IOC sets aside $800 million to cover postponed Tokyo Olympics

AP, Kyodo, Reuters

The International Olympic Committee set aside $800 million on Thursday for loans and payments arising from the pandemic that forced the 2020 Tokyo Olympics to be postponed.

It is still unclear how big the total postponement bill will be with Olympic organizers and public authorities in Japan facing extra costs estimated to run into billions of dollars.

IOC President Thomas Bach, spoke via teleconference following an online meeting of the IOC's executive board, the first since the opening date for the Tokyo Games was rescheduled for July 23, 2021. He said the board discussed the uncertainty of the coronavirus pandemic and how it was affecting the Tokyo Olympics in terms of costs, as well as how it may impact Olympics in the future once the current crisis passes.

"Nobody knows what the world looks like tomorrow," Bach said. "You can't put a number on something you don't know is going to happen."

A sum of $150 million will be available to make loans to sports governing bodies and more than 200 eligible national Olympic committees. They have cash flow issues while unable to organize events and were due to get payments this year for the Tokyo Games.

The loan program is being run with Switzerland’s federal government, which announced aid Wednesday for Olympic sports federations based in the country. The IOC will put up half the money for those loans, and federal and state authorities will provide 25 percent each.

A detailed breakdown of how the remaining $650 million could be allocated will be formulated in the months ahead, IOC Chief Operating Officer Lana Haddad said.

"It is a little too early to pull together all known and unknown costs,” Haddad told reporters on a conference call after an IOC board meeting held remotely.

The IOC had revenue of $5.7 billion from the 2013 to 2016 Olympic cycle. That figure would likely have approached $7 billion for the next four-year period tied to the Tokyo Games.

Before the postponement, Japanese organizers officially said the bill for the games would be $12.6 billion. However, a government audit in 2019 said it was at least twice that, mostly in taxpayer money.

Bach said all of the IOC’s 14 top-tier sponsors — whose deals are worth more than $1 billion combined in the 2017 to 2020 period — are committed to fulfilling their support through 2021.

In its most recent accounts, for 2018, there was $897 million in the Olympic Foundation portfolio intended to "cover the IOC’s operating cash requirements in the event of a cancellation of any future Olympic Games.”

Because of the additional expenses demanded by the postponement, Bach said that once the chief priorities are ensured, the IOC would be extremely open minded about cost-cutting measures, including expenditures on hospitality.

"This situation requires compromises, requires sacrifices by everybody," Bach said. "Therefore we are leaving no stone unturned in this respect to reduce the cost while maintaining the spirit of the games and the quality of the sports competition.

"(Once we get) around these principles there are no taboos and everything is on the table and this also includes the service level for the stakeholders of the Olympic movement."

Bach said he expected the hard looks now being toward cost cutting could provide lessons for future Olympics.

"We are already in discussion with Paris 2024 on a wider scope about what can be transferred from the new measures we are taking in Tokyo," he said. "How can Paris 2024 benefit from this new approach in line with a new norm … looking into reduction of costs or — better said — focusing on the essentials of the games?"

Bach praised the work of the task force charged with transforming a plan for an event in 2020 into one for 2021, and insisted that the main priority would be the safety of all the principals.

Although public health experts around the world have said the games would not be feasible without a vaccine for the coronavirus, Bach said the IOC would rely on advice from the task force and the World Health Organization.

"All this will depend on the developments in the months to come. We are now one year, two months away," Bach said Thursday when asked how important vaccines were to the Summer Games in 14 months' time. "It is way too early to draw any conclusions now."

Six months after the Tokyo Olympics are due to close, the 2022 Winter Games are scheduled to open in China where the coronavirus outbreak started.

Bach said preparations for the Beijing Olympics "continue to go very well” and the back-to-back timing could be a benefit.

"This will keep and even raise awareness of the world for the Olympic Games at a very high level,” he said.

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