University of Oxford paper pegs current spending on rescheduled event at US$15.84bn.
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- Tokyo 2020 cost overrun has already exceeded 200%
- Japan forecast budget of US$7.3bn in 2013; since updated to US$12.6bn
The rescheduled Tokyo 2020 Olympic Games are already the most expensive Summer Olympics in history, according to a new study by the University of Oxford.
The Tokyo Games, which were due to take between July and August this year, were postponed until 2021 in March as a result of the coronavirus pandemic.
The budget for Tokyo 2020 has been pegged at US$12.6 billion, although it has been reported that the actual cost of the event is at least twice that much. Japan originally forecast that it would spend US$7.3 billion on the Games when bidding to host them in 2013.
Japanese business paper Nikkei has estimated that the increased staging costs as a result of the postponement could be as much as US$2.7 billion, while the International Olympic Committee (IOC) has said that it expects the delay to cost the organisation US$800 million.
Bent Flyvbjerg, the lead author of the University of Oxford study, which is titled ‘Regression to the Tail: Why the Olympics Blow Up’, told the Associated Press (AP) that the cost overrun for Tokyo 2020 has already exceeded 200 per cent.
The study estimates that Tokyo’s spending currently stands at US$15.84 billion. That figure is already more than the amount spent on London 2012, which at US$15 billion is the most costly Summer Olympics to take place on record.
However, the paper did point out that every Olympics since 1960 has exceeded its budget at an average of 172 per cent.
“The Olympics offer the highest level of risk a city can take on,” Flyvbjerg said in an interview with the AP. “The trend cannot continue. No city will want to do this because it’s just too expensive, putting themselves into a debt that most cities cannot afford.”
The Sochi 2014 Winter Olympics were the most expensive edition of the Games ever, according to the study, which estimates that US$21.9 billion was spent on the event. However, it has still been more expensive for cities to stage the Summer Olympics, with the average cost between 1960 and 2016 amounting to US$6 billion. The average spend for hosting the Winter Games over the same period was estimated at US$3.1 billion.
The study accounts for sports-related costs, which it estimates to be US$12 billion, and non-sports-related costs that amount to ‘several times that’. Flyvbjerg added to the AP that the paper did not include the cost of other projects sometimes carried out by host cities, such as road renovations and building airports.
“Our estimates are conservative because there are lots of costs that are hidden that we can’t get into,” he said. “And there are lots of costs we decided not to include because it’s too complex. We include the things we can get the most reliable numbers for and we do it in the same way for each city that we study.”
The IOC declined to comment on the study after being approached by the AP.
The study comes after sports marketing advisory firm The Sports Consultancy launched a research and intelligence unit called Seer, which in its first report uncovered a growing disconnect between major event rights holders and host cities, especially when it comes to cost.
That report, which surveyed over 70 major event rights holders and hosts, found that 77 per cent of cities cite high hosting fees as one of the biggest obstacles to staging events. However, 50 per cent of rights holders pinpointed a city’s ability to pay a hosting fee as one of the top three traits for an ‘ideal’ host, with 76 per cent saying they expect the cost of staging their events to rise in the future.
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September 07, 2020 at 05:45PM
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Study: Tokyo 2020 already most expensive Summer Olympics on record - SportsPro Media
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