Olympic scandal / Japan eyes Olympic reforms in run-up to 2030 Winter Games bid

The Yomiuri Shimbun

6:00 JST, October 29, 2022

This is the fourth and last installment of the series featuring corruption behind the 2020 Tokyo Olympics and Paralympics.

In the run-up to Sapporo’s bid to host the 2030 Winter Games, Japanese Olympic Committee President Yasuhiro Yamashita and Sapporo Mayor Katsuhiro Akimoto released a joint statement Sept. 8 that included the phrase, “We intend to overhaul the way Olympic sponsors are selected.”

The host for the 2030 Games will be decided next autumn.

The statement also suggests setting up a third-party committee to check sponsorship contracts and conduct background checks on candidates who wish to join the committee.

For the Tokyo Games, major advertising agency Dentsu Inc. was selected to serve as the event’s sole marketing agency. As such, the firm had the power to select sponsors. However, the selection process was conducted behind closed doors.

In July, suspicions arose over the possibility that a former executive board member of the Tokyo organizing committee, Haruyuki Takahashi, may have acted as an intermediary between sponsor companies and the Tokyo organizing committee. Takahashi has subsequently been arrested four times on charges of receiving bribes, shocking those involved in the bid for the Sapporo Games.

A survey by the city showed that the bid is only backed by about 50% of the city’s residents. “We can’t let this figure fall any further,” a city official said. “We have to show that we’re committed to [Games-related] reforms in Sapporo.”

In the wake of the bribery allegations, the city government began regularly consulting the JOC via phone and emails with the aim of putting out a statement. The document was green-lighted by Yamashita, 65, and Akimoto, 66, days before its release.

“These incidents have seriously damaged the image of the Olympics and Paralympics,” Yamashita said in the statement. “We will undertake reforms in a diligent manner.”

Eliminating lobbying

The push for reforms is gathering pace. In 2019, the International Olympic Committee decided to stop selecting host cities via a voting process. Until then, lobbyists would approach vote-wielding IOC commissioners and urge them to support whichever city they were pushing. In 2013, a massive lobbying event for Tokyo’s bid — dubbed the “Dentsu Gala” party — was held at a palace in Moscow.

Following the IOC’s abolishment of voting, it introduced a system in which commissioners and athletes’ representatives consult with candidate cities to determine the most suitable host and then seek approval at a general meeting. This selection process will be used for the 2030 Games. Though a few grey areas remain, it is hoped that this method will eliminate lobbying.

Tokyo’s successful Games bid cost ¥24 billion, including payments to major advertising and consulting firms in 2016 and 2020. In contrast, the Sapporo bid will only run to about ¥1 billion.

“With the demise of lobbying, Dentsu can no longer brandish its ‘divine power’ vis-a-vis the IOC,” said Olympic analyst and former JOC councilor, Ryoichi Kasuga, 67. “If the [Sapporo] bid is successful, there’ll be no Dentsu-like concentration of power before the Games kick off.”

Tarnished image

The recent scandals have tarnished the Tokyo Games’ legacy. This has given rise to fears about a potential lack of sponsors if the 2030 Games are held in Sapporo.

It has been estimated that it could cost as much as ¥300 billion to host the Games in Sapporo. The costs, excluding expenses for the construction of facilities, would be covered by funds generated through ticket sales, licensing and other sources, not taxpayer money.

However, as sponsorship revenue from domestic companies is estimated to total around ¥80 billion to ¥100 billion, securing sufficient funds may not be easy.

“Our company is still reeling from the [alleged bribery] incidents,” said an executive of a Tokyo Games sponsor. “The benefits of sponsorship, such as boosting the company’s brand image, are uncertain and risky. Without a reform plan, we’d be reluctant to participate in the Sapporo Games.”

A former JOC official opined, “If Dentsu were to be removed from its central role in recruiting sponsors, it would be difficult for the [envisaged] Sapporo Games to run smoothly.”

Centralized power

In exchanges with The Yomiuri Shimbun, Dentsu refrained from providing details of its exclusive contract for the Tokyo Games, saying doing so could interfere with the ongoing investigation. When asked about possible involvement in the 2030 Games, the company said it could not offer any insights until the host city had been decided.

“Dentsu’s over-abundance of power led to poor governance of the organizing committee,” said Waseda University Prof. Taisuke Matsumoto, a lawyer familiar with crisis management in sports. “There must be mechanisms in place to curb the concentration of authority, such as contracts with third-party monitors and the hiring of multiple advertising agencies.”

Looking ahead, Japan’s hosting of future Games is contingent on whether organizers can break away from Dentsu’s time-wrought “domination” and revive the image of the scandal-tainted Tokyo Games.

The Sapporo bid will serve as a touchstone for restoring confidence in the Olympics.