Tokyo Olympic and Paralympic sponsor companies are considering whether to extend their sponsorship contracts for the postponed games as the novel coronavirus crisis casts a cloud over business performance and the games' success.
The sponsorship contracts are set to expire at the end of this month. The Tokyo Games organizing committee is in the final stages of negotiations for extensions.
The government is seeking to host the Olympics and Paralympics as a testament to humankind's victory over the coronavirus.
Business leaders are also pushing for the games' success.
Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, says, "We'll achieve a balance between infection prevention and economic activity in the big project."
There are 14 worldwide sponsors, including Toyota Motor Corp. and Bridgestone Corp., that will continue their sponsorships even after next year's games, as well as 67 domestic sponsors, such as Nippon Telegraph and Telephone Corp. and Canon Inc., that will only sponsor the Tokyo Games.
Previously, the Tokyo Games budget put revenue from the domestic sponsors at ¥348 billion, or 55% of the organizing committee's total revenue.
On Dec. 4, the committee announced that additional costs related to the postponement will total some ¥294 billion, including fresh expenses for coronavirus measures.
Of the sum, ¥103 billion will be covered by the committee. It plans to secure the amount partly by collecting around ¥26 billion in additional sponsorship funds from domestic sponsors that extend their contracts.
Sponsor companies are assessing the conditions for extensions to determine whether to continue their contracts.
NEC Corp. President Takashi Niino said during a news conference in late November that the electronics maker is "basically considering extending" its sponsorship contract. So far, no company has signaled its intention to withdraw from its sponsorship agreement.
"There is no way we will quit as a sponsor," a leader of a sponsor company said. "The Olympics should be held, also in order to call foreign tourists back to Japan."
But it is unclear how the Summer Games will be held, as the end of the coronavirus pandemic remains out of sight.
One company voiced concern about the advertising effects of sponsorships commensurate with the costs if the games is held without spectators.
The additional costs amid the coronavirus crisis have also led companies to think twice about their commitment. Some say that they will wait until other companies announce their decisions before making their own conclusions.
Expectations for the organizing committee to deal with sponsors' concerns are mounting. Mitsui Fudosan Co. is calling for the committee to take measures in lockstep with the central and Tokyo metropolitan governments to simplify the games in order to create momentum in support for the event.
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