09 Jul 2021
Posted in Sport
Decision for no spectators at Tokyo 2020 Olympics will represent an $800m hole in OCOG’s budget
Following the recent announcement that Tokyo has banned all spectators from attending the Olympic Games, due to Japan declaring a state of emergency in the capital amidst a surge in COVID-19 cases;
Liam Fox, Sport Analyst at GlobalData, a leading data and analytics company, offers his view:
“Not only has the decision to ban all spectators from attending the Olympics left a sizable hole in the budget of the Tokyo 2020 Organising Commmittee of the Olympic Games (OCOG), it has presented significant obstacles for sponsors of the Games in terms of activating their partnerships. Domestic sponsorship investments in Tokyo 2020 had smashed all previous Summer Olympics records with $3.3bn being invested by Japanese brands in the Games; yet without fans in venues, activation opportunities have been severely reduced, which makes it difficult for sponsors to drive value from their deals and essentially make a return on their investments.
“Pre-pandemic, Tokyo 2020 organisers initially expected 7.8 million tickets would be made available for the Olympics. This figure was then revised following strong demand in the first phase of the sales process, with nine million tickets eventually being made available, which would have been a record for the most tickets sold at an Olympic Games. It was expcted that this would bring in $800m revenue for the Tokyo 2020 OCOG, making it the OCOG’s third most important source of revenue and it would also help fund 12% of the overall budget.
“However, these numbers had already been drastically reduced, where in March, the decision was made to ban international fans from attending Japan for the Olympics, while a limit of 10,000 domestic spectators were to be able to attend events. However, once more, the escalation of the pandemic in Japan has seen the rules revised and the decision made to ban all spectators, meaning the Tokyo 2020 Organising Committee will be unable to extract any of the $800m in ticketing revenues it was expected to make pre-COVID-19.”