How The Tokyo Olympics Became The Most Expensive Summer Games Ever | So Expensive

tokyo's 2020 olympics are already the most expensive summer games ever and that's before the games have even taken place the japanese public is largely against them in the midst of a pandemic and there's no guarantee they will happen at all now the city of tokyo the international olympic committee and athletes themselves are bleeding cash it all adds up so money is stretched a little thin right now but the problems run deeper than the delay so what makes the tokyo olympics so expensive tokyo when tokyo won the bid for the olympics in 2013 the cost estimate was 7.3 billion today expert estimates run to 26 billion dollars 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 quickly ran well over budget and when the price hit 2 billion dollars the plan was scrapped version 2 didn't fare much better japanese architect kingo kuma designed the 68 000 seat stadium with a mix of steel and wood from every single one of japan's 47 prefectures the cost 1.4 billion dollars the design of the gymnastics center basically didn't change but the cost more than doubled by the time it was completed in 2019 so ens depreciation means impulse costs are much higher so lots of construction materials are all imported from other countries so that also gave rise to the additional costs in the construction sectors with eight new venues and ten temporary ones costs added up quickly there's a plaza for badminton and pentathlon an aquatic center for swimming and diving the volleyball arena and of course the canoe and kayak center and that's just to name a few this is another interesting thing about the olympics is the only project type we have found where we can't even find one project that was done on budget each and every one of them for which data exists have run over budget while cost overruns at the olympics are something of a biennial tradition a number of factors made japan's expenditures 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 olympic games today they are sitting empty the year-long postponement increased operational costs by another 1.6 billion dollars tokyo covered maintenance for all venues ramped up security and paid to rent the olympic village for a year instead of a month lots of stadiums and some sports players housing those are just left empty without being utilized so there's an opportunity cost there this included cancelling many of the warm-up events that would have brought in revenue the controversy over holding the games grew amidst rumors that japan decided to cancel the games though the rumors were quickly denied by the government and the ioc to be honest the public feel probably it's better the game will be cancelled or at least postpone however the companies have a different view the corporate sectors they definitely want to hold a game this year the international olympic committee doesn't invest in infrastructure but maintains requirements on venue sizes the ioc has an interest in getting the best show you know with the most viewers and they're actually not too concerned about cost 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 like nbc the opening and closing ceremonies attract the biggest audience featuring hundreds of performers laser light shows fireworks and the lighting of the olympic cauldron those events in tokyo have an expected cost of 118 million dollars for all the burden of hosting the games tokyo will see almost no share in the valuable broadcast rates and the host city could be out even more with the loss of ticket sales which are expected to reach more than 850 million dollars if the games do go forward 900 million dollars in added covert precautions will bring the total cost of the delay to 2.8 billion dollars the tokyo olympic organizer have to prepare about 300 doctors every day additionally 400 nurses that is quite difficult while all these numbers seem like a burden for a host city to endure there's also the cost to the individual athlete alan bauer is a gymnast on the us national team trying to make his first olympics we set up a gym in my garage worked out there you know we just tried to do everything that we could but my world kind of got flipped upside down when we when i when covet hit a good pommel horse can cost five thousand dollars the protective mats around it fifteen hundred dollars each ceiling mounted rings six hundred dollars the garage part of his eleven hundred dollars a month in rent luckily he was spared a lot of those costs we had a couple of gyms send us some of the equipment we had a bunch of support from all around the state of oklahoma and texas it's hard to imagine that all of this might be for nothing there's still a real chance the olympics could get canceled outright some event organizers already learned their lesson the wimbledon tennis tournament took out insurance against virus-related pandemics in 2002 when sars threatened to become a global pandemic wimbledon actually netted about 140 million dollars this year when it had to cancel because of covent in japan insurance losses of a complete cancellation are estimated at two to three billion dollars not even half of tokyo's original bid to host the games the tokyo organizing committee now says its budget is 15.4 billion dollars twice the original estimate but experts and even japan's auditor disagree it's a boondoggle that may change the olympics forever whether the party in tokyo happens remains to be seen but the bill is coming due [Music] you

Channel: Business Insider

Views: 754,675

Rating: 4.9394794 out of 5

Keywords: Business Insider, Business News, Tokyo 2020, Tokyo Olympics, Tokyo, Olympics, Money, So Expensive, News, COVID

Id: 7PM4sYl3dsI

Length: 7min 7sec (427 seconds)

Published: Mon Mar 01 2021

Reddit Comments

[u/Setagaya-Observer]

Do you know that this is less than 10% of what we need for Fukushima-Daiichi?

Thanks to the mighty Japanese Wa we can print endless Money /s

https://youtu.be/p5Ac7ap_MAY

(Princes of the Yen, very good Documentary)

[u/SeeksNewWay]

$26B for an unnecessary one-time event, in a world full of starving people.

[u/JpnDude]

It's crazy to hear that the host country won't share in the rights fees paid by the international broadcasters (cough, cough NBC). Damn.

[u/dougfoo888]

You sure that's dollars not yen?

[u/TurnaKey]

The original stadium was damn ugly, glad they switched out of it. It looked like a bicycle seat designed for aliens. It was certainly different, but not in a good way.

Anyway, Japan hasn't even seen a lot of success in its vaccine drive and won't get any money from broadcasting, tourism, or entertainment activities such as bars, restaurants etc... Sure it's a waste of money, but this is just a really good example of the sunk-cost fallacy.

[u/Kotoshi_Owari]

Shhhh.