Economic failure of the Olympics, Japan’s “great power dream” shattered

It seems that the Tokyo Olympics uncovered only the “scars” of Japan.

There is no Olympic Games with such a long fate as Tokyo this year, one bad news after bad news.

On July 11, Toshiro Muto, chief executive of the Tokyo Olympic Organizing Committee, said that due to the empty venues for Olympic events in five regions including Tokyo, ticket revenue has fallen from the estimated 90 billion yen (approximately RMB 5.3 billion). Billions of yen;

On July 21, the data provided by the Tokyo Olympic Organizing Committee showed that the total number of new crown cases related to the Olympics has reached 75;

It was hard to get to the opening ceremony. Toyota, the top sponsor of the Olympic Games, announced that it would give up placing Olympic-related TV commercials in Japan. The director of the opening and closing ceremonies Kentaro Kobayashi was dismissed. Tokyo Olympic Organizing Committee Chairman Hashimoto Seiko announced this. Decide and apologize to the outside world.

Beginning in 1896 when Coubertin suggested that the Olympics be held in various cities in turn, the Olympics have become the international stage for countries to take this opportunity to show off and show off to other countries. But now, the Tokyo Olympics seem to have only revealed the “scars” of Japan.

This Olympics won’t make money?

If there is no epidemic, the Tokyo Olympics may really become a huge and unprecedented sports event. When bidding for the Olympics in 2013, Japanese officials had estimated that the cost of hosting the Olympics was 7.3 billion US dollars, but as of September 2020, according to Oxford University research and calculations, Japan’s actual investment reached nearly 15.84 billion US dollars, a cost overrun of 100%, setting the history of the Summer Olympics. Record.

In contrast, the originally expected return is also quite generous. It is reported that before the announcement of the postponement of the Olympic Games, the contract value signed by the Tokyo Olympic Organizing Committee and sponsors has exceeded 3.3 billion U.S. dollars, which is three times that of the 2008 Beijing Olympics and more than the sum of the sponsorship amounts of the last two World Cups. In addition, NBC Universal paid approximately US$1 billion for the U.S. broadcasting rights of the Tokyo Olympics, and signed a contract of US$7.5 billion to extend the broadcasting rights to 2032, which shows the expectations of the major “golden owners” for the Olympic Games at that time.

But now the Tokyo Olympics may become the most money-losing business in Japanese history.

First, the loss of Japanese tourism caused by the decline in ticket revenues and the loss of overseas audiences after the empty venues were held. According to Toshiro Muto, the ticket revenue of the Tokyo Olympics directly decreased by 89 billion yen, and many economists pointed out that the Olympics did not accept overseas visitors. The tourist and consumption losses caused by the audience are expected to reach 150 billion yen, and the two add up to almost 2.17 billion US dollars.

Economic failure of the Olympics, Japan's "great power dream" shattered

Furthermore, the high sponsorship fees of local Japanese companies will not be rewarded. On the one hand, the sponsors abandoned the Olympic-related TV commercials in Japan, and on the other hand they cancelled all marketing activities during the competition. This not only means that the original preparations will be burned, but more importantly, the Olympic marketing is used to stimulate product sales. The plan was also lost.

In addition to these direct economic losses, the hidden economic effects of the Olympics will be greatly reduced. Japan once hoped that tourists who went to Japan to watch the Olympics would continue to revisit in the next few decades, but Japanese economists pointed out that this situation now prevents Japan from benefiting from this effect, and the loss of income may be as high as 10 billion. Dollar.

The Olympics has also affected the housing prices in Tokyo. The price of newly-built residential properties in Tokyo will rise by 1.7% in 2020, and the transaction price per unit will reach 550,000 US dollars. Now the transaction volume has dropped significantly.

As Toshiro Muto said at the press conference, the revenue and expenditure situation of the Tokyo Olympic Organizing Committee “will undoubtedly be out of balance.”

In fact, not only are overseas tourists, but most of the people in the country oppose the hosting of the Olympic Games at this time, and they will have their own way, which has damped domestic consumer enthusiasm. The “Asahi Shimbun” poll pointed out that 83% of voters believe that the Tokyo Olympics should be postponed or cancelled, and the proportion of voters who hope to host the Olympics this summer will drop by half.

The Japanese people are generally pessimistic about the Tokyo Olympics. A resident living near the National Arena said, “Because of the control, there are no players or the media nearby, and the atmosphere of the host country is not felt at all, and the audience is not visible. There is no atmosphere of the game at all. Everyone can’t get excited at all.”

“Renaissance Olympics” is difficult to revive

Japan has held the Olympic Games twice. In 1964, as the first Asian country to host the Olympic Games, Japan’s fast-developing high-tech and infrastructure were presented through this sporting event, and this long-lost highlight moment after the war was also completely Let “the Japanese regain their confidence” and announce the arrival of a new era.

The Olympics carries the same important task. The Japanese government looks forward to using the east wind of the Olympics to boost Japan’s stagnant economy and once again show the people of the world the post-disaster Japan’s recovery. However, it is obvious that Japan has not recovered to the economic level before the epidemic in a year. The World Bank’s Global Economic Outlook report released in June showed that the global economic growth forecast this year was raised to 5.6%, but Japan’s economic growth rate is expected. Only 2.9%.

It is hopeless to expect the Olympics to drive Japan’s economic recovery. The problem is that Japan has to bear the financial pressure caused by high investment and huge losses. Will this make the Japanese economy worse?

Economic failure of the Olympics, Japan's "great power dream" shattered

The answer is yes. With reference to the Athens Olympics and Rio Olympics, Athens had a huge deficit of US$8 billion to US$10 billion to host the 28th Olympic Games. Rio was even more outrageous. The Olympic deficit that year reached US$13 billion. What the Athens Olympics and the Rio Olympics have in common is that both countries entered a period of economic recession when they hosted the Olympics. After the bursting of the real estate and stock market bubbles in Japan, they have not been able to get out of the downturn of “disappearing for 20 years.

And when economies around the world gradually recovered to their pre-epidemic levels, Japan seemed to stagnate. According to relevant data, Japan’s actual gross domestic product (GDP) fell by 1.0% from the previous quarter in the first quarter of this year, and the negative quarterly GDP growth occurred again after a lapse of two quarters after the second quarter of last year.

Of course, the possible losses caused by the cancellation of the Olympic Games are far greater than the losses caused by holding the games empty, and as one of the world’s three largest economies, the deficit in the revenue and expenditure of the Tokyo Olympic Organizing Committee is not enough to shake Japan’s finances. However, from a micro perspective, relevant companies may have to suffer greater losses, or even “destruction.”

For example, small and medium catering shops, gift shops, hotels, etc., many old shops have been officially closed due to long-term poor performance, and commercial facilities such as hotels that were previously built specifically to host the Olympics are also facing bankruptcy. And because of the postponement last year and the hard work for a year, the stores that originally expected to rely on tourists to make money or improve their performance this year may close in large numbers. An owner of a dim sum shop in Tokyo said that the government is following the Olympics but there are no tourists. The next thing to consider is whether to close the business.

Due to the epidemic, department stores, shopping malls, bars, offline education and training and many other industries are also in the same situation. They have shown a sharp decline in a year and a half, and their operations are becoming more and more difficult. As a person in charge of running a cram school said, “Everyone’s lives have reached a critical point.”

The Olympic economy is no longer a good business?

The doubts surrounding the Tokyo Olympics are largely due to the uncertain risk of the Olympics brought by the epidemic, but it is precisely the competition for interests between the International Olympic Committee, the organizers, the Japanese consortium, and the public under the background of the epidemic that has exposed the Olympics more and more. There are deeper problems with the model.

For example, the International Olympic Committee has the power to cancel the Olympics, but they did not do so. Once cancelled, the IOC will have to refund billions of dollars in broadcasting royalties, which account for 73% of the total revenue of the IOC. Generally speaking, the International Olympic Committee counts on this money to cover the various expenses of the Olympic committees around the world. They want to host the Tokyo Olympics more than the Japanese government.

The risks are carried by the organizers, and the International Olympic Committee is reaping the profits. Behind this is the lack of the IOC’s accountability system.

With the holding of the recent two or three Olympic Games, the outside world has already raised many questions about the operation of the Olympic Games. Most countries regard the Olympics as a boost to national self-confidence and an opportunity to promote the country’s economic and cultural strength. However, the large-scale investment required in the early stages of hosting the Olympics has gradually become a financial burden for the country. In the event of an epidemic, such force majeure , The organizer will be caught in a dilemma.

Regardless of the epidemic, the huge shortfalls of the Athens and Rio Olympics have once again proved that countries without strong economic strength must bear the economic risks they bring if they want to host the Olympics. Some people in the industry have suggested that the Olympic Games can be hosted by several major countries in turn, or directly fixed in one country, but this model is essentially in conflict with the spirit of participation in the Olympics.

In the final analysis, the burden of the Olympics is inseparable from the long preparatory period. To determine the venue from the Olympic Games opening time, usually up to 7 years, although this time span so that the organizers have charged enough time to be ready, the cost can be invested only go higher than expected is common thing. Moreover, once the country’s economic situation changes during this period, the role played by the Olympics may be counterproductive, changing from a display to a shame.

Like Tokyo, when Tokyo won the right to host the Olympics in 2013, Japan was very optimistic. The Tokyo Metropolitan Government estimates that the nearly 7-year Olympic preparation process will bring Japan at least 150,000 jobs and 2.96 trillion yen (about 187.6 billion yuan) worth of economic benefits.

We don’t know whether the preparations for the Olympic Games in the past 7 years have created such great economic benefits. But now, cardboard beds, athlete medals made from waste electronic equipment, and the much-spoken facilities and environment of the Olympic Village seem to be in place. Reveal the worrying financial situation of the Tokyo Olympic Organizing Committee. An exuberant sports event that drove the economy was abruptly organized into a “Tucao Conference.”

The operation mode of the Olympic Games should not be static, especially the global epidemic. This key factor related to the process and safety of the Olympic Games should be taken into account in the event, and an effective response mechanism should be established. This may be the International Olympic Committee. Questions that should be considered.

The Tokyo Olympics is destined to be a special Olympics. If it can end safely and smoothly, it will be the best result, but Japan’s dream of a great power is destined to miss this Olympics.

Wrong way, the Internet and new media in the technology circle. WeChat public account of the same name: Daotmt. This article is an original article, any reprinting without retaining the author’s relevant information is declined.

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