The building wraps were nothing but window dressing, really.
Literally as tall as a skyscraper and as big as an office building, they could swathe downtown’s most monolithic edifices with the likenesses of some of the USA’s most recognizable winter athletes. Yet when it came to hosting the 2002 Winter Olympic Games, they were just nice, not necessary. So it wasn’t until carefully scrutinizing the budget five months before the opening ceremonies — barely enough time to get the wraps printed and mounted before the world turned its attention to Utah — that the Salt Lake City Organizing Committee decided it could afford to commission 14 of them.
Two weeks later, on Sept. 11, 2001, the world was set on fire.
Suddenly, the idea of holding a massive, global sporting event in the United States appeared less than prudent. Other countries started suggesting they might sit this one out. And then there was the relatively minor yet still looming question of what to do with those building wraps? They couldn’t be returned and there was no place to store 500,000 square feet of mesh, perforated window film and vinyl banners if organizers postponed or canceled the Games.
That’s Tokyo’s situation today — times 1,000. Friday marks the day the 2020 Summer Games were scheduled to open in Japan’s capital city, but the COVID-19 pandemic has forced their postponement until 2021, with the hope that by then the virus that has killed more than 615,000 worldwide will be under control. But rescheduling the dates isn’t as simple as just looking at a calendar. It’s more akin to turning back time, with equally messy repercussions.
“I think what Tokyo is facing is probably the most difficult thing any Olympic Games can face because all of their commitments are time-bound,” said Fraser Bullock, the COO and CFO of the organizing committee for the 2002 Salt Lake City Olympics. “So all of these time-bound commitments now have to be unwound. And that’s very expensive.”
How expensive? Cost-of-postponement estimates range from an additional $2.7 billion to $5.7 billion. That’s for an Olympic Games that has already officially overshot its 2013 bid estimate of $7.3 billion by more than $5 billion. Combined, those costs could put Tokyo 2020 alongside London 2012 as the most expensive Summer Games in history, according to a 2016 Oxford study.
How can the delay cost nearly half as much as hosting the Olympics? Consider it the cost of turning back the clock.
Postponement problems
Most Olympic hosts, but not all — we’re looking at you, Rio de Janeiro, Sochi and Athens — build venues and invest in infrastructural improvements with the expectation that they will benefit the region for years to come. For Tokyo, that meant the construction of eight new permanent venues, the last of which was completed in February, and 10 temporary venues as well as the refurbishment of 25 existing facilities.
Nearly all of those, except the temporary structures, were scheduled to begin use by other entities within months after the closing ceremony for the Paralympic Games in mid-August. Now Games organizers must decide whether to allow those events to go on, making the venues less pristine come 2021, or to find other homes for them. Regardless, they will have to relocate events scheduled in those facilities between July 23-Sept. 5, 2021, the new dates for the Olympic and Paralympic Games. And each relocation will no doubt require some form of compensation.
The temporary structures may actually pose more of a conundrum. They were only supposed to last a little more than a month, not an entire year, but the cost of taking them down and putting them up again would likely be more than maintaining them over the next 12 months. The same goes for the tent cities that encircle most venues and were meant to serve as media workrooms, conference rooms, security and medical stations and the like.
Bullock called those “overlays” and said they ate up a massive chunk of the budget for Salt Lake City’s Olympics.
“We built these small cities, and the budget at that point in time was over $100 million,” of a $1.9-$2.5 billion budget, he said. “So this is a very significant effort.”
But wait, there’s more. Contracts signed almost a decade ago, even before organizers submitted their bid to the International Olympic Committee in 2013, must be renegotiated. That includes contracts for approximately 14,000 hotel rooms as well as buses and transportation equipment, grandstands and other seats, tables, generators, warehouses and concessions.
It also includes people. Full-time staff hired for the Games have to be paid for an extra year or let go and then re-trained. Tokyo’s 80,000 volunteers also will have to be retrained and their numbers may have to be expanded to accommodate coronavirus safety protocols.
It’s not all bad news for Tokyo, though. Take the athletes’ village for example. While more than a quarter of the newly built luxury apartments that make up the village have already been sold, ESPN reported that residents aren’t supposed to start moving in until 2023. So, organizers caught a small break there.
Insurance may also help cover costs stemming from the delay in some circumstances (though in Salt Lake’s case, it would only have kicked in if the Games were canceled). Plus, if organizers can pull off the 2021 event the way they have marketed it, as a global celebration of the world moving past the COVID-19 pandemic, then they also stand to bring in a record amount of sponsorship money.
“We can, together with the organizing committee, turn these postponed Olympic Games Tokyo 2020 into an unprecedented celebration of unity and solidarity of humankind,” IOC president Thomas Bach said in a speech last week, “making them a symbol of resilience and hope.”
In the grand scheme of things, though, that’s mostly happy talk. When or, rather, if the last firework erupts at the closing ceremony, the Japanese taxpayers will still be on the hook for billions of dollars.
Uncertain future
Bullock’s experience overseeing the 2002 Games gives him unique insight into the headache-inducing issues organizers of the Tokyo Game are wrestling with right now. He remembers how everything paused — ticket sales, sponsor interest, the construction of tent cities around each venue — in the weeks after the twin towers of the World Trade Center fell.
Within a few months, though, balance had been restored. The event’s rapid rebound was a tribute to the organizing committee’s thorough planning, which included preparing contingency plans for about 800 different unforeseen disruptions, among which was a terrorist attack.
“If you have a grade-based plan, then contingency planning builds on that and your team gets to the point where they say, ‘We’re ready for anything,’” Bullock said. “They really have their confidence.”
Yet while they share some similarities, the threat of a terrorist attack and the threat of a deadly virus are obviously different animals. Working with the Secret Service, Salt Lake City’s group beefed up security. Those efforts helped countries with reservations about attending the Games ultimately decide to send their athletes.
But even the Secret Service can’t stop the coronavirus.
For that reason, even with an extra year’s grace, nothing about the Tokyo Games is certain. Will fans be able to attend? Will athletes, coaches, media and personnel from the 206 National Olympic Committees worldwide have to quarantine for two weeks before entering the country? If they do, will the Games be held in a bubble, similar to the one established by the NBA in Florida, with strict penalties for those who leave it? Can the Games even be held?
Bach said last week that an Olympics with no fans is a last resort. Still, it’s preferable to further postponing the Tokyo Games, which he said is not an option. Games or not, after next summer the IOC’s attention will turn to the Winter Games in Beijing in 2022 and the Summer Games in Paris in 2024.
But if the Tokyo Games fall, so might the Beijing Games, scheduled for six months later. Richard Pound, one of the longest sitting IOC members, said during an interview with Reuters last week that the threat of losing both events to the virus is real, especially if no vaccine exists.
“Taking the political side out of it for the moment, say there is a COVID problem in July and August next year in Tokyo,” Pound said. “It is hard to imagine there is not going to be a knock-on effect in the same area five months later.”
Bullock called Pound “very candid and very observant,” but disagreed with his assessment. He said a postponement of those Games would be more likely.
The postponement of a Games has no effect on the Olympic schedule or the dates or sites of future winter or summer events, such as Milano Cortina 2026 or Los Angeles 2028. Once the viable window for an Olympics passes, the IOC has made clear it will cut ties and move onto the next event.
That doesn’t mean those actions don’t pose a threat to the Olympic movement as a whole.
We need to talk
Bullock said the IOC and potential hosts need to begin having detailed conversations about the risks of hosting the Games, who will shoulder them and how. If that doesn’t happen, he expects to see considerably fewer sites willing to host. That could put an abrupt end to resurgence of enthusiasm the IOC had just begun to see after changing its approach to the bid process last year — treating it less like a competition, which invited bribery and corruption, and more as a consultancy.
And what is the future of the Olympics if no one wants to host them?
“It certainly could deter cities,” he said. “I think it’s in the best interest of the entire Olympic movement, whether it’s the IOC or the NOCs or organizing committees or the international federations to come together for some comprehensive planning around the risk.
“This is a risk to the movement overall and all of these parties need to come together to address it so the cities who do want to be considered as future hosts have an answer to this issue.”
Bullock said SLOC took an extremely frugal approach to putting on the 2002 Olympics, and the building wraps are a prime example of that. They weren’t ordered until the organizers knew for certain that they could afford them.
“Six months out from the games, everything looked like it was going to go well. And so we started decorating the city,” he said.
The repercussions of the 9/11 tragedy took away some of that budget cushion, but Salt Lake City 2002 still ended up being one of the few Olympics in history to not lose money on the event.
It’s because of that experience that Bullock said he feels comfortable pursuing another Olympics in Utah in 2030 or 2034. He said he sees considerable value in hosting the Games if they are handled right.
Among the benefits he listed is an infusion of cash into the state for economic development, which he estimates will reach $6 billion the next time Utah hosts the Games. The marketing reach, and its economic shockwaves, also can’t be underestimated, he said. Plus, and he considered this the most compelling reason to bring the Games back, hosting an Olympics gives the locals an unequaled international experience.
“I think those [benefits] are so overwhelming that let’s make this work, let’s figure it out,” he said. “Every game has challenges, but we’ve got great people in the state. Let’s work through whatever challenges we face and let’s welcome the world back again.”
