Sports world takes an economic hit from postponement of the Olympics
The economic impact of postponing the 2020 Summer Games is now rippling beyond the host city of Tokyo to the sports world at large.
On Thursday, the international cycling federation announced a series of drastic cost-cutting measures to counteract financial losses from the Games and other events put aside because of the coronavirus pandemic.
The federations that govern individual sports were expected to share more than $500 million in revenues from Tokyo, payments that now could be delayed until the Games take place in the summer of 2021.
“Our international federation is going through a crisis that we haven’t experienced since the Second World War,” said David Lappartient, president of Union Cycliste Internationale.
The Olympic flame is removed from public view as the coronavirus prompts a state of emergency in Japan after the postponement of the Tokyo Games.
While UCI struggles, imposing pay cuts and furloughs throughout its staff, other federations have expressed concerns about their finances.
During a recent teleconference, International Olympic Committee executives were asked if they might offer an advance on expected Games payments to the federations under their umbrella.
“It’s too early for us to speculate,” said Kit McConnell, the IOC sports director. “We just acknowledge the challenge a lot of them are having.”
Meanwhile, economic concerns have cast a shadow over Tokyo and its preparations for 2021.
Amid a recent spike of COVID-19 cases in the capital city and surrounding areas, the government has declared a state of emergency and the Japanese economy is reportedly teetering on recession.
A nation yearns for sports, a hint of normalcy, amid the coronavirus pandemic. But infectious disease experts wonder: Is it realistic?
“The uncertainty over the economic outlook is very high as it remains unclear when the global coronavirus infection will end,” Haruhiko Kuroda, head of the Bank of Japan, said in the Japan Times.
A downturn could further hurt Tokyo 2020 organizers already dealing with the cost of postponement.
A joint task force made up of IOC executives and organizers will work to eliminate some of those added expenses. Estimates have placed the overall losses at $2.7 billion to $6 billion.
“I’ve read the numbers,” IOC executive Christophe Dubi said recently, “but these are really speculations because I can guarantee the work is really ongoing and it’s tens of thousands of line items of a budget that need to be reviewed.”
Addressing the “additional costs,” Tokyo 2020 organizers stated: “The Japanese government has reiterated that it stands ready to fulfill its responsibility for hosting a successful Games.”
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