◼ COVID-19 / BUSINESS Bloomberg Businessweek March 16, 202030
MARCO ALPOZZI/LAPRESSE/SIPA USAworldwide using holograms, meaning a packed
stadium in Brazil could see the games unfold on the
field much like those seeing the real event in Osaka.● Are TV viewers
more valuable?
“If it’s an issue of people physically being unable to
go to the games, that’s not as big an issue as people
[not] watching the games through broadcasts,” says
Harvey Schiller, a longtime sports and media execu-
tive who ran the U.S. Olympic Committee from 1990
to 1994. Of the $5.7 billion the IOC earned in the last
four-year Olympic cycle, almost three-quarters came
from media companies. An additional 18% came
from top-tier sponsors, most of which are locked
into the Olympics far beyond 2020.
The loser in this scenario is Tokyo. Japanese orga-
nizers are on the hook for selling $840 million in
tickets. And while the IOC’s partners sign on for
multiple cycles, the host committee landed dozens
of local sponsorships—worth a record $3.3 billion—
specifically for these games.
Sponsors’ planned activities can be substantial.
Bridgestone Corp., the only worldwide Olympic
partner based in Tokyo, expects to host several hun-
dred customers, partners, and employees during the
three weeks of the games. It’s renting a fan experi-
ence location in Tokyo Waterfront City with product
displays, games, and demos. The official Tokyo 2020
buses will have Bridgestone tires, two new sporting
venues will be earthquake-proof thanks to supports
made with Bridgestone rubber, and the company
has sponsored 75 athletes who can appear in global
ad campaigns. For Bridgestone and other big spon-
sors, thosehospitality and promotional efforts lose
a lot of their value if few fans turn out in Tokyo.
The local economy was also counting on the
games. From 2015 to 2019, more than 80,000 hotel
rooms opened in Japan, many in anticipation ofthe event. The 205-room Moxy Tokyo Kinshicho,
a Marriott International hotel in east Tokyo, was
entirely booked by a single party for the Olympics,
says Seth Sulkin, whose real estate development firm
Pacifica Capital developed the hotel. “We expect the
prominence of the Olympics to boost Japan’s tour-
ism for years to come,” he says. “That’s one of the
reasons it’s critical that it happens—not for the short-
term impact, but for the long-term impact.”
Goldman Sachs analysts predicted the Japanese
economy would get a $7.6 billion (800 billion yen) lift
from the games, including $1.4 billion from inbound
visitors and an additional $3.8 billion in domestic
spending. If the virus isn’t contained by the end of
May and the Olympics are canceled, Goldman esti-
mates the economy could face losses eight times that
total not only by losing the direct boost but also from
the lingering effect on tourism, domestic consump-
tion, exports, and capital investment.
The number of foreign visitors tripled, to 32 mil-
lion annually, in the five years after Tokyo won
the bid, but it’s still shy of the 40 million target.
“People are expecting the Olympics to complete
Tokyo’s standing as an international tourism hub,”
says Hideo Kumano, an economist at Dai-Ichi Life
Research Institute. “Missing that goal would cause
irreparable damage.”
The IOC, with a $900 million reserve fund for
interrupted games, would likely help backstop the
host committee if needed. Both groups have insur-
ance, though both declined to offer coverage details.
“We have never discussed canceling the Games,” the
host committee wrote in an email. “Preparations for
the Games are continuing as planned.”
Empty seats at sporting events are increasingly
common. College football attendance has dropped
in eight of the past nine years; MLB attendance is
down 14% since 2007. But media money has bulked
up budgets, and media companies hold evermore
sway over decisions. That’s dangerous for the IOC,
because empty stands would likely make it tougher
to interest prospective host cities. As it is, fewer
places want what’s become a dubious honor. Beijing
was awarded the 2022 Winter Games over the only
other bidder, Almaty, Kazakhstan. The 2026 games
had no fully viable bidders six months before the
IOC was set to announce a winner. It eventually went
jointly to Milan and Cortina d’Ampezzo in Italy.
And there’s another reason that competing in
a packed stadium might be critical, even in this
broadcast-centric era. “Fans give the impression
that the event is highly relevant,” says Rick Burton,
former chief marketing officer for Team USA. That’s
something money can’t buy. �Eben Novy-Williams,
with Yoshiaki Nohara, Ayai Tomisawa, and Lisa Du⊳ Juventus beat Inter
2-0 in the deserted
Allianz Stadium in Turin,
Italy, on March 8What I’m
telling clients
Lee Jacobs, partner,
Helbraun Levey, a New
York law firm focused
on the hospitality
industry
One anxiety I’m advising
clients on is what to do
if an employee shows up
sick. In the hospitality
industry, you have to be
aware that employees
are hourly, and if they
miss a day’s pay, that
could have a serious
effect on their finances.
You have to assume a
sick person will show
up to work. So what to
do? We isolate them,
we ask them to exclude
themselves, and we
send them home. You
don’t want to be known
as “restaurant zero.”
Another question
I’ve gotten: Can I
take my employee’s
temperature when they
show up at work? No.
Just think about that
for a moment. If the
restaurant owner does
the thermometer wrong,
or if the thermometer
is miscalibrated,
think of that slippery
slope. Under the
law, an employee’s
health is private.
This is a problem
that’s happening in
Washington state.
Amazon and Facebook
are telling people to
telecommute, because
if one person has
been affected, you
can’t say, “Jane Smith
is the one who has
coronavirus.” �As told
to Kate Krader