The Summer Olympic Games in Tokyo this summer could be cancelled over concerns about the spread of coronavirus, according to International Olympic Committee member Dick Pound, and the game's sponsors could lose out big.
Many high-profile sponsors have paid top dollar to have their logos prominently featured at the games.
Coca-Cola (KO) - Get Report, Alibaba (BABA) - Get Report, General Electric (GE) - Get Report, Intel (INTC) - Get Report and Visa (V) - Get Report are among the “Worldwide Olympic Partners” for the game. These sponsors have invested up to $100 million each to obtain premium sponsoring.
Alibaba, for example, negotiated a 12-year contract with the International Olympic Committee worth a reported $800 million. Alibaba said it has plans to “digitally transform the Games” through initiatives including facial recognition technology, travel guidance and enhanced e-commerce capabilities.
Plus, the Chinese e-commerce giant gets to plaster its logo all over the Olympic stadiums, thus enhancing its profile for hundreds of millions of television viewers.
Comcast's (CMCSA) - Get Report NBCUniversal, which has the rights to broadcast the Olympic Games through 2032, also could be bruised if the Olympics are cancelled. The media giant paid a total of $4.38 billion for the television rights to the 2014, 2016, 2018 and 2020 games. It paid $7.65 billion to extend a contract that will run from 2021 through 2032.
Japan, meanwhile, will take a serious hit if the Olympics are canceled especially after its fourth-quarter GDP plunged by 1.6% sequentially, more than economists' expectations that called for decline of 1%.
Japan and its municipalities are estimated to have spent around $9 billion on the games, according to Japanese daily The Mainichi.
The Diplomat reported that hotels that are a part of Japan's tourism industry, which has suffered since the coronavirus outbreak, spent $1 billion on renovations alone.
London reportedly paid $14.6 billion for the privilege of hosting the Olympics in 2012 and Athens spent $15 billion in 2004. Beijing reportedly spent a whopping $42 billion to host the Olympics in 2008.
Pound, the longest-serving member of the IOC, said a decision on canceling the games could come as soon as late May if the virus isn’t under control by then.
“In and around that time, I’d say folks are going to have to ask: ‘Is this under sufficient control that we can be confident about going to Tokyo or not?’” he said in an interview with The Associated Press.
“A lot of things have to start happening. You’ve got to start ramping up your security, your food, the Olympic Village, the hotels, The media folks will be in there building their studios,” Pound told the AP.