David Owen

"Follow the money," a wise man once said.

The money-flows in the Olympic Movement are by no means entirely straightforward.

With uncertainty rising over whether the Tokyo 2020 Olympic and Paralympic Games are going to be able to take place as scheduled, now seems a good time to try to map some of them.

If the wise man is right, the exercise may offer some insight into how financial concerns might colour the positions taken by affected parties in the difficult discussions that will no doubt take place over coming days and weeks.

First up, the International Olympic Committee (IOC), masters of this particular universe.

The Big Bucks for the IOC reside in their broadcasting rights contracts with international television and media companies.

The Olympic Marketing Fact File indicates that 73 per cent of IOC revenue in 2013-2016, the last completed Olympic quadrennium, was derived from broadcast rights.

For Tokyo 2020, I would think we are talking about somewhere in the region of $3 billion (£2.5 billion/€2.7 billion); broadcast revenue related to the last Summer Games in Rio totalled $2.87 billion (£2.38 billion/€2.6 billion).

The IOC said yesterday in the middle of a long communiqué on Tokyo 2020 that its decision would not be "determined by financial interests".

Nonetheless, after serious issues related to public health, you would think, logically, that protecting this income would be a top priority for the Lausanne-based body.

For this reason, if some semblance of normality cannot be restored by July 24 but postponement is ruled out as just too difficult (about which more later), I would think that President Bach and his IOC inner circle would at least examine the feasibility of going ahead as scheduled, but behind closed doors.

Organisers could be forced into a
Organisers could be forced into a "Plan B" for Tokyo 2020 ©Getty Images

This could only work if most athletes and some TV operatives were able to get in and out of Japan satisfactorily, and were not themselves sick and/or contagious – a very big "if".

Even then one would feel for the competitors having to perform in cavernous, largely empty venues instead of before rapturous crowds as they would have anticipated.

But the broadcasters would be able to do their thing and, if a few thousand volunteers could be certified as definitively coronavirus-free, they could be used as "extras", enabling producers to conjure an illusion of authentic crowd action while providing a modicum of atmosphere for the athletes.

Yes, the IOC takes out insurance: it spent $14.38 million (£11 million/€13 million) on the stuff for Rio 2016.

You would expect this also to enter their calculations.

If they can simply retrieve all $3 billion of their anticipated broadcast income by making a claim, that might yet turn out to be the least painful option in the event that the Games cannot proceed as planned.

In my experience, however, that tends to be not quite how insurance works.

The people who one might expect to be most reluctant to acquiesce to any "behind closed doors" initiative would be Tokyo 2020 themselves.

Loss of their anticipated $840 million (£700 million/€765 million) or so of ticketing income would leave a sizeable hole in the Organising Committee's operating budget, notwithstanding the torrents of local sponsorship money that have gushed in almost from day one.  

The country's authorities might take the long view, reasoning that the boost to national reputation and prestige afforded by the Games, even in current circumstances, would far outweigh this hit.

Then again, some may argue that there is little point spending heavily to put your nation in the world's shop-window at a time when people are deterred from travelling.

This leads me to wonder whether the powers-that-be in Japan might be tempted to consider whether a mass audience restricted to Japanese, or perhaps even Tokyo, residents might constitute an acceptably low risk for an event not scheduled to begin until late July.

We cannot know whether such an approach would be remotely feasible until we see the continued course of the virus in Japan – and the community of prospective Olympic athletes – over coming weeks.

Could sport at Tokyo 2020 take place behind closed doors? ©Getty Images
Could sport at Tokyo 2020 take place behind closed doors? ©Getty Images

But it could potentially mitigate the budget-hole threatened by a more or less behind-closed-doors event, and domestic ticket demand for these Games has always appeared exceptionally strong.

The IOC, as it never tires of telling us, does not keep the bulk of the income it generates, passing most of it on around the myriad subsidiaries of the global sports movement.

It follows that all of these bodies, ranging from the international sports federations (IFs) to the United States Olympic & Paralympic Committee and other National Olympic Committees (NOCs), as well as the organisers of future Olympic and Winter Olympic Games, share an interest in ensuring that as much as possible of the expected $3 billion broadcast bonanza is delivered.

For some of these bodies, the post-Games dividend handed down by the IOC forms a major chunk of their quadrennial income.

I once calculated, for example, that the IOC subsidy equated to more than 80 per cent of the International Shooting Sport Federation (ISSF)'s income in 2017.

Admittedly, the organisation's President is now one of the world's wealthiest men, Vladimir Lisin from Russia.

He might find that his generosity is further tested if the current crisis forces IF distributions post-Tokyo 2020 to be reduced significantly from prior expectations.

The bigger point is that the ISSF is far from alone in being heavily dependent on its post-Olympic payments, while few IFs or NOCs are fortunate enough to have such a rich benefactor.

All told, the IOC distributed $540 million (£450 million/€490 million) to NOCs and the same again to IFs post-Rio 2016.

Olympic broadcasters may well feel torn as to the least bad option should proceeding with the Games precisely as planned this summer not prove possible, as seems increasingly likely.

The international sports schedule, and sports broadcasting schedule, is so crowded nowadays that it seems all but obligatory that the Summer Olympics be shoehorned into their regular July/August slot in a way that simply was not the case 20 years ago.

But even utilising the same dates one or two years later would be far from ideal- and that is on the assumption that the massive sports and accommodation infrastructure required by a modern Olympics would mostly still be available in Tokyo throughout any revised 2021, let alone 2022, schedule.

Olympic broadcasters would be affected by any change to the Tokyo 2020 programme ©Getty Images
Olympic broadcasters would be affected by any change to the Tokyo 2020 programme ©Getty Images

And another thing: would potentially recession-hit consumer goods companies still be lining up in the same sort of numbers to advertise?

So, again, sticking to the original timetable, even if there were little or no live audience, might have some appeal as a "Plan B".

This would only apply if the majority of star athletes were able to compete, however.

Without these big names – Simone Biles, Nafissatou Thiam, Adam Peaty, et cetera, et cetera – viewing figures would probably tumble, rendering broadcasters' hefty investment in the rights less lucrative than they would have been bargaining for.

The IOC's worldwide sponsors sign up, with few exceptions, for at least four years.

The present crop have therefore already had some value from their respective Olympic investments.

A few, indeed, are long-term partners whose association with the IOC stretches back decades.

I would be surprised though if some of them did not seek some sort of redress were Tokyo 2020 to be cancelled lock, stock and barrel.

A further wrinkle is that a substantial part of their contribution takes the form of useful goods and services that would not be needed if the event does not take place. 

A postponement, meanwhile, could make things really complicated: Can an Olympiad last five years? Would every 2021-24 international sponsor consent to their term, in effect, being cut by a year?

So, could these large companies live with a Tokyo 2020 that went ahead on time but, to a greater or lesser extent, behind closed doors?

Given the alternatives, I suspect that they too might conclude that, if needs must, they could.

Questions would be raised for Olympic sponsors in the result of a postponement ©Getty Images
Questions would be raised for Olympic sponsors in the result of a postponement ©Getty Images

By definition, national sponsors of the Games, who are pumping an unprecedented $3.3 billion (£2.75 billion/€3 billion) into Tokyo 2020's coffers, are interested in the Japanese market.

I cannot see them kicking up much of a fuss over either a Games confined to a Japan-based live audience, or a postponement.

Out-and-out cancellation would, by contrast, almost inevitably leave them severely disappointed.

Reading back through this piece, it still seems almost surreal that one feels obliged to give such matters serious consideration.

But this is the world we are now living in.