Tokyo Olympics 2020 delay to cost organisers $2.8 billion loss?

The Olympic Games is one of the most significant competitive sporting events, as it witnesses athletes from across the globe compete in various sports. Nonetheless, it has been delayed this year, until 2021, due to the prevailing challenges for the COVID-19 pandemic.

Athletes and fans were eagerly waiting for the 2020 edition of the Olympic Games, slated to be held in Tokyo. Nonetheless, it has been postponed until next year, owing to the challenges surrounding the prevailing CIVID-19 pandemic.

It is somewhat a piece of good news that the competition has been postponed, rather than being cancelled entirely. However, it has come for a price, as it has reportedly cost the Japanese organisers a loss of around $2.8 billion.

According to a report by Reuters, the Tokyo metropolitan government has to pay out ¥120 billion, which includes ¥103 billion to the organising committee, along with ¥71 billion to the Japanese government. Nonetheless, the International Olympic Committee (IOC) had previously stated that it would carry out the cost of $650 million as postponement charges.

“Tokyo’s costs are Tokyo’s costs. Tokyo 2020’s (allocation) is revenue that we can secure. Within this revenue, we have additional sponsorship that we have requested from partners, and we also have insurance,” said Toshiro Muto, CEO of 2020 Tokyo Games.

As per the report, the competition is also behind the ¥27 billion contingency fund, which was decided during last year’s budget, as a part of cost cover. Furthermore, the official budget that was agreed upon in December 2019 was $12.6 billion.

“I had a video conference last night with IOC President Bach. President Bach expressed his strong determination that the IOC and us should work as one team and cooperate to ensure the success of the Games,” said Yoshiro Mori, president of the 2020 Tokyo Games.

As of now, the competition is all set to be held between July 23-August 8 next year. Meanwhile, if reports are to be believed correct, in case it won’t be feasible enough to conduct the games even at the time, it would most likely be scrapped.