TOKYO (AP) — The final price tag for last year’s COVID-19 delayed Tokyo Olympics has been set at $13 billion (1.4 trillion Japanese yen), the organizing committee said Tuesday in its final act before its dissolution at the end of the month.
The cost was double what was forecast in 2013 when Tokyo was awarded the Games. However, the final price put forward by the organizers is lower than the $15.4 billion they predicted when the Olympics ended just under 11 months ago.
“We made an estimate, and the estimate has dropped more than we expected,” Tokyo organizing committee executive director Toshiro Muto said, speaking through an interpreter at a news conference. “As a total amount, whether it’s huge or not, when it comes to that kind of conversation, it’s not easy to assess.”
Accurately tracking Olympic costs — who pays, who benefits, and what is and isn’t Games spending — is a constantly moving maze. The one-year delay added to the difficulty, as did recent fluctuations in the exchange rate between the US dollar and the Japanese yen.
When the Olympic Games opened on July 23, 2021, $1 bought 110 yen. On Monday, $1 bought 135 yen, the highest level of the dollar against the yen in some 25 years. The organizers chose to use a rate of $1 to 109.89 yen to calculate the price in dollars, which the organizers said was the average exchange rate for 2021.
Victor Matheson, a sports economist at Holy Cross College 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”.
Matheson and fellow American Robert Baade investigated Olympic costs and benefits in a study called “Going for Gold: The Economics of the Olympics.” They wrote 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.”
Muto said there were savings due to the absence of fans, which reduced security costs and venue maintenance costs. He vaguely spoke of “squeezing” costs and “simplifying” operations to arrive at reductions.
However, organizers lost at least $800 million in ticket revenue because fans were banned due to COVID. Muto called “unsubstantiated” reports before and after the postponement that costs could reach $25 billion.
There is an undeniable fact: Japanese government entities, mainly the Tokyo Metropolitan Government, covered about 55% of the total expenses. This amounted to about $7.1 billion in Japanese taxpayer money.
The privately funded organizing committee budget covered 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 listed $500 million in proceeds from an unspecified “insurance payout.”
An Oxford University study in 2020 said that Tokyo was the most expensive Olympics on record.
In the years leading up to the Olympics, government audits found that official costs could have been much higher than declared.
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 $3.4 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 scandal forced the resignation in 2019 of Tsunekazu Takeda, an IOC member who also chaired the Japanese Olympic Committee. He denied any wrongdoing.
The Games have been marred by other scandals, including the resignation of Yoshiro Mori, the organizing committee chairman who made sexist comments about women. The former Japanese prime minister resigned five months before the opening of the Games.
“I was taken aback, surprised, it was so unexpected,” Muto said when asked about Mori’s departure. “I really had a hard time dealing with the situation.”
Tokyo had billed itself as a “safe pair of hands” in its 2013 bid to host the Games.
Tokyo will also be remembered as the first Games to be postponed for a year and then held 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. Although it is a new place, it blends in perfectly with its central location.
“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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