Commercial influences “minimal” in Tokyo 2020 postponement decision, insists IOC advisor

Source:China Sport ShowRelease time:27-Mar-2020Clicks:

Article From：SportsPro

Commercial partners and broadcasters will have “absolutely minimal” influence over the decision of whether to postpone the Tokyo 2020 Olympic and Paralympic Games, according to former International Olympic Committee (IOC) marketing director Michael Payne.

Japan’s staging of this summer’s event, which is due to begin on 24th July, has been thrown into serious doubt amid the ongoing coronavirus pandemic that has put virtually all of professional sport and major gatherings of any kind on hiatus for the foreseeable future.

According to Payne, who helped broker the IOC’s global TOP sponsorship deals with the likes of Alibaba and Coca-Cola-Mengniu Dairy, the potential impact on Olympic sponsors and broadcasters will not be a defining factor in any decision to delay the Games, despite those companies having collectively spent billions on acquiring media and marketing rights to the event.

“I know that’s not the understanding in the media, and is maybe not the way it would work for all sports properties, but the Olympics has always had a very clear separation of church and state,” said Payne.

“Where the Games are held, what happens now with the Games in light of this, is a 99 per cent sporting decision, starting with the athletes and then the federations and NOCs [national Olympic committees].

“The broadcasters and the sponsors, obviously they’re dealing with logistical issues, and they would be advised continually of developments, but they’re not going to be consulted: ‘This is what we’re thinking, what do you think?’ Equally, most of the sponsors, ideally all of them, are not going to tell the IOC: ’This is what you’ve got to do.’

“That was a ground rule within the Olympics which was established back in the 80s.”

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According to the Tokyo 2020 host city contract, the IOC has sole discretion over cancellation or postponement, although any decision would be made in close consultation with Japanese officials, not least the country’s prime minister Shinzo Abe, an influential figure in Tokyo’s victorious bid who has staked much of his personal reputation on delivering a successful Games.

To date, the IOC has refused - at least publicly - to entertain the idea of postponing the event amid growing calls to put it off until next year. On 17th March, the global Olympic body said it ‘remains fully committed’ to staging the Games this summer as planned but acknowledged that ‘no solution will be ideal in this situation’, adding that there is ‘no need for any drastic decisions’ and that ‘any speculation at this moment would be counterproductive’.

IOC president Thomas Bach has since reiterated the committee’s unwavering stance despite mounting pressure from athletes and NOCs, many of whom believe Olympic decision-makers are putting the health of competitors at risk by insisting they continue to train throughout government-imposed travel restrictions and ongoing lockdowns in countries around the world.

“What makes this crisis so unique and so difficult to overcome is the uncertainty,” Bach said in an interview with the New York Times. “Nobody today can tell you what the developments are tomorrow, what they are in one month, not to mention in more than four months.

“Therefore it would not be responsible in any way to set a date or take a decision right now, which would be based on the speculation about the future developments."

He added: “The cancellation is not on the agenda."

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Payne, who spent two decades as the IOC’s marketing and broadcast rights director after taking up the role in 1983, told SportsPro he supports the committee’s refusal to set a deadline for a decision with four months still to go until the opening ceremony.

“To be clear, there is no magical date,” he said. “I think the IOC, understandably, is wanting to avoid there suddenly being a cut-off date when all the journalists get out their stopwatches and count the clock down.

“Two weeks ago, China was starting to look as if it was coming through this, Japan coming through this, so you’ve potentially got the host country back in shape. Then it’s a question of the rest of the world being able to go there. Obviously, today, that’s an impossibility.”

Tokyo organisers have said they are spending US$12.6 billion to stage the Games, but the final figure could reportedly amount to double that. With so much money invested, so many years of planning at stake, and so many moving parts covering operational areas like sponsorship, broadcasting, ticketing, hotels, transportation, security and merchandising, any decision will not be taken lightly, said Payne.

“The domino effect and the matrix of all of this is mind-boggling,” he added.

The commercial and logistical implications of delaying the Games are difficult to fathom, such is the staggering scale and complexity of the world’s largest sporting event, which are set to feature some 11,000 athletes as well as many more spectators, officials, volunteers, and members of the media.

Last year, the Tokyo 2020 organisers surpassed US$3 billion in domestic sponsorship revenue, almost three times more than for any previous edition of the Games. Corporate Japan has clamoured to be involved, with more than 60 Japanese companies backing the event nationally. The IOC’s own global sponsors, of which there are currently 14, and dozens of international broadcasters have also forked out hundreds of millions if not billions to align themselves with the Olympic brand over multiple editions of the Games.

According to Payne, Olympic host city contracts and commercial agreements have been “carefully refined” over four decades and are “probably as state of the art as you could ever make it in the ultimate franchising structure”. As such, they will include all the necessary contingencies and legal protections for all parties.

US network NBC - which is in the midst of a 12-year, US$7.65 billion TV rights deal, the most lucrative of all Olympic broadcasting contracts, and has posted a record US$1.25 billion in ad sales for Tokyo 2020 - has indicated it is covered for any losses accrued in the event of cancellation.

Discovery, which holds broadcast rights in multiple markets across Europe, previously revealed it has taken out cancellation insurance, while Australia’s Seven West Media will reportedly receive a full refund should the Games not go ahead as planned.

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“Some of this is already pretty well planned in,” Payne said. “Broadcasters are all on long-term contracts, as are all of the TOP partners. There are provisions for dealing with force majeure and other aspects, so I don’t see any material sudden shift or change. Obviously for suppliers and operators it’s ever-more complicated.”

In Japan, which had recorded just over 900 confirmed coronavirus cases as of 18th March, opinion polls suggest the resident population is growing increasingly concerned about the prospect of staging the Games as planned. A recent survey by Kyodo News found that almost two thirds of Japanese voters thought the Olympics should be postponed.

At the time of writing, there is a growing consensus behind the idea of a one-year delay, but next summer’s sporting calendar is already crowded, especially with Uefa, European soccer’s governing body, having already shifted its 2020 European Championships to 2021.

“The IOC is not going to get bounced into a decision by political pressure or media pressure,” said Payne. “Remember, three months before the PyeongChang Games [in 2018], the media and politicians were all saying the Games must be cancelled because Trump and Kim were going to declare nuclear war and teams were saying ‘maybe we’re not even going to go’. Everybody’s forgotten that.

“This isn’t an existential crisis, the end of the Games, the end of the road. When I joined the IOC, [around the time of] the Moscow boycotts and Los Angeles boycotts, [it was] not just were the Games going to happen, would there ever be another Olympic Games?

“The value and benefit of having been through this over the course of 30, 40 years is you don’t just take a knee-jerk reaction on the pressure perspective at the moment.

“Those polls are probably helping Abe to recognise that the Japanese public would support a postponement. They’ve invested all of this to stage this celebration, you don’t just suddenly walk away from it and throw it all away.”