Japan’s wish to host the Olympics could come at a hefty price

A July poll taken after the games were rescheduled found that one-third of the Japanese public wanted them canceled outright, and slightly more thought they should be postponed again.

A pedestrian walks past the Olympic rings outside the Japan Olympic Museum near the New National Stadium, in Tokyo in March 2020 | Photo: Kiyoshi Ota | Bloomberg

Just how high a price are the citizens of Japan willing to pay for the privilege of hosting the Olympics?

That question is getting a partial answer this month as a series of baseball games are being hosted — with government approval — in crowded stadiums. Various measures to protect spectators are being tested out, including smartphone apps that issue warnings about which parts of a stadium are crowded at any given moment. But if these measures fail, Japanese citizens will be left to manage the aftereffects of a possible super-spreader event — and to wonder why the government would ever undertake such a costly experiment.

Hosting the Olympics is never cheap, of course. For many host cities, the most tangible legacy of the games is debt. Russian taxpayers will be spending an estimated $1.2 billion per year “for the foreseeable future” to cover the costs of the 2014 Sochi Olympics, according to one study. But many governments are willing to accept such costs as a means of spurring economic development and raising the profile of local cities and companies.

In addition to such boosterism, Japan had hoped that the 2020 Olympics would re-establish its role as an Asian leader after spending two decades in China’s shadow. This was always going to be an expensive proposition: Tokyo’s successful 2013 bid budgeted $7.3 billion for the games. But even that estimate quickly spiraled. In 2018, government auditors predicted that the price tag would reach $25 billion (even as the International Olympic Committee claimed to be working to reduce costs).

Then Covid hit. Understandably, the IOC, the government and various sponsors were reluctant to postpone the games and incur further financial losses. But the pandemic forced their hands. In the spring, the games were moved to 2021, a delay that has so far added some $2.7 billion to what are already thought to be the most expensive summer games in history.

That taxpayers are expected to pick up most of the tab hasn’t exactly endeared the Olympics to the Japanese public. A July poll taken after the games were rescheduled found that one-third of respondents wanted them canceled outright, and slightly more thought they should be postponed again. When asked how the games could be downsized, 44% said they should be held without spectators.

Unfortunately, organizers don’t seem to agree. Even though crowded stadiums have played a key role in spreading Covid — and sports leagues around the world have limited or prohibited spectators as a result — the Olympics is still hoping to pack the stands. In part, it’s the optics: Empty seats have been a source of embarrassment in the past for the IOC. But it’s also a business problem. Tokyo is counting on hundreds of thousands of visitors to fill up its hotel rooms, restaurants and shops next year. By one estimate, the games could bring in $1.4 billion from tourists and $3.8 billion in added domestic spending.

With that in mind, local authorities staged closely monitored baseball games at an outdoor stadium in Yokohama last weekend. Over three days, spectator limits were lifted, from 80% capacity on the first day to full capacity on the third. It wasn’t entirely reckless: Fans were required to wear masks and prohibited from singing, cheering, or high-fiving, while high-tech sensors tracked airflow. Remarkably, though, the government isn’t waiting for any data before repeating the experiment. This weekend, a similar exercise will be conducted at the Tokyo Dome, an indoor venue where the virus could spread much more easily.

If these games turn out to be spreading events, the victims won’t just be spectators. They could be any Japanese person who had the misfortune of running into someone who decided to go out for a night of baseball in a crowded stadium during a pandemic. That prospect should be enough for the government to shut down these experiments and accept a spectator-less Olympics. If it doesn’t, then the IOC should insist. For decades, the committee has argued that the games are in the best interests of host cities. Here’s a chance to prove it. – Bloomberg