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Counting the cost of postponing the Tokyo Olympics

by Mark Schreiber

Contributing writer

Nearly a month before the decision was announced to postpone the 2020 Olympics, the media was already speculating over their fate. On Feb. 24, the headline in Nikkan Gendai read, “Relinquishing of the Tokyo Olympics would mean ¥20 trillion in economic losses.”

Noting that a growing number of recent domestic sports events — such as the Tokyo International Marathon — had been scaled down or canceled outright, the article also mentioned proposals advanced from several people in the United Kingdom that the games be transferred to London.

To this, sportswriter Gentaro Taniguchi remained upbeat, going so far as to predict, “Short of a pandemic in Japan, I don’t think there’s any possibility the Olympics will be canceled.”

America’s Time magazine, however, likened such statements of optimism to what occurred in Japan in the wake of the 2011 Fukushima reactor meltdown, when the world was reassured that things were “under control.”

At stake is a huge investment already made. Official estimates of expenditure for the 2020 Tokyo Olympics from the start of the government’s promotional activities through 2019, a span of 18 years, totaled roughly ¥32 trillion. In the event of cancellation, some ¥20 trillion of that stands to be lost. So not to host the games at all would be akin to delivering a “coup de grace” to Japan’s economy.

By mid-March it became obvious that the 2020 Games were a bust. A week before the March 24 announcement of the agreement to hold them next summer, Nikkan Gendai (March 18) ran two full pages under the title “The experts express six uncertainties about postponement of the games.”

In a nutshell, the uncertainties were:

1) On what basis will the athletes be selected?; 2) How will costs for maintenance of the venues and facilities be covered?; 3) What will happen to the public sales of condos in the athletes’ village?; 4) What will the economic losses come to?; 5) Which athletes are likely to drop out of the picture (due to retirement before the games)?; and 6) Which events are most likely to have their outcomes affected by the postponement?

Shukan Asahi (April 10) noted that additional costs for the one-year postponement are projected to reach ¥300 billion. And where these funds will come from is a serious concern.

Take the 5,600 units in the athletes’ village near Harumi on Tokyo Bay. Some 940 have already been presold, with buyers promised they can move in after March 2023. The delay is certain to raise the issue of compensation to the buyers for any disruptions to their lives.

“If they don’t sell them, property values will drop drastically, leading to the fear that land prices throughout the metropolitan area will plummet,” Koji Moriyama, an authority on construction, was quoted as saying. He also pointed out that the delay will dash the expectations of moneyed investors from China, who had purchased some units in the hope of turning a profit.

The athletes’ village occupies 13.4 hectares, which the Tokyo government sold to 11 private developers for around ¥13 billion — a considerable discount from the land prices in adjacent areas.

Although the postponement of the 2020 Games means hard times for hotels, less has been reported of its effect on minpaku (bed and breakfast establishments). One of the operators that handles bookings and other arrangements for minpaku told Shukan Asahi that some owners have, with no other revenues in sight, decided to withdraw from the business.

The contracts for sponsorship grants by large corporations such as Toyota Motor Co. (referred to as “gold partners”) only run until the end of the 2020 calendar year. The sponsors will be under pressure to extend, but some, pleading poverty caused by the business downturn, are likely to beg off. And the shortfall? It will have to be made up for by the government — that is, the taxpayers.

The one-year postponement of the Olympics may also have an impact on activities by Japan’s yakuza, as Shukan Jitsuwa (April 16) warns.

Whenever Japan hosts a major international event such as the games, the gangs, out of deference to the authorities, typically declare a temporary cease-fire for the duration. With the Olympics on hold for a year, the ongoing confrontation between the two rival factions of the Yamaguchi-gumi, Japan’s largest crime syndicate, may soon turn violent.

“The main faction (referred to as the sixth-generation Yamaguchi-gumi) has been determined to end the schism as quickly as possible,” explained a knowledgeable source. “Now that the games are postponed, there’s no need for them to delay these efforts. So over the short term, I’m thinking the battle will intensify. I can see the storm clouds gathering.”

Author Shuhei Nire, going on the record in Shukan Shincho (April 9), threw cold water on the optimism that the world will have recovered sufficiently from the pandemic by July 2021 to enable a postponed games.

It’s not going to happen, he predicts.

In June of last year, Nire published a remarkably prophetic novel titled “Sarieru no Meidai” (“The Proposition of Sariel”), in which a deadly type of viral influenza appears in Japan, and the story’s characters are forced to hotly debate the pros and cons of holding the Olympics.

Nire is convinced that even if the nations currently being hit hard by the coronavirus make a recovery, the developing nations, with their poorer levels of sanitation, poor nutrition and weaker medical infrastructures, will be ravaged by COVID-19.

“This is particularly so for Africa,” he remarks. “Can we expect this pandemic to be over within just one year? Even if it is, will those countries be in any condition to send their athletes to the Olympics?

“Considering the likelihood that neither a vaccine nor drug treatment will be ready even 18 months from now, Prime Minister (Shinzo) Abe and International Olympic Committee President Thomas Bach have been overly optimistic in fixing the new dates,” he said.

Big in Japan is a weekly column that focuses on issues being discussed by domestic media organizations.

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