Tokyo’s delayed Olympics: Who pays bills for another year?

With Tokyo Olympics postponed until 2021, w comes multi-billion-dollar question: Who pays bills for delay, and how large will y be?

most likely answer is — primarily Japanese taxpayers.

“Of course re will be costs,” organizing committee CEO Toshiro Muto said when postponement was anunced. “As for how much, we have figures with us right w. As for who will shoulder se costs? Needless to say, y are t going to be easy discussions, so we are t sure how long y will take.”

Japanese financial newspaper Nikkei put ded cost at $2.7 billion, citing an estimate from local organizers.

Tokyo organizers will have to renegotiate new leases on venues, pay for maintenance at arenas, and maybe find different fields of play. y will also have to deal with real estate developers who are alrey selling off thousands of apartments at what will be Athletes Vill. organizing committee also employs 3,500 staff members, and some may lose ir jobs to cost cutting.

Tokyo, driven by vertising giant Dentsu Inc., has sold $3.3 billion in local sponsorships, more than twice any previous Olympics. Those brands will be clamoring to kw what y get for ir money. Refunds? Make-good deals? New contracts?

And thing much can be done until new dates are set to replace what was to be this year’s Olympics: July 24 through Aug. 9, 2020.

“ general target is summer of next year,” said Yoshiro Mori, president of organizing committee and a former Japanese Prime Minister. “We have to go through scheduling, international events. Many things will have to be justed before we come up with a certain time frame.”

Of course, all of rescheduling problems are compounded by uncertain spre of virus and recent downturn in ecomy.

Muto ackwledged tough talks are ahe with International Olympic Committee, which controls games but leaves host country to pick up most of costs.

First, some Tokyo Olympic financing basics.

Local organizers and Japanese government bodies say y are spending $12.6 billion to put on Olympics. However, a national government audit report in December put costs at $28 billion . re is always debate about what are — and are t — Olympic costs, and creative accounting is t unkwn.

When Tokyo won Olympic bid in 2013, it said total cost would be $7.3 billion.

Private-sector money makes up $5.6 billion of today’s total budget. rest — whatever grand total — is public money.

Tokyo has spent almost $7 billion on temporary and permanent venues — about 85% from public funds. most expensive venue is new national stium, a national government project billed at $1.43 billion.

For its part, Switzerland-based IOC has contributed $1.3 billion to finance Tokyo Olympics, a small fraction of total cost. IOC h income of $5.7 billion for last four-year Olympic cycle (2013-2016). Almost three-quarters of income is from selling brocasting rights, with ar 18% from sponsors.

IOC also has a reserve fund of about $2 billion, and insurance to cover losses.

Bent Flyvbjerg, an author of “ Oxford Olympics Study 2016: Cost and Cost Overrun at Games,” in an email to Associated Press, said IOC should share more of costs and termed it a “mopoly.” study found Olympics have “highest aver cost overrun of any of mega-project.”

Flyvbjerg said IOC should “pick up a larger part of bill for games, which IOC profits from. Tokyo and Japan will pick up ded cost, unless IOC makes an exception and expands reserve fund, which is what IOC should do from an ethics point of view.”

Tokyo was planning to use 42 venues for 33 sports. One extra venue was planned for Paralympics. Muto said it was t clear how many venues would be available a year from w.

“Some venues we might have to keep renting until next year,” he said. “Because at some venues it takes about a year to get m rey. We can’t take m down and n set m up again for Olympics. That also means ded costs.”

biggest heache could be Athletes Vill , which is to house 11,000 Olympians and staff, and 4,400 Paralympians and staff. sprawling site on Tokyo Bay — 5,632 apartments — is to be sold off after Olympics and reports say one-quarter have alrey been sold. Some cost more than $1 million.

One of developers, Mitsui Fudosan Co., said it has suspended sales at complex, which will include 23 buildings.

Even lining up 80,000 unpaid volunteers again could be expensive and create more work. city of Tokyo was also planning to use 30,000 ded volunteers to help fans find train lines, street dresses, and dish out general help for n-Japanese speakers.

Ticket demand has also been unprecedented with 7.8 million available, and demand exceeding supply by 10 times. Ticket sales are expected to raise about $1 billion for local organizers.

All tickets have a force majeure clause, which might get organizers off hook of paying refunds if coronavirus is deemed to be “beyond Tokyo 2020’s reasonable control.”

“We don’t have a final conclusion about what our policy will be,” Muto said. “As much as possible, we want to make sure that people who have alrey bought tickets will get special consideration.”

(AP Photo/Eugene Hoshiko)