The Tokyo Olympics cost $ 15.4 billion. What else could it buy?
TOKYO (AP) – The official Tokyo Olympics prize of $ 15.4 billion, which Oxford University research finds is the most expensive on record. What else could these billions buy?
The approximate figure for the construction of a 300-bed hospital in Japan in 55 million dollars. You could therefore put almost 300.
The average primary school in Japan costs around $ 13 million. For that price, you get 1,200 schools.
Quick research reveals that a Boeing 747 costs around $ 400 million. Voila: 38 jumbo jets for the price of the Tokyo Olympics.
The point is, the Olympics are expensive and can override other priorities. In fact, several Japanese government audits indicate that actual spending for the Tokyo Games is even higher than the official figure, perhaps twice as much. Everything but $ 6.7 billion comes from the public money of Japanese taxpayers. According to the latest budget, the IOC’s contribution is $ 1.3 billion. He also added several hundred million more after the pandemic.
Olympic costs were analyzed in a study from the University of Oxford, which found that all Games since 1960 have experienced cost overruns of 172% on average. Tokyo’s cost overrun is 111% or 244% depending on which cost figure you select.
“The IOC and Host Cities have no interest in tracking costs, as tracking tends to reveal cost overruns, which are increasingly troublesome for the IOC and Host Cities,” said the author. of Oxford Bent Flyvberg in an email. Flyvberg also pointed out that costs would be reduced if the IOC collected more invoices rather than opening organizers’ wallets.
Tracking costs is a tedious exercise, peppered with arguments over what is – and what is not – Olympic spending. Flyvberg explained that the numbers for different games can be “opaque and not comparable” and require sorting and tracking.
“The problem is disentangling what the Olympics cost and what is just general infrastructure spending that would have happened anyway but was ramped up for the Olympics.” Victor Matheson, who studies sports economics at Collège de la Sainte-Croix, wrote in an email.
For example: the 1964 Tokyo Games, he says, “were either one of the cheapest or one of the most expensive, depending on what part of the preparation costs count for the Olympics”.
The 2008 Beijing Olympics, commonly listed as costing over $ 40 billion, and the Sochi 2014 Winter Olympics – priced at $ 51 billion – are often mistakenly referred to as the most expensive.
“The figures for Beijing and Sochi probably include broader infrastructure costs: roads, railways, airports, hotels, etc. Our figures do not,” Flyvberg wrote in an email.
The vagueness around costs – and who pays – allows the IOC to present the Olympics as a global celebration that brings the world together and promotes world peace. Everyone benefits, and the financial interests of the nonprofit IOC are hidden behind national flags, pomp and ceremony and heartbreaking stories of athletes winning gold and beating the pandemic.
Tokyo, of course, has seen costs skyrocket with the postponement. Officials say the delay added $ 2.8 billion to the final total. The postponement and subsequent fan ban also wiped out virtually all revenue from ticket sales, which was budgeted at $ 800 million. This shortfall will have to be filled by Japanese government entities – possibly the Tokyo Metropolitan Government.
Tokyo organizers have raised a record $ 3.3 billion from domestic sponsors, spurred on by Japanese advertising giant Dentsu, Inc. But many sponsors have openly complained in the run-up to the Games that their investment had been wasted without fans. Toyota, one of the IOC’s top 15 sponsors, has pulled its Games-related advertising from television in Japan due to public dissatisfaction with hosting the Olympics amid a pandemic.
The big winner appears to be the Switzerland-based International Olympic Committee, which by hosting the Olympics – even without fans – secured broadcast rights revenues of $ 3-4 billion. The IOC is primarily a sports and entertainment company, and nearly 75% of its income comes from the sale of broadcast rights and 18% from sponsors.
The IOC was able to move the Games forward, in part because the terms of the so-called host city agreement favor the IOC and not the Japanese hosts.
In an interview last week, President Thomas Bach said financial interests were not at the center of the IOC’s decision to postpone instead of cancel.
“We could have canceled the Games 15 months ago,” Bach said. “Financially, it would have been the easiest solution for the IOC. But we decided at the time not to cancel the Games, not to draw on the insurance that we had at the time. “
The IOC has never specified how much insurance coverage it has for such eventualities, nor what is covered.
So why did Tokyo want the Olympics? Why any city? German sports economist Wolfgang Maennig said the Olympics provided little economic boost. So all value must be elsewhere. He often compared the Olympics to throwing a big party for your friends and overspending, hoping they come away happy and remember you fondly.
“After three decades of empirical research, economists agree that the Olympics do not generate any significant positive effects on national (or even regional) income, employment, tax revenues, tourism, etc.”, wrote Maennig, 1988 Olympic gold medalist in rowing. in an email.
He said all the benefits were elsewhere and included an advantage on the field and more medals for home athletes, new sports facilities, increased international awareness and accelerated decision-making regarding urban regeneration. Japan’s Olympic performance goes in this direction; he won more gold and overall medals than ever before.
Much of the Olympic profits go to construction companies and contractors. Tokyo has built eight new sites. The two most expensive were the National Stadium, which cost $ 1.43 billion, and the New Aquatic Center, which cost $ 520 million. The next two Olympic organizers – Paris in 2024 and Los Angeles in 2028 – say they are drastically cutting new construction.
While Tokyo has likely suffered short-term economic losses from the pandemic and lack of fans, the losses are relatively small for a country with a $ 5,000 billion economy.
In another study of Olympic costs by Robert Baade and Victor Matheson, “Going for Gold: The Economics of the Olympics”, they point out that Olympic investing is risky and that only a few reap the benefits.
“The goal should be that accommodation costs are offset by shared benefits so as to include ordinary citizens who fund the event with their tax dollars,” they wrote. “In the current arrangement, it is often much easier for the athletes to get the gold than it is for the hosts.”
AP Sports writer Stephen Wade has been covering preparations for the Tokyo Olympics in Japan since 2018. Follow him on Twitter https://twitter.com/StephenWadeAP. AP Tokyo reporters Mari Yamaguchi and Yuri Kageyama contributed to this report. More AP: https://apnews.com/hub/2020-tokyo-olympics and https://twitter.com/AP_Sports.