After long contemplations and debates on cancellation and postponement, the Tokyo Olympics finally got underway last week. To host an event of this magnitude is already a big task but the mounting challenges due to COVID-19; the rising delta variant cases in Japan and globally have affected both the cost and management of the games. Since teams started arriving in Japan at the start of this month, there have been 198 positive cases in the Olympic Village which include 23 athletes.


In 2013, when the hosting rights were awarded to Japan, the Tokyo Olympic organisers deemed the total cost of the event to be around $7.5 billion. This cost was revised to $12.6 billion in December 2019. But after one year’s postponement due to COVID-19 and coupling other logistical factors the Tokyo Games cost has officially skyrocketed to $15.4 billion.

On the other hand, Japanese government auditors are claiming that the cost will go above $20 billion, three times the original cost. Japanese papers like Nikkei and Asahi have claimed that the final cost will be around a whopping $28 billion.

Three venues were built specifically for the Games for $3 billion. This included the National Olympic Stadium with 68,000 capacity, a swimming and volleyball arena. Eight venues were upgraded for different sports.

Cost exceeding the budgeted amount; it is not something that we haven’t seen before. This has been the case in Sarajevo, Athens, Beijing, and Rio to name just a few cities, where crumbling stadia and Olympic Villages serve not as proud monuments to athletic achievement, but rather as somber symbols of catastrophic financial mismanagement but in case of Tokyo it has gone to an unprecedented level.

The 1976 edition of the Olympics in Montreal surpassed its cost by 720%. Although at the time it costed around $9.7 billion but it was considerably high. In 1992, Barcelona saw a cost overrun of 266%.

In more recent years, the 2016 Olympics in Rio de Janeiro cost just under $14 billion which represented a 352% cost overrun while the 2012 Games in London had a bill of just under $15 billion, 76% over budget. Snowballing costs aren’t just confined to the Summer Games and the Winter Olympics have also had their fair share of financial catastrophes. The $21.89 billion Sochi Winter Olympics in 2014 are a good example where numerous overbudget venues led to cost overrun of 289%.


In terms of sponsorship, the Olympic Games have also seen a massive fall in advertisements. According to an estimate, Japanese corporate sponsors poured in $3 billion in the games. They had to pay $200 million extra to extend the contracts after the event was postponed but now are staring at losses due to closed stadiums.

Toyota, Japan and the world’s biggest auto manufacturer which signed a $1bn commercial deal with Internation Olympic Committee (IOC) in 2015 will not air any commercials in Japan during the course of the Tokyo Olympics. This decision was taken after seeing the general resentment among the locals regarding the games. Many CEO’s and other top dignitaries also boycotted the opening ceremony just to avoid backlash from the people.

The local gold sponsors like Canon, Asics, Asahi, Fujitsu etc have invested $100m in the games but will not be able to reap the rewards which will see a massive decrease in their profits.

A Fujitsu spokesperson during an interview said, “the decision regarding spectators means we will discontinue the use of sponsor tickets; [and] that we will no longer be able to offer our hospitality program, which was an opportunity for us to build relationships with customers.”


There has been a general discontent among the Japanese with regards to holding the games. According to a survey conducted, 83% of people in the country said the Olympics should not have happened this year. In Tokyo, 46% are of the view that Olympics should have been cancelled. Around 30% said that it should have been postponed to next year while 24% said they don’t really care.

Organising the Games behind closed doors without any spectators will amount to losses around $800 million.


An event like this always sees an influx of tourists in the host country but banning of foreign spectators will surely be a huge hit to the Japanese economy. In 2019, Japan welcomed 31.9 million foreign visitors who according to an estimate spent $44 billion (4.81 trillion yen). In 2020, this number saw a decline of 87% to just 4.1 million.

According to a report from the Nomura Research Institute said if the games were cancelled, the total loss would be around $16.4 billion or 1.8 trillion yen of the GDP. The report further stated that if in case the Olympic games become a super spreader of COVID-19 than the economic repercussions will be far greater for Japan.

The author is a member of staff and heads the sports and business desks at The Correspondent. He mainly lives in the shadows as a ghost writer so you may have read his work and not even known it. He can be reached at


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