Tokyo 2020 is still relying on sponsor renewals for 2021 ©Getty Images

The organisers of the Tokyo 2020 Olympics and Paralympics have reportedly not extended sponsors' contracts which are set to expire at the end of the year.

Due to the spread of coronavirus, the International Olympic Committee decided in March to postpone the Games for the first time in its history to 2021 to allow restrictions to ease.

These restrictions and health concerns led to many qualification events for the Games being postponed.

According to Reuters, organisers are expected to be paid additional costs for extending contracts from sponsors.

Sources suggest that many of these sponsors are not considering renewing their partnerships, but there are also worries about a potential backlash from abandoning the Games.

"The delay threw financial plans for the Games into disarray and many companies really don't want to pay any more," an Olympic insider said to Reuters.

Two unnamed sponsors said they expected the extension negotiations to be "very difficult".

Tokyo 2020 has raised a total of $3.1 billion (£2.4 billion/€2.64 billion) in sponsorship money from across Japan, but many companies have faced hardship since the pandemic hit the nation.

Organisers stated that they are "asking our partners for their ongoing support in the process of extending the contracts".

Just 24 per cent of Japanese citizens are in favour of holding the Olympics next year, according to a poll in July by Kyodo News.

In May, worldwide Olympic sponsor and Japanese car manufacturer Toyota forecast a collapse in its profits, which have further worsened due to restrictions to production.

TOP sponsors like Toyota have struggled financially since the COVID-19 pandemic ©Getty Images
TOP sponsors like Toyota have struggled financially since the COVID-19 pandemic ©Getty Images

"While some sponsors see benefits even with reduced attendance at the Games, for others its hard to see the point," said one of the sponsor sources.

"If other sponsors extend and only we don't cooperate, that'll make waves – that's what we want to avoid."

In a June survey conducted by Japanese broadcaster NHK, two-thirds of corporate sponsors for Tokyo 2020 revealed they are unsure if they will extend their contracts past December, with 14 per cent saying it would depend on the asking price.

Tokyo 2020 faced another hurdle after Japanese Prime Minister Shinzō Abe resigned from his position last month due to health concerns.

His successor will now be tasked with ensuring the postponed Games run as planned next year and successfully.

Chief cabinet secretary Yoshihide Suga is considered the favourite for the job and has backed hosting the event, much like Abe.