Our “Lane One” commentary from the Oct. 6 edition of The Sports Examiner:
PALM DESERT, Oct. 6, 2016 – The almost-audible gasp in the Olympic Movement came last week when a Tokyo government oversight force reported that the 2020 Olympic and Paralympic Games could cost more than $30 billion U.S. (converted from ¥3 trillion) if significant changes were not made quickly.
The estimated $42 billion cost of the 2008 Games in Beijing was seen as an outlier and never to be repeated. Then came the 2014 Sochi Winter Games, where the price tag – which included the re-development of the area into a year-round tourism draw – was estimated at more than $50 billion.
The 2016 Games in Rio were impacted by Brazil’s recession, but Tokyo 2020 was supposed to be different. Safe. Well managed. Efficient in all areas.
No chance. Poor leadership and governance were partly blamed for the problem.
New Tokyo Governor Yuriko Koike, who campaigned against government overspending and waste, told voters ahead of the election in August that the 2020 Games budgets were already about six times more than the original estimates during the bid campaign in 2013. Campaign rhetoric perhaps?
But the 28 September bombshell from an expert panel that the bid cost of $7.3 billion (estimated by the Associated Press) had grown to a possible $30 billion sent shivers through all sectors of the Olympic Movement. The International Olympic Committee’s desire to make the Games more affordable and attract more bidders has, for now anyway, run off the rails.
The international sports federations for canoeing, rowing, swimming and volleyball were surprised to learn – as they had not been consulted in advance – that their venues could be moved far away from Tokyo and an existing, in-city venue used for swimming. And they aren’t happy about it.
But Tokyo has the reins and it has been organizing committees – not the IOC or the sports federations – which have driven change in the Games, or been the cause for change:
- Paris in 1924 initiated the concept of an Olympic Village for athletes, which was fully realized eight years later in Los Angeles.
- The 1932 Games in Los Angeles showed a first-ever surplus for the organizing committee, along with the major change of hosting the Games over 16 days (three weekends) instead of over months as had been done previously, plus introducing the victory podium and playing of national anthems.
- Berlin’s 1936 Games introduced the pre-Games ritual of a torch relay that ended with the Opening Ceremony.
- The 1976 Games in Montreal ran up a $1 billion (Canadian) deficit, which traumatized the Movement for years to come.
- Los Angeles’s second Games, in 1984, used private financing to produce a surplus of at least $232.5 million, used volunteers instead of paid staff for most functions and stressed the use of existing facilities to hold down construction costs.
Now Tokyo, in its second Games, has the imperative to rein in costs and keep the Olympic project from being a financial time bomb in Japan. The IOC President, Thomas Bach, has said that he will work with Tokyo “in a constructive way” on the issues.
He doesn’t have much choice, because the options are limited:
- The IOC and international federations could browbeat Japan into living up to its bid book promises. One can omagine how that will play in Japan, and potential future bid cities.
- The IOC and international federations could, in the worst case, sue Tokyo to enforce its Host City Contract and the bid book promises. The blowback will be even worse.
- The IOC could vote to remove the Games from Tokyo, something it has never done to a Host City, although it was whispered about Athens prior to 2004 and Rio de Janeiro in the run-up to the 2016 Games. There will be more than a few in Tokyo who will say “good riddance.” And it will vindicate Rome Mayor Virginia Raggi’s stance against the Games – based on cost – which imploded the 2024 Games bid by Rome.
In fact, this is really not an option because there is almost nowhere else to go. Although there are multiple cities with the sports infrastructure to host a Games on short notice, the problem is the Olympic Village. Host cities which build villages turn them into housing after the Games and these facilities are, therefore, not available any more. Only Los Angeles, with the massive student housing built up at UCLA and USC, could really be considered … and the universities book summer conferences and programs for their summers years in advance.
Tokyo will now set the standard for how organizing committees deal with cost expansions of the Games. And the actions taken by the Tokyo government – under Koike’s leadership – and the separate organizing committee, will impact the choice of host for 2024 and well beyond. The IOC and its partners will do well to work closely with Tokyo to avoid a repeat of the all-too-negative four-year lead-up it just finished in Brazil.
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¶ Rich Perelman has served and supported organizing committees of 20 multi-day, multi-venue events, including five Olympic Games, in the U.S., Canada and Europe. In addition to nearly 100 books and pamphlets, he has written for the Los Angeles Times, Track & Field News, Universal Sports and many other publications.