, Tokyo declared itself a “safe pair of hands” in its bid to host the Games.
Tokyo will also be remembered as the first Games to be postponed for a year and then played largely without fans in a so-called bubble.
The most important legacy is by far the $1.4 billion National Stadium, designed by Japanese architect Kengo Kuma. Despite being a new location, it fits in seamlessly with its central location.
“The goal should be to match the cost of hosting the event with the benefits, which are distributed in such a way that it includes ordinary citizens who fund the event with their tax revenues,” Matheson and Baade wrote. “In the current scenario, it is often much easier for athletes to win gold than for the hosts.”