Tokyo closes the books on expensive Olympics delayed by pandemic

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TOKYO — Organizers of last year’s COVID-delayed Tokyo Olympics were expected to put the final cost of the Games at 1.42 trillion yen, roughly double what was forecast when the IOC awarded them. in 2013.

Tokyo Olympics officials, meeting Tuesday before the body dissolves at the end of the month, will detail the final figures, which were raised by the pandemic but were in a record range long before that.

Calculating costs is a challenge due to recent fluctuations in the exchange rate between the dollar and the Japanese yen. When the Olympic Games opened a year ago, $1 bought 110 yen. On Monday, $1 bought 135 yen, the highest level of the dollar against the yen in some 25 years.

The fall in the value of the yen means that the cost of the Olympics quoted in dollars is now about 10.5 billion dollars. A year ago, the price was about $13 billion.

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 AP that most “expenses and revenues are in yen, so the exchange rate that changes the amounts in dollars does not affect”. how the event ‘feels’ for the organizers”.

In the run-up to the Tokyo Games, the organizers used to use the exchange rate of 107. At that exchange rate, the equivalent of 1.42 trillion yen would equate to $13.33 billion as the final price.

Matheson and fellow American Robert Baade investigated Olympic costs and benefits in a study called “Going for Gold: The Economics of the Olympics.”

They write that “the overwhelming conclusion is that, in most cases, the Olympics are a money-losing proposition for the host cities; result in positive net benefits only in very specific and unusual circumstances.”

Accurately tracking Olympic costs — who pays, who benefits, and what is and isn’t Games spending — is a moving maze.

Olympic organizers estimated the official costs when the Games closed a year ago at $15.4 billion.

Four months later, organizers said the costs had been reduced to $13.6 billion. They said there had been a big saving because no fans were allowed in, which reduced costs for security, venue maintenance, etc.

However, the organizers lost at least $800 million in revenue from non-sales of tickets, which fell to the Tokyo Metropolitan Government to cover.

A Oxford University study in 2020 said Tokyo was the most expensive Olympics on record.

There is an undeniable fact: more than half of the costs were paid by public money: the Tokyo government, the national government and other government entities.

In the years leading up to the Olympics, government audits found that official costs could have been double what was declared, meaning the public portion of the bill could be much more than half.

The International Olympic Committee in its annual report says it contributed some $1.9 billion to cover the costs of Tokyo.

It is impossible to assess the long-term impact of the Tokyo Olympics, particularly in a sprawling city like the Japanese capital, where change is constant. The pandemic erased any short-term tourism rebound. Local sponsors, who paid more than $3 billion to be tied to the Olympics, did not seem too happy according to local reports.

Dentsu Inc., the giant Japanese advertising and public relations firm, may have benefited. He ran marketing for Tokyo 2020, received commissions for lining up sponsors, and has been linked to an IOC vote-buying scandal that was linked to Tokyo winning the Games.

the The scandal forced the resignation of Tsunekazu Takeda in 2019, an IOC member who also headed the Japanese Olympic Committee.

the The games were affected by other scandals., including the resignation of Yoshiro Mori, the chairman of the organizing committee who made sexist comments about women. The former Japanese prime minister resigned five months before the opening of the Games.

Tokyo had billed itself as a “safe pair of hands” in its bid to win the Games.

Tokyo will also be remembered as the first Games that were postponed for a year, and then it was carried out mostly without fans in a so-called bubble.

The most important legacy is surely the $1.4 billion National Stadium designed by Japanese architect Kengo Kuma.

“The goal should be to match the costs of hosting with the benefits that are shared in a way that includes ordinary citizens who fund the event with their tax dollars,” Matheson and Baade wrote. “In the current arrangement, it is often much easier for the athletes to achieve gold than it is for the hosts.”

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