Tokyo closes balance sheet for very expensive Olympics

Stephen Wade, Associated Press

TOKYO. Organizers of the Tokyo Olympics, postponed due to the COVID-19 pandemic, estimate the final cost of the Games at 1,423.8 billion yen, about double what was forecast when the IOC awarded them the award in 2013.

Organizing committee officials, meeting on Tuesday before the body was disbanded at the end of the month, released the final numbers, which were raised due to the pandemic but had been at an all-time high long before.

The cost calculation is difficult to estimate due to recent exchange rate fluctuations between the dollar and the Japanese yen. When the Olympic Games opened a year ago, 1 US dollar was worth 110 yen. On Monday, $1 was equivalent to 135 yen, the highest dollar against the yen in about 25 years.

The depreciation of the yen means the dollar value of the Olympics is now around $10.5 billion (CAD 13.6 billion). A year ago, the price was around $13 billion (CA$16.8 billion).

Victor Matheson, a sports economist at Sainte-Croix College who has written extensively about the Olympics, suggested by email that most “expenditures and revenues are denominated in yen, so the exchange rate that changes dollar amounts does not affect how the event is perceived.” “. for organizers.

As the Tokyo Games approached, the organizers frequently used the 0.107 exchange rate. At this rate, the equivalent of 1,423.8 billion yen would represent a final price of $13.33 billion.

Matheson and his compatriot Robert Baade studied Olympic costs and benefits in a study.

They write: “The ill-advised conclusion is that, in most cases, the Olympic Games are unprofitable for the host cities; they lead to a positive net benefit only in very specific and unusual circumstances.”

Accurate tracking of Olympic spending – who pays, who benefits, what the Games are and isn’t spent on – is a moving maze.

The Olympic Games organizers estimated the official costs at the close of the Games a year ago at US$15.4 billion (CAD$19.9 billion).

Four months later, organizers said costs had fallen to US$13.6 billion (CAD$17.59 billion). They explained that this is a big savings because spectators are not allowed in, which reduces the cost of security, hall maintenance, etc.

However, the organizers lost at least $800 million (CA$1.03 billion) in revenue due to a lack of ticket sales that the Tokyo Metropolitan Government was supposed to cover.

A 2020 Oxford University study found that the Tokyo Olympics were the most expensive Olympics in history.

There is one indisputable fact: more than half of the costs were paid by public money – the Tokyo government, the national government and other state structures.

In the years leading up to the Olympics, government audits showed that official spending could be twice as high as expected, meaning that the government portion of the bill could be more than half.

The International Olympic Committee says in its annual report that it has allocated about US$1.9 billion ($2.4 billion) towards Tokyo’s expenses.

It is impossible to estimate the long-term impact of the Tokyo Olympics, especially in a city as vast as the capital of Japan, where constant change is taking place. The pandemic has wiped out any short-term rise in tourism.