Sponsors hire consultancies to assess Tokyo Olympics impact

14 June 2021 Consultancy.uk 3 min. read
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A number of Tokyo 2020’s corporate partners are alleged to have contacted consulting firms, as they consider how their association with the publicly unpopular event might impact their reputations in Japan. Recent polling has seen around a two-thirds majority of Japanese residents state they oppose their hosting of the over-budget games during a pandemic.

The modern Olympic Games or Olympics are leading international sporting events featuring summer and winter sports competitions in which thousands of athletes from around the world participate in a variety of competitions. Beyond the initial veneer of physical achievement and global community, however, the increasingly corporatised events have been attracting mounting criticism for the questionable legacy they leave in their wake.

From the crumbling infrastructure left by the Athens games, to the problematic geo-political edge of Beijing, the gentrification of the ‘development’ that was part of London 2012, and the police brutality deployed to ensure the Rio games were not disrupted by protests, it has long seemed that hosting the games might be something of a poisoned chalice. On top of the usual economic and social burden of welcoming the Olympics to town, though, Tokyo has also faced a global pandemic.

Sponsors hire consultancies to assess Tokyo Olympics impact

In March 2020, the IOC and the Tokyo 2020 organisers determined that the event should be postponed by 12 months due to the Covid-19 outbreak. Excluding the two world wars, the move was the first time the Olympics have been cancelled since the modern games began in 1896 – and like the moving of Euro 2020 to this summer, it came with a significant cost.

Official figures show that Japan has invested $15.4 billion into hosting the Olympics, of which some $8.6 billion come from Japanese taxpayers. The games are significantly over budget in this case, with their initial threshold standing at $13.4 billion – and with Japan’s economy continuing to struggle, public opinion has turned against the event.

During 2020, the pandemic recession saw Japan’s economy shrink by 4.8%, but a slow vaccine rollout and rising infections meant it continued to recede at an annualised 5.1% in the first quarter of 2021. As a result, even while economists warn that Japan faces a $16 billion loss should Tokyo 2020 be cancelled, a large majority of citizens feel Japan cannot afford to pump more money into their hosting. Earlier in the year, this saw 83% of those polled state they would oppose the holding of the games this summer – and while that has shrunk to 62%, that is still a significant number.

The Japanese government and organisers have also come under heavy criticism for hosting the event during a continuing medical emergency. An online petition calling for the cancellation of the Tokyo Olympics has garnered tens of thousands of signatures since its launch, with many citing concerns that tens of thousands of foreign Olympic athletes and officials could bring new variants of Covid-19 and further pressure on an already strained medical system.

While the IOC remains adamant the Games will go ahead this summer, the public backlash seems to already be impacting its potential to attract local sponsors. According to reports from the Financial Times, Japanese companies in particular are wary of tying their brands to an event overwhelmingly opposed by the country’s residents, and have hired consultants, to determine whether being associated with the Olympics could have a negative impact on their brands.

More than 60 Japanese companies, such as Toyota Motor Corp and beverage maker Asahi Holdings, have paid more than a combined $3 billion to sponsor the Tokyo Games. However, the Financial Times cited unnamed sources suggesting a number of sponsors had tapped firms including British origin firm Kantar, and Japan-based Intage and Macromill, to consider what negative impacts being associated with Tokyo 2020 might have on their brands.