The outline of operations for the 2020 Tokyo Olympics has been finalized, with a record number of events to be contested during the games. While the organizing committee must carefully proceed with preparations for the global sports extravaganza, it also needs to maintain a watchful eye on expenses and keep on the alert for potential savings. Because the International Olympic Committee emphasizes the need to keep the games financially sustainable, it is all the more important for Tokyo organizers to make serious efforts to further trim the budget for the 2020 version, now set at some ¥600 billion.
During the Tokyo Games, 339 events in 33 sports will be contested — 33 events and five sports more than in the 2016 Olympics in Rio de Janeiro. In accordance with the organizer’s request, five sports — baseball and softball, karate, skateboarding, sports climbing and surfing — and 18 events will be contested in the 2020 Games only. In addition, 15 more events will be added at the behest of the IOC, which considered requests from various international sports organizations — such as three-player basketball, a mixed-gender team judo competition and a mixed-gender triathlon relay. Athletes from more than 200 countries and regions will be competing for 339 gold medals — more than double the 164 events contested by athletes from 93 countries and regions when Tokyo last staged the Olympics in 1964.
The organizing committee’s budget covers spending on transportation for athletes and officials, information systems, temporary facilities at the event venues, the opening and closing ceremonies, and operating the athletes’ village. It does not include such expenses as construction of new stadiums and security measures, which will be borne by the host city and national government. The budget of ¥600 billion (roughly $5.3 billion) for the Tokyo Games is the largest ever.
The IOC is concerned that the swelling expense of hosting the Olympics could discourage cities around the world from bidding for future versions. For the 2024 Summer Games, five cities initially came forward as candidates, but three — Hamburg in Germany, Rome and Budapest — dropped out as either the candidacy was shot down by local referendum or the local authorities gave up due to the huge financial burden amid tight finances.
In an unusual move, the IOC now plans to get the two remaining contenders — Paris and Los Angeles — to take either the 2024 Olympics or the next games in 2028 in a decision to be made in September. In the bidding for the 2022 Winter Games, four cities withdrew from the race before Beijing was chosen as the host in a two-way competition with Almaty, Kazakhstan. Many potential cities lost interest in hosting the Olympics after the total cost of the 2014 Winter Games in Sochi, Russia, topped the equivalent of ¥4 trillion, including construction of event venues and development of the necessary infrastructure.
Despite efforts to trim spending, the total estimated cost of holding the 2020 Tokyo Games has swollen to ¥1.385 trillion, not including reserve funds to respond to possible upward swings in construction expenses and other costs. In attempts to erase the image of the Olympics as a costly event — and to lower the hurdles for potential hosts to bid for future games, the IOC is calling on the Tokyo Metropolitan Government and the organizing committee to further reduce the overall price tag. The IOC has reportedly pointed out to the powers that be in Tokyo that spending on temporary facilities at event venues as well as media centers should be further trimmed.
The organizing committee should be open to suggestions on new ways to cut expenses. It should adopt a mindset of thoroughness in reviewing expenses so that the total cost can be reduced as much as possible. The committee should not hesitate to invite third-party experts to screen cost estimates by contractors and its own spending plans.
Fortunately, the organizing committee has been successful in finding businesses willing to sponsor the Olympics. The revenue from these corporate sponsors is likely to reach twice the initial goal and account for half the expected total revenue. Grants from the IOC are also expected to be higher than projected, reaching ¥170 billion. The organizing committee may be close to achieving a balance between revenue and spending. It’s not guaranteed, however, that all other potential Olympics hosts will have access to corporate sponsors with deep pockets ready to invest. The Tokyo organizers should pursue less costly games so that the 2020 event will serve as the model of “sustainable” games for future potential hosts.