The organising committee for the Tokyo 2020 summer Olympic and Paralympic Games has today (Friday) revealed a Y150bn (€1.12bn/$1.33bn) reduction in its budget, adding that it expects an increase in revenues from the event of Y100bn.
The release of the second edition of the budget comes a year after Tokyo 2020 formally confirmed its budget plans for the first time. Tokyo 2020 has since been engaged in continued efforts to cut costs, encouraged by the International Olympic Committee (IOC) to do so in order to attract future Olympic Games bidders.
The updated overall Games budget now totals Y1.35tn, a reduction of Y150bn compared to version one, and Y35bn less than the interim figure indicated in the ‘Overall Division of Roles and Allocation of Costs’ agreement reached in May between Tokyo 2020, the Tokyo Metropolitan Government (TMG), the Japanese Government and local governments of cities and prefectures hosting events.
The budget comprises two main elements – the OCOG budget, which is the responsibility of Tokyo 2020, and the Other Entities budget, covering expenditure by TMG and the Japanese Government. The latter includes investment in sporting facilities and other social infrastructure aligned with Tokyo’s hosting of the Games which is envisioned to benefit the capital well beyond 2020.
The OCOG budget now stands at Y600bn and the Other Entities budget at Y750bn. Tokyo 2020 said these savings reflect sustained efforts by all key delivery partners to avoid recourse to public funds. Going forward, Tokyo 2020 will continue to seek further cost reductions, particularly in the areas of event operations, transport, accommodation and security.
“We want to deliver fantastic Games but at the same time… we don’t want to use any public funds if we can help it,” Hidemasa Nakamura, chief financial officer of Tokyo 2020, said, according to the Reuters news agency. “We will continue to try to reduce (costs) further.”
In version two of the budget, forecasted OCOG revenues have increased by Y100bn due to record new sponsorship revenue of Y310bn. Tokyo 2020 said costs in the OCOG budget are expected to be covered without recourse to public funding as a result of contributions from the IOC, corporate sponsorship, ticket sales, licensing revenues and other sources.
Tokyo 2020 said it will continue to look at ways of securing the additional $200m in revenue required to achieve budget balance. Compared with version one of the OCOG budget, expenditure in version two is forecasted to increase by Y100bn, of which Y20bn is venue-related and Y80bn covers services.
The venue-related budget has been increased to Y110bn based on the agreement made in May between the key delivery partners. In this, Tokyo 2020 took on responsibility for costs of temporary facilities and overlay of Japanese national or private venues.
It was revealed last week that Tokyo 2020 is set to reduce the capacity of its sporting venues by more than 30,000 as part of cost-cutting efforts. Japanese news agency Kyodo said the proposed reduction of seats at 12 venues is being discussed, including the new National Stadium that will be the centrepiece of the Games. An agreement had already been reached to reduce the National Stadium to 68,000 seats from the 80,000 planned when Tokyo was bidding for the Games.
Kyodo added that seats at the equestrian venue would be cut from 14,000 to 9,300 while those at Ryogoku Kokugikan, the boxing venue, would be reduced from 10,000 to 7,700 and at the archery venue from 7,000 to 5,000. Handball and cycling venues are among other facilities proposed for seating cuts.
When Tokyo won the hosting rights for the Olympics in September 2013, its bid outlined a proposed budget of Y730bn. “We are still looking at the overall Games with the big purpose of reducing costs overall, and in the process we need a clear explanation that is compelling, not just for Tokyo citizens but for all Japanese citizens,” Tokyo Metropolitan Government official Tetsushi Koyama said today.
Nakamura added: “I think there is a need to shrink costs further in version three and continue that in version four.”