Accurately tracking costs of the pandemic-delayed 2020 Tokyo Olympics is a moving maze due to the recent volatility in the exchange rate between the dollar and the Japanese yen
Accurately tracking costs of the pandemic-delayed 2020 Tokyo Olympics is a moving maze due to the recent volatility in the exchange rate between the dollar and the Japanese yen
Organizers of last year’s COVID-delayed Tokyo Olympics had expected the final cost of the Games to be ₹1.42 trillion, nearly double what the IOC had forecast to be awarded to them in 2013.
Tokyo Olympic officials, meeting on Tuesday before the body’s dismemberment at the end of the month, were to detail the final numbers, which were boosted by the pandemic but were in the record range long before that.
Calculating the cost is challenging due to the recent fluctuations in the exchange rate between the dollar and the Japanese yen. When the Olympics opened a year ago, $1 bought 110. On Monday, $1 bought the dollar against 135, the yen, the highest level in nearly 25 years.
$10.5 billion
The decline in the value of the yen means that the cost of the Olympics, quoted in dollars, is now about $10.5 billion. A year ago it was worth about $ 13 billion.
Recommended by email to Victor Matheson, a sports economist at Holy Cross College who has written extensively on the Olympics AP That most “expenses and revenues are in yen, so exchange rates changing dollar amounts do not affect the way organizers ‘feel’ them.”
For the Tokyo Games, organizers often used an exchange rate of 107. At that rate, the equivalent of 1.42 trillion would have $13.33 billion as a final price tag.
Matheson and fellow American Robert Baade researched Olympic costs and benefits in a study titled “Going for Gold: The Economics of the Olympics.”
They write “the overarching conclusion is that in most cases the Olympics are a money-losing proposition for the host cities; they achieve a positive net profit only in very specific and unusual circumstances.”
Exact cost, a moving maze
Accurately tracking Olympic costs — who pays, who benefits, and what the Games cost and what doesn’t — is a moving maze.
Olympic organizers estimated the official cost when the Games closed a year earlier at $15.4 billion.
Four months later, organizers said the cost had dropped to $13.6 billion. He said that there was a huge savings as no fans were allowed to be involved, reducing security costs, site maintenance etc.
However, the organizers lost at least $800 million in revenue from no ticket sales, which fell to the Tokyo Metropolitan Government to cover.
most expensive olympics
A study by Oxford University in 2020 said Tokyo was the most expensive Olympics on record.
There is an indisputable fact: more than half of the cost was paid for by public money – the government of Tokyo, the national government and other government entities.
In the years leading up to the Olympics, government audits found that the official cost could be twice the stated amount, meaning the public share of the bill could be as much as half.
The International Olympic Committee said in its annual report that it contributed about $1.9 billion to cover the cost of Tokyo.
long term effects
It is impossible to assess the long-term impact of the Tokyo Olympics, especially in a huge city like the Japanese capital where change is stagnant. The pandemic wiped out any short-term tourism boom. Local sponsors, who paid more than $3 billion to join the Olympics, were not very happy, according to local reports.
Dentsu Inc., a Japanese advertising and public relations company. may benefit. It directed marketing for Tokyo 2020, received commissions to add sponsors, and has been linked to an IOC vote-buying scandal involving Tokyo receiving the Games.
The scandal forced the resignation in 2019 of IOC member Tsunekazu Takeda, who also headed the Japanese Olympic Committee.
The Games were hit with other scandals, including the resignation of organizing committee chairman Yoshiro Mori, who made sexist remarks about women. The former Japanese prime minister stepped down five months before the opening of the Games.
Tokyo billed itself as a “safe pair of hands” to receive the Games.
Tokyo will also be remembered as the first Games that were postponed by a year, and then held mostly without fans in a so-called bubble.
The most important legacy is certainly the $1.4 billion National Stadium designed by Japanese architect Kengo Kuma.
Matheson and Baade wrote, “The goal should be that the cost of hosting match the benefits that are shared to include ordinary citizens who fund the event through their tax dollars.” “In the current system, it is often far easier for athletes to gain gold than the hosts.”