Cutbacks help to trim ¥150 bil. off cost of Games

The Yomiuri Shimbun

December 3, 2021

The estimated cost of hosting this summer’s Tokyo Games has come down by more than ¥150 billion as spectator bans meant personnel costs and other expenses were significantly reduced, The Yomiuri Shimbun has learned.

According to officials of the Tokyo Organizing Committee of the Olympic and Paralympic Games, the savings exceeded the lost ticket revenue.

The organizing committee, the Tokyo metropolitan government and the central government are currently calculating the total cost of hosting the event.

No additional costs are expected, according to the sources.

The total cost for the event was estimated at ¥1.35 trillion in December 2019, before the decision was made to postpone the Games for a year due to the COVID-19 pandemic.

In December 2020, the organizing committee, the Tokyo metropolitan government and the central government agreed to cover an additional ¥294 billion, including ¥96 billion for coronavirus measures, with the budget climbing to ¥1.644 trillion.

Ticket sales were expected to be the main revenue source of the Games, with about ¥90 billion estimated to be recouped through the sale of about 10 million tickets in Japan and overseas.

However, foreign visitors were banned from entering Japan in March due to the pandemic, and a decision was made just before the Olympics to ban spectators from most venues.

The total number of spectators was only about 60,000, including schoolchildren who were allowed to watch some events under a special program.

According to an agreement made when Tokyo bid to host the Games, if the organizing committee ran out of funds, Tokyo as the host city would have to bear the burden, and if it did not, the central government would have to cover the shortfall.

The lost ticket revenue raised concerns about the impact of the additional burden. The metropolitan government intended to ask the central government to bear part of the cost due to the difficult financial situation Tokyo was in because of spending on COVID-19 measures.

Although more than ¥1.6 trillion had been budgeted for the Games, the actual total will likely be less than ¥1.5 trillion, according to the latest calculations by the organizing committee, the Tokyo metropolitan government and the central government.

This was mainly because most Games events were held without spectators, which reduced personnel costs and other expenditures, as fewer workers were needed for such tasks as conducting temperature and baggage checks at venues, treating spectators suffering from heatstroke and guarding facilities.

The organizing committee, Tokyo and the central government are expected to reach an agreement by the end of this year on how the total cost will be shared among the three parties.

As it stands, more than ¥10 billion is likely to be returned to Tokyo and the central government, neither of which are expected to incur additional Games-related costs.