How the Tokyo Olympics Became the Most Expensive Summer Games Ever
Narrator: The Tokyo Olympics made history even before they began. They’re the first Games to ever be postponed. They’re also on track to be the most expensive Summer Olympic Games ever.
Alastair Gale: So when Japan won its bid to host the Olympics in 2013, it said that it would cost around $7.4 billion. But before the pandemic, the budget had risen by 70% to $12.6 billion, and that’s not really surprising.
Narrator: Later, Japan’s Board of Audit said the cost would exceed $20 billion. That was before pandemic-related costs set in.
Alastair Gale: So the biggest costs for the Olympics are the facilities: the new National Stadium here in Tokyo, as well as several other large facilities, aquatic center and others that have been built for the Games. And those cost over $3 billion. And there was about the same amount that was spent on renovating other facilities to bring them up to standard for the Games. So the whole thing, in terms of venues, was around $7.5 billion. And the other big cost is the operational budget for the Olympics. It’s around $2 billion.
Narrator: Almost every Olympics ends up going over budget. Bids are usually an optimistic estimate.
Alastair Gale: What’s different in Tokyo, of course, is that we’ve had this one-year delay and we’ve also had the pandemic. So the one-year postponement meant that there were additional costs incurred for having to renegotiate contracts for venues, for having to keep staff on for an additional period and various other things, which added to the overall budget.
Narrator: And the public risk from the pandemic hasn’t gone away, so the Tokyo Olympics are now proceeding with COVID countermeasures that require new costs, manpower and infrastructure. Together, the postponement and COVID measures will add an estimated $2.5 billion to the Games’ budget, according to event organizers. On top of those direct costs, COVID is also taking away much of Japan’s ability to recoup what they’ve spent.
Alastair Gale: Ticket sales would be around $800 million and now they’ll be close to zero because there’ll be almost no spectators. And there’ll be almost no income from visitors. Of course, athletes and officials who have come here from overseas might spend some money but nothing like the amounts that the organizers were hoping for from spectators who would fill the stadiums, buy merchandise, you know, spend money in hotels and restaurants, and that could be, some economists say, you know, as much as $2 billion, and now that’s lost.
Narrator: Corporate sponsors have contributed around $3 billion to the Games and the IOC has contributed $650 million to help cover the extra costs resulting from the pandemic. Still, that leaves the bulk of the costs to Japan with little ability to recoup in the short term. But even the most expensive Summer Olympics in history pales in comparison to the overall cost of the pandemic.
Alastair Gale: Japan has spent around $800 billon on stimulus packages, three of them, because of COVID. The pandemic is obviously the…the most expensive thing to deal with here; it’s not the Olympics. But if the Olympics makes the pandemic worse, and there has to be, you know, new stimulus measures, those could be far larger than the actual budget of the Olympics.