Each Sunday, we send newsletter subscribers one piece of longform journalism we call The Sunday Long Read. In this edition, contributor Justin Horneker looks at what's at stake for both the IOC and Japan.
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As we march closer to the opening ceremony in Tokyo, the continuation of the 2020 Olympic Games linger large in the collective conscience of world athletics. We have spent months hoping that the games would proceed, while the International Olympic Committee reassured us that there was "no plan B". That is, until last week when Richard Lloyd Parry published this report in The Times,
According to a senior member of the ruling coalition, there is agreement that the Games, already postponed a year, are doomed. The aim now is to find a face-saving way of announcing the cancellation that leaves open the possibility of Tokyo playing host at a later date. “No one wants to be the first to say so but the consensus is that it’s too difficult,” the source said. “Personally, I don’t think it’s going to happen.”
Unsurprisingly, the IOC, the Tokyo organizing committee and the Japanese Government have vehemently denied Parry's report. It's almost tempting to believe the organizers, as they all have so much to lose. But these same governing bodies were adamant on holding the games in 2020, too... until they weren't.
2021 Or Bust
The winds appear to be heading in that same direction this year as well. Recent polls in Japan suggest that 80% of the population would prefer for the Games to be cancelled or once again postponed. Those polls come on the heels of COVID-related lockdowns and rising infection rates across the country.
Nevertheless, the IOC is trudging along. Another Olympic postponement would be absolutely devastating to our current athletic calendar, and of course there is an appalling amount of money at stake.
Japan is faced with what economists call the sunk cost fallacy. The billions that have already been spent become too haunting to let go, and the prospect of making them back leads the investor to make irrational decisions, often taking on even more debt before finally walking away.
The IOC, on the other hand, is in a slightly different predicament, and one that is only partially aligned with the local organizers. The bulk of the money in jeopardy for the IOC isn't cash already spent, but profits they are set to earn. The payouts from broadcast and partner rights dangle before the IOC, which were long ago sold and the cheques presumably already cashed. If the IOC can somehow satisfy those contracts this year, it will skate through this catastrophe relatively unscathed.
And so, for slightly different reasons, both the IOC and Japan are holding the line as long as possible, although the local government appears to be realizing the danger of being caught up in a sunk cost dilemma. It is, in part, why we are now hearing murmuring about a spectator-less Games as an option. That would deeply impair Tokyo's attempt at recouping some of its losses, but would satisfy the IOC's needs of having a two-week TV show to sell. This may be why there appears to be a fissure growing between the Japanese government officials who will be left to clean up this gigantic financial mess (and feel the political fallout from it in the months and years to come) and the IOC. I even had one insider tell me, "The official line is that it's all going ahead, so although people know it's not going to happen, no one has an interest in saying so publicly."
49.4 Billion Reasons Not to Give Up Hope
One thing is for sure, the first one to blink will be on the hook for a large bill. In the IOC's case, it would no doubt mean giving back much of the billions of dollars it has received in these deals. But for Japan, it will mean absorbing an unbearable blow.
According to an article translated by Japan Running News, "Kansai University professor emeritus Katsuhiro Miyamoto, 76, has estimated that the cancelation of the Games would result in an economic loss of over 4.5 trillion yen [$43.5 billion USD]. The one-year postponement from last year has already resulted in a 640.8 billion yen loss [$6.1 billion]." These numbers break down between Tokyo, which is paying $570 billion, the Japanese organizing committee, which is contributing $575 billion and the central government, which is paying $143 billion. Tokyo will experience a net-negative economic impact of just under $50 billion because of these Games, after factoring in all the sunk costs like stadium maintenance and already-built infrastructure aimed at supporting a big, tourist- and athlete-filled two week extravaganza.
Sure, some of these venues could be repurposed, but one only has to look back to the venues of 2016 in Rio and beyond to see how often these Olympic venues don't find a new use. While it is hard to factor how much that has impacted Japan's GDP already, it would make the controversial sales tax implemented to fund these venues seem increasingly frivolous.
Miyamoto predicts that cancelling the Games would erode Japan's GDP by about 1%, which would be a devastating prospect for even a fiscally sound country during normal times. During the Pandemic, this loss would gut Japan. The country is deeply in debt, with its economy struggling to grow, and has by far the oldest population of any country in the world. One third of Japan is 65 or older, and the newly formed national government must figure out how to pay for its very costly social security program. Japan's workforce is shrinking dramatically, and the previous government had anticipated the Olympics would have generated years of revenue from the legacy of having hosted a big, boisterous Games, not crippling debt from a one year delay, followed by the albatross of so many useless stadia.
Just as Japan doesn't want to be on the hook for the potential economic impact, the Japanese people don't want an influx of athletes, officials and fans flying into the country from around the world. It's an unenviable position, especially when IOC officials are ramping up pressure by telling broadcasters, "there is no plan B."
Of course there are plan B's available — the concept of "bubble cities" has been bandied about as an alternative. The bubble city plan would require a 14-day quarantine and two negative COVID tests before entering. The bubble city concept isn't new. The idea of separate host cities has been presented in the past as a way to relieve the economic and logistical strain that often plagues a host city.
We have seen the success of sports-related bubbles in this past year; NWSL, NBA, NHL, and MLS have all successfully pulled off competitions where athletes were kept in a secure location and movement in and out of the bubble was strictly controlled. As we've seen, the IOC has yet to entertain any alternative venues, but that hasn't stopped locations from showing their interest in hosting a portion of the Olympic bubble.
All plans have their pros and cons — the TV and streaming logistics would be an obvious issue in any split-venue Olympics, while simply pushing the Games to 2022 would crowd the world sporting calendar and require resources that the IOC doesn't appear willing to allocate. It is becoming increasingly clear that the Olympic Games will not be business as usual.
The Qualification Conundrum
Athlete qualification is another aspect that the IOC must accept will deeply impact the quality and legitimacy of these Games, if they are to happen. For example, The "Night of 10,000m" in the U.K. was recently cancelled. This event had been set up as the British Olympic Trials for that distance. We also have the U.S. Track and Field Olympic Trials which are currently slated to christen the new $200 million Hayward Field from June 18-27. Current COVID restrictions within the state of Oregon has the status of the meet up in the air. The assumption is, as vaccine rates increase and infection rates decrease, COVID restrictions will slowly open the venue up for more athletes and spectators. But as of now USATF and the state of Oregon find themselves in a similar position to the IOC and the city of Tokyo. Neither party is willing to admit the obvious — neither wants to cancel, but five months suddenly doesn't sound so far away.
The repercussions of this disruption are widespread. Nike isn't sponsoring USATF out of charity. What happens when those contract clauses that center around Olympic qualification, and a large delegation all wearing the Swoosh for a global audience can't be met?
With the COVID-19 death toll rising, a drawn-out fight between Olympic organizing bodies and Olympics qualifications host sites will not be well received when we have much larger problems to worry about. But with so many athletes' livelihoods directly impacted by an upcoming decision, the smokescreen does not inspire confidence.
And also what happens if a federation — like the Canadian Olympic Committee did last spring — decides pre-emptively to pull the plug on Tokyo once again? Will the IOC soldier on, and will Japan host an event similar in scope to the 1980 and '84 Olympics, which came at the height of the Cold War and saw many Western countries boycott Moscow, and then Soviet nations skipping L.A. ? Both those Olympics subsequently tainted the legacy of the Games and the value of a gold medal for those editions.
It's Supposed to Be About Athletes
All of this to say that the pressure and anxiety placed upon athletes and coaches right now is immense. NAZ Elite Head Coach Ben Rosario, who guides Olympic-calibre athletes like Canadian Rory Linkletter, aired out his feelings on Twitter this week:
"I've talked to multiple coaches this week and we've all said this last month has been the hardest of our careers — trying to manage COVID protocols, uncertainty, etc."
This is compounded by the fact that athletes and coaches have received very little communication from the governing bodies on what to expect or how to prepare. You get the feeling that athletes will reach a breaking point in the not too distant future, with no alternatives we may see more athletes turn down the opportunity citing the stress of travel during the pandemic or the stress from dealing with the pandemic raging around them. Both Olympic veterans and Olympic hopefuls have told me that they have received no communication from USATF, Athletics Canada, or any Olympic committee representatives regarding potential cancellations or rescheduling of the games as planned.
There is, indeed, no plan B.