What is the loss of the empty Tokyo Olympics?

The Tokyo Olympics is not only a "revival sustenance", but also a "political examination"

In one week, the 2020 Tokyo Olympics will officially open. Looking back, almost two decades have passed since the last time Tokyo hosted the world competition (the 2002 World Cup in Korea and Japan). Therefore, when the opportunity to host the 2020 Tokyo Olympics is ushered in, the whole country of Japan is undoubtedly full of joy and anticipation.

All walks of life in Japan look forward to boosting investment and consumption through the construction and holding of this Olympics, and bringing the long-awaited Olympic demand to the long-depressed local economy. However, due to the prevention and control of the epidemic, the already ill-fated 2020 Tokyo Olympics and Japan’s economy have worsened the situation. The global sports event that was supposed to welcome guests from all corners of the world and full of friends had to embark on the road of "empty stadiums and closed doors.".

Behind the "closed-door", the first thing to face is a sharp drop in ticket revenue. So apart from tickets, how big are the direct and indirect economic losses caused by the "empty field" in Tokyo? Here, we will take inventory for you one by one.

How much is the direct loss of income?

The primary impact of empty games is the sharp drop in ticket revenue. We can carefully calculate this "empty field account" based on the relevant data that has been disclosed.

First, look at the number of tickets sold.

According to statistics, pre-sale tickets for the Tokyo Olympic Games have been launched in 2019, and 3.63 million tickets have been sold before the empty venue was announced. Among them, the number of overseas tickets is about 900,000 (600,000 tickets for the Olympic Games and 300,000 tickets for the Paralympics), and overseas audiences account for about a quarter of the total audience.

Secondly, from the perspective of ticket prices.

According to public information, the price of tickets for the opening and closing ceremonies of the Olympic Games can reach up to 300,000 yen (approximately RMB 17,649), and the ticket prices for individual competitions are different. The price of popular events is higher, up to 130.000 yen ( Approximately RMB 7650), appeared in track and field competitions.

Finally, from the overall loss of tickets.

It was originally expected that the ticket revenue for the Olympic and Paralympic Games could reach about 90 billion yen (approximately 5.3 billion yuan), but since it was announced that all the stadiums except for some football and cycling events will be empty, the Olympic and Paralympic Games are expected to be vacant. The ticket revenue can only reach billions of yen, and the loss exceeds 80 billion yen.

Although, according to relevant data from previous Olympics, ticket revenue is not the main source of income for the Olympic Organizing Committee. Commercially operated television broadcasting rights and the Olympic sponsorship plan are the more important part. However, the television broadcasting rights contract is for the broadcaster and the international Signed by the Olympic Committee-most of its broadcast income goes to the IOC's pockets, but the ticket income is the actual income plate during the Tokyo Olympic Games. The nearly a hundred times the ticket revenue gap is undoubtedly the most "visual" loss of the Tokyo Olympics after the announcement of the empty stadium.

In addition, closely related to the empty field measures is the loss of revenue from the service industry during the Olympic cycle.

The policy of empty venues will undoubtedly cause a serious blow to the Japanese tourism service industry

The Olympic Games is not only a global sports event, but also a rare and excellent business opportunity for the host country. From the initial increase in investment, to tourism and commercial consumption during the holding period, to the import and export demand of related products, the "troika" at the macroeconomic level can effectively promote the growth of the national economy. The restructuring of venues after the Olympic Games and the comprehensive utilization of other infrastructures can provide the host with strong momentum for subsequent economic growth.

Historical data shows that the overall revenue of the 2000 Sydney Olympics reached 6.3 billion U.S. dollars. By 2008, the direct economic impact of the Beijing Olympics was as high as 41.932 billion U.S. dollars. However, during the Beijing Olympics, the display of national strength and cultural output is more important. At a certain level, these are priceless economic impacts.

After the vacancy, overseas audiences cannot go to Japan to watch the game. The direct reduction in the ticket revenue, and the indirect reduction in the service, consumption and tourism income brought by millions of overseas audiences.

But this part of the loss may be "acceptable."

Although many economists pointed out that the loss of tourism and consumption caused by the Olympics not accepting overseas audiences is expected to reach 150 billion yen, we also need to pay attention to the fact that under the background of the prevention and control of the new crown epidemic, tourism in most countries And commercial consumption is declining sharply, and sluggish international tourism may continue for several years. Therefore, even if the audience is "turned out", compared with the long-term downturn in international tourism and related service trade income, the short-term loss of Olympic tourism income is almost negligible.

For reference, in the 2012 London Olympics, although the consumption of overseas tourists surged by nearly 18% during the Olympics, it fell to a 21-month low after about two months.

How much is the indirect loss of income?

Let's first look at the business and sponsorship field.

The empty Olympic Games will undoubtedly affect the actual rights and interests of sponsors. But for the organizers, there may not be huge losses.

About 70% of the overall revenue of the International Olympic Committee comes from the broadcasting rights of the game, and another 20% of the revenue comes from advertising sponsors. According to public data released by the International Olympic Committee in 2020, the domestic sponsors of the 2020 Tokyo Olympics are divided into three levels, including 15 gold partners, 32 official partners and 19 official supporters, totaling 66 sponsors For enterprises, before the Olympic Games announced the postponement, the contract value signed by the Tokyo Olympic Organizing Committee and sponsors had exceeded US$3.3 billion, which was three times as much as the 2008 Beijing Olympic Games held in Asia.

This sponsorship amount not only hit a record high in Olympic history, but also exceeded the sum of the sponsorship amount of the last two World Cups, refreshing the sports industry's awareness in the field of market development.

After the official announcement of the extension of the 2020 Tokyo Olympic Games, the sponsors of "Hardly Riding a Tiger" agreed to extend the sponsorship contract for another year. Some sponsors renewed their contracts with the Tokyo Olympic Organizing Committee in December last year, and were required to provide 22 billion yen in additional funds, making the total sponsorship more than 350 billion yen (approximately 21 billion yuan). The amount of sponsorship has reached a new high in sports history.

The Olympic Organizing Committee always has a way to turn "danger" into "opportunity," but for those sponsors, life is going to be a lot "sad."

On the one hand, the sponsorship budget has seriously exceeded expectations-due to the renewal of the contract, sponsors have to spend a large number of sponsorship fees. Fortunately, not all sponsorships are in the form of cash. Some sponsors also provide physical goods and services.

On the other hand, marketing plans and activities were frustrated. In 2020, the epidemic caused the marketing activities of a large number of Olympic sponsors to be upset; in 2021, due to the impact of epidemic prevention and control, sponsors' local promotion, roadshows and customer sponsorship plans will not be formed. Canon, one of the domestic sponsors in Japan, originally designed marketing activities such as the "Olympic Promenade" and the beachside audience photo area, but they have all been canceled at this stage.

Aside from these problems, what makes them even more troublesome is the subtle "anti-Olympic sentiment" of the public.

In a poll conducted in April this year, the percentage of Japanese people hoping that the Olympics would end has increased significantly. Such "anti-Olympic sentiment" is by no means good news for sponsors. After all, the importance of Japanese people as the main consumers to sponsors and the importance of the Tokyo Olympic Organizing Committee are not the same.

However, according to the latest poll by the "Yomiuri Shimbun", as the Olympics approached, the Japanese public's opposition to the Tokyo Olympics showed signs of easing.

In the past few domestic polls in Japan, there have been voices against hosting the Olympics.

Outside of business, other losses may be more "valued" by Japan.

The Tokyo Olympics in 1964 showed the world the scene of Japan’s post-war rejuvenation, as well as the rapid development of high-tech and infrastructure. It laid the foundation for the image of Japan’s post-war economy, science and technology power, and cultural power. It is a historical part of Japan’s economic development. An important turning point for China.

In Buenos Aires in 2013, when Jacques Rogge, then President of the International Olympic Committee, announced that Tokyo defeated Istanbul, Turkey and won the right to host the 2020 Summer Olympics, the whole of Japan was boiled and the Abe government looked forward to using the Olympics. "Dongfeng" boosted Japan's stagnant economy and once again showed the people of the world a post-disaster Japan's recovery.

In Rio de Janeiro in 2016, at the closing ceremony of "Eight Minutes in Tokyo", the Japanese used technology display, cultural IP and external promotion to amaze audiences all over the world, not to mention, finally, Shinzo Abe became Super Mario wearing ahead. Red Riding Hood and holding a red ball appeared in front of the world. At that moment, not only could it be seen that Japan attached great importance to the Tokyo Olympics, but also made the whole world look forward to the Tokyo Olympics.

But in Tokyo in 2021, Abe, who was actively bidding for the Olympics, has resigned due to illness. For the succeeding Suga Yoshihide administration, the Tokyo Olympics is not only a "revival sustenance", but also a "political test."

People will exaggerate and strengthen their pessimism to a certain extent in difficult situations. Before the opening of the European Cup, the remarks and opinions on low-profile matches lingered on the European continent, and with Italy's victory, the football "Renaissance" brought the 2020 European Cup to a successful conclusion.

Similarly, for the Tokyo Olympics, compared to the worst case-cancellation, the empty field may not be an optimal solution. As long as the competition is successfully held, the eyes of the people of the world will still be focused on this, and the new round of "Olympic effect" can still affect Tokyo.

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