TOKYO — Organizers of the Tokyo Olympics postponed by the COVID-19 pandemic estimate the final cost of the Games at 1,423.8 billion yen, roughly double what was projected when the IOC awarded them in 2013.
Organizing committee officials, who met on Tuesday before the body disbanded at the end of the month, released the final numbers, which were boosted by the pandemic but were in an all-time high long before that.
The cost calculation is difficult to estimate due to recent fluctuations in the exchange rate between the dollar and the Japanese yen. When the Olympics opened a year ago, US$1 was worth 110 yen. On Monday, US$1 was equivalent to 135 yen, the highest level of the dollar against the yen in about 25 years.
The fall in the value of the yen means that the cost of the Olympics expressed in dollars is now around US$10.5 billion (C$13.6 billion). A year ago, the price was around $13 billion (C$16.8 billion).
Victor Matheson, a sports economist at Collège Sainte-Croix who has written extensively on the Olympics, suggested via email that most “expenses and revenues are in yen, so the exchange rate altering the dollar amounts doesn’t influence not how the event ‘is perceived’ for the organizers. »
As the Tokyo Games approached, organizers often used the .107 exchange rate. At this rate, the equivalent of 1423.8 billion yen would represent US$13.33 billion as the final price.
Matheson and fellow American Robert Baade investigated Olympic costs and benefits in a study.
They write “the damning conclusion is that in most cases the Olympics are a money-losing proposition for the host cities; they only lead to positive net benefits in very specific and unusual circumstances. »
Accurately tracking Olympic costs, who pays, who benefits, and what the Games are and aren’t spent on, is a moving maze.
Olympic organizers estimated official costs when the Games closed a year ago at US$15.4 billion (C$19.9 billion).
Four months later, organizers said costs had fallen to US$13.6 billion (C$17.59 billion). They explained that there was a big saving because no spectators were allowed to attend, which reduced security costs, venue maintenance, etc.
However, organizers lost at least $800 million (C$1.03 billion) in revenue due to no ticket sales, which the Tokyo Metropolitan Government had to cover.
A 2020 Oxford University study said Tokyo was the most expensive Olympics ever.
There is one undeniable fact: more than half of the costs were paid for by public money – the Tokyo government, the national government and other government entities.
In the few years leading up to the Olympics, government audits revealed that official costs could have been twice as high as expected, meaning the public part of the bill could be well over half.
The International Olympic Committee in its annual report says it contributed about US$1.9 billion ($2.4 billion) to cover Tokyo’s costs.
It is impossible to assess the long-term impact of the Tokyo Olympics, especially in a sprawling city like the Japanese capital where change is constant. The pandemic erased any short-term rebound in tourism.
