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Why are the Tokyo Olympics still taking place?

The Olympics were always about numbers. Because a motto from Citius, Altius, Fortius – faster, higher, stronger – doesn’t mean much without seconds, meters and pounds. How fast? How high How strong?

For more than a year, however, other numbers have dominated the discussions about the Tokyo Games: rising coronavirus case numbers, escalating risk factors, inadequate vaccination numbers.

Despite these concerns, the games are almost certain this summer: The latest evidence was the announcement on Monday that local spectators will be allowed to participate in Olympic events with reduced capacities.

Those numbers could help explain why – a month before the opening ceremony – the games are still going on.

If Tokyo’s new National Stadium is empty on the night of the opening ceremony, most of the $ 15.4 billion investment will go to the drain. The number, a record even for famously oversized Olympic budgets, rose by $ 3 billion in the past year alone. The reputational damage for Japan would be incalculable along with the loss of money.

“This was the branding exercise designed to showcase the world’s lifestyle superpower,” said Jesper Koll, an investment advisor who has lived in Japan for more than three decades. “Ultimately, it’s not about whether the construction costs are amortized or not, but about whether the country’s brand gets a boost.”

Many of the benefits that Tokyo hoteliers or restaurants could expect from hosting the Games have already vanished when organizers banned international viewers in March. And even the Olympic visitors who are allowed to enter Japan will not be able to experience most of Tokyo’s charms because the rules restrict them to Olympic venues.

That is the potential amount of television rights revenue that the International Olympic Committee, which organizes and runs the Games, may have to repay if the Olympic Games do not take place. The number makes up 73 percent of the IOC’s revenue. Sponsors related to the Games add up to hundreds of millions of dollars, and a cancellation would mean those companies could look for discounts too.

The US broadcasting rights to the Summer Olympics are among the most valuable sports properties in the world and, with their regular advertising revenues, are also among the most profitable. In March 2020, NBC Universal, which holds the U.S. broadcast rights to the Games, announced that it had sold $ 1.25 billion in national advertising for the Tokyo Olympics. That exceeded the amount sold for the 2016 Rio Olympics, which earned the company total sales of $ 1.62 billion and a profit of $ 250 million.

And not even a year of delay can affect NBC’s bottom line. Jeff Shell, CEO of NBC Universal, told an investor conference last week that, depending on ratings, the Tokyo Olympics “could be our most profitable Olympics in the company’s history.”

The word “solidarity” appears 406 times in the current annual report of the IOC. The main clue is the $ 549 million it distributes as so-called solidarity and other payments to national Olympic committees large and small. (The IOC accounts do not contain a breakdown of who gets what).

For many Olympic Committees, the IOC’s generosity – which pays for everything from administrative costs to training grants and youth development programs – is a vital financial lifeline. For example, on the Caribbean island of St. Lucia, IOC funding accounts for around a quarter of the national Olympic Committee’s $ 600,000 annual income, according to Richard Peterkin, a former IOC member.

But larger countries also count on the money. Earlier this year, the British Olympic Association announced in its annual report the prospect of a financial crisis if the Games were canceled this summer. “Cancellation of the Games after May 2021,” the directors recently concluded, “would create significant uncertainty that could raise serious doubts about the company’s ability to continue as a going concern.”

The postponement of the Olympics forced thousands of athletes – about 11,100 for the Olympics and another 4,400 for the Paralympics, which together represented more than 200 countries – to put their lives on hold for a year. Commit to an additional 12 months of training. Delaying marriage plans, college enrollments, and even having children. It’s no surprise, then, that by and large, global competitors are waiting for the Games to finally take place.

“My next chapter was about to happen,” said Delante Johnson, 22, a Cleveland boxer who wanted to turn pro in 2021. He decided to keep his amateur status for another year, partly to fulfill a promise he made to his coach Clint Martin, who passed away in 2015. “He always told me I was going to the Olympics,” said Johnson, “and I’m sticking to what he said.”

For Olympians who have arranged their entire lives to pursue their dreams, the Games are everything. They can open the door to sponsorship opportunities, bonus cash for medals, and post-competition careers. For many, they also offer the rare opportunity to perform in front of a global audience. “We’re finally getting this excitement and I’m just giddy,” said Kaleigh Gilchrist, 29, a water polo player from Newport Beach, California. “We can finally show all the hard work we put into it. ”

That is the current assessment of the favor of Japanese Prime Minister Yoshihide Suga, who may fear his political fortune is now too closely tied to the Games to be called off. “Politically, if he pulls the plug, he’s dead in the water,” says Jeff Kingston, director of Asian studies at Temple University in Tokyo. With the national elections approaching in September, Kingston said Suga could now see the Olympics as a potential lifeline.

For Suga and his government, holding a successful – and safe – Olympics would be of great political advantage. The downside, of course, is the risk of a public health disaster that kills lives and hits Japan’s economy. That would do far more serious damage than just damage Suga’s personal political reputation.

“This is the potential manufacture of the Godzilla variant,” Kingston said. “Should Tokyo be remembered?”

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