UPDATED: The International Olympics Committee will take a month to decide whether the 2020 Tokyo Summer Olympics can proceed as planned, given the global spread of coronavirus, a move that would potentially wreak havoc on the fortunes of hundreds of athletes, the media industry and the plans of many big-spending advertisers.
The IOC said Sunday that it will mull scenarios that “relate to modifying existing operational plans for the Games to go ahead on 24 July 2020, and also for changes to the start date of the Games.” Still, the group said that “a cancellation of the Olympic Games Tokyo 2020 would not solve any of the problems or help anybody. Therefore, cancellation is not on the agenda.” A longtime IOC member, Dick Pound, told USA Today on Monday that the Games were sure to be postponed, with details to be ironed out over the next few weeks.
Japanese Prime Minister Abe Shinzo on Monday also acknowledged the mounting difficulties facing the games. He has previously spoken of only wanting the games to play in their “complete form.”
“If it is difficult to hold the games in such a way, we have to decide to postpone them, giving top priority to (the health of the) athletes,” Abe said, addressing the Japanese parliament. “Although the IOC will make a final decision (on the matter), we are of the same view that cancellation is not an option.”
The IOC and Abe announcements represent the first sign of recognition that the Games, a global spectacular, may be truly threatened by the contagion. In past weeks, officials in Tokyo and at the IOC have remained steadfast that the Games should continue to take place as scheduled in July and August. Several organizations involved in Olympics training have urged the IOC to postpone the extravaganza, noting that athletes have been unable to prepare for their events, and that qualifying contests cannot be held.
Postponing the event until later in the year would potentially put the Olympics alongside other big sports games, including the National Football League’s 2020-2021 season or late-season baseball from Major League Baseball. Some media executives have begun to speculate that some of the leagues that have suspended their seasons – like the National Basketball Association or the National Hockey League – could move their remaining games into the third or fourth quarters as well.
Then there are the logistics. The IOC acknowledged Sunday that a postponement would raise any number of issues. “A number of critical venues needed for the Games could potentially not be available anymore. The situations with millions of nights already booked in hotels is extremely difficult to handle, and the international sports calendar for at least 33 Olympic sports would have to be adapted,” the group said “These are just a few of many, many more challenges.”
Canada said Sunday night it would not send its athletes to take part in a Tokyo Olympics this summer. The Canadian Olympic Committee urged the IOC “to postpone the Games for one year and we offer them our full support in helping navigate all the complexities that rescheduling the Games will bring,” according to a statement. “While we recognize the inherent complexities around a postponement, nothing is more important than the health and safety of our athletes and the world community.”
The absence of a Summer Olympics would pose a unique challenge for many involved. Comcast, which has the rights to show the Games in the United States has been counting on hundreds of hours of coverage of swimming, archery and trampoline gymnastics to lure millions of viewers to its screens in an era when many of them might prefer to stream a movie, comedy or drama at times of their own choosing. Discovery has been trying to build up a European media business to diversify its operations which are largely dependent on unscripted content showcases like TLC and Food Network. And Madison Avenue was banking on the big event to help it gather together the kind of massive consumer audience that has proven tougher for TV to accumulate when so many other ways of watching video exist.
NBCUniversal has already sold more than 90% of its ad inventory for the Tokyo Games, a haul valued at more than $1.25 billion. The company’s parent, Comcast, agreed to pay $4.38 billion for the United States media rights to four Olympics from 2014 to 2020, and $7.75 billion for broadcast rights to the Olympic Games between 2021 and 2032. NBCU came away from its last Summer Olympics, the 2016 Games in Rio, with approximately $250 million in profit. Discovery in 2015 agreed to pay approximately $1.44 billion for rights to broadcast the four Olympic Games between 2018 and 2024 in Europe.
Both companies have been sanguine about their prospects. “We try to anticipate for big events what might happen so that we’re protected there, and we also have insurance for any expenses we make. So there should be no losses should there not be an Olympics,” said Brian Roberts, Comcast’s CEO, earlier this month. “There wouldn’t be a profit this year. But again, we’re optimistic the Olympics are going to happen.” During a recent call with investors, Gunnar Wiedenfels, Discovery’s chief financial officer, suggested a canceled Olympics was “not going to have any adverse impact on our financials.” Discovery has long had insurance in place to safeguard its Olympics investment, executives said.
“These are extraordinary and unprecedented times, and we fully support the IOC’s decision to step up its scenario-planning for the Tokyo Olympics,” NBC Sports said in a statement Sunday. “We are prepared to stand behind any decision made by the IOC, the Japanese government, and the world health officials with whom they are working regarding the Tokyo Olympics.”
The question of when the Olympics will take place is putting severe pressure on the U.S. TV ad market, according to media buyers with knowledge of recent negotiations. Advertisers who have signed deals to sponsor the Games don’t want to pull their money, because the event will no doubt be watched by millions seeking refuge from difficult times sparked by the coronavirus. At the same time, these advertisers may have need of the dollars they committed to shore up their business, or to advertise more heavily in the current time.