Tokyo 2020 Olympics, the most expensive games?
Tokyo Olympics are already the most expensive summer games ever. And that's before the games even start. Now, the city of Tokyo, the International Olympic Committee, and the athletes themselves are bleeding cash. But problems ran deeper than the Covid-19 delay. So what makes the Tokyo Olympics so expensive?
When Tokyo won the bid for the Olympics in 2013, the cost estimate was $7.3 billion. Today experts estimated the run to be $26 billion. The problem starts with the venues-43 of them to be exact. The National Stadium is meant to be the site of the opening and closing ceremonies, as well as track and field events and soccer. It was a financial disaster before a single brick was laid. Japan hired star architect Zaha Hadid for the design. But cost estimates ran quickly well over the budget and when the price hit $2 billion, the plan was scrapped. Version 2 didn't fare much better. Japanese architect Kengo Kuma designed the 68,000 seat stadium with a mix of steel and wood from every single one of Japan's prefectures. The cost? - $1.4 billion. The design of the gymnastics center basically didn't change, but the cost, which was estimated to be $81 million, went more than doubled to $200 million by the time it was completed in 2019. So, in Japan, imports costs are much higher.
A lot of construction materials are all imported from other countries and that gave rise to the additional cost in the construction sector. With 8 new venues and 10 temporary ones, costs added up quickly. There's a plaza for badminton and pentathlon, costing $330 million, an aquatic center for swimming and diving, costing around $540 million, the volleyball arena for $320 million, and also the canoe and kayak center for $65 million. And that's just to name a few.
As per experts, there isn't even a single project in Olympic village that was on a budget. Everything went over the wall. While cost overrun the Olympics is something of a biennial tradition, a number of factors made Japan's expenditure worse. The construction cost is rising partly because of this rising cost as a result of a serious labor shortage in construction sectors. And that's part of why the construction of 21 buildings in the Olympic village has a price tag of nearly $2 billion. That cost is supposed to be offset by selling apartments to the general public after the games. The yearlong postponement increases operational costs by another $1.6 billion. Tokyo covered maintenance for all venues, ramped up security, and paid to rent the Olympic village for a year instead of a month. This also included canceling many of the warm-up events that would have brought in revenue.
The International Olympic Committee doesn't invest in infrastructure but maintains requirements on venue sizes. The Olympics draws millions of TV viewers around the world. Nearly three-quarters of the IOC's revenue comes from selling these rights to broadcasters. The opening and closing ceremonies attract the biggest audience, featuring hundreds of performers, laser light shows, fireworks, and lighting of the Olympic cauldron. These events in Tokyo have an expected cost of $118 million.
For all the burden of hosting the Games, Tokyo will see almost no share in the valuable broadcast rights. And the host city could be even more with the loss of ticket sales which were expected to reach more than $850 million due to covid-19.
It's a boondoggle that may change the Olympics forever.