: No fans at the Tokyo Olympics will lead to at least $800 million in ticket-sale losses, analyst says

United States

This Summer’s Tokyo Olympics will officially be held without fans as Japan has declared a state of emergency due to increasing cases of COVID-19.

The ban was announced by the International Olympic Committee (IOC) and Japanese Prime Minister Yoshihide Suga.

“Taking into consideration the impact of the Delta strain, and in order to prevent the resurgence of infections from spreading across the country, we need to step up virus prevention measures,” Suga said.

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According to Liam Fox, an analyst at analytics company GlobalData, the absence of fans at the Tokyo Games could lead to as much as $ 800 million in revenue losses.

“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,” Fox wrote to MarketWatch. “It was expected that this would bring in $ 800 million revenue for the Tokyo 2020 OCOG (Organising Committees for the Olympic Games), making it the OCOG’s third most important source of revenue and it would also help fund 12% of the overall budget.”

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In addition to the OCOG missing out on the roughly $ 800 million of ticketing revenue, it also could lead to sponsors reassessing some of the in-arena deals with the Olympics.

“Not only has the decision to ban all spectators from attending the Olympics left a sizable hole in the budget of the Tokyo 2020 OCOG, it has presented significant obstacles for sponsors of the Games in terms of activating their partnerships,” Fox continued. “Domestic sponsorship investments in Tokyo 2020 had smashed all previous Summer Olympics records with $ 3.3 billion 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.”

Some of the sponsors for the Tokyo Olympic Games are Coca-Cola KO, +0.61%, Airbnb ABNB, +4.99%, Alibaba BABA, +3.05%, Toyota TM, +2.04%, Visa V, +0.79%, Intel INTC, +1.08% and General Electric GE, +2.25%.

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The Olympic Games this Summer will still be called “Tokyo 2020” even though the games will begin in 2021, the International Olympic Committee informed MarketWatch.

Earlier in 2021, one Japanese poll indicated that over 80% of people think the Tokyo Olympics should be canceled or postponed, or believe the Olympics won’t happen at all.