Tokyo Olympics set to start, but Covid overshadows world’s biggest sports spectacle

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After a year-long delay, weeks of negative headlines and public reaction, the Tokyo Olympics open on Friday.

But that’s still a maybe, as Covid-19 continues to be a nuisance across Japan.

It has been quite a task for the International Olympic Committee to get to this point. The 2020 Tokyo Olympics have been postponed due to the pandemic. But after a vaccine that sparked optimism about the presence of fans, the new delta variant of the virus caused a setback.

The first positive case hit the athlete’s village last weekend and more than 70 cases have been linked to the Tokyo Games as Japan has a fourth state of emergency until August 22.

Still, the IOC and officials in Japan have made it clear: the event is going ahead for the time being. According to Reuters, the budget has already risen to an estimated $15.4 billion. And billions more are at stake, primarily a media rights deal with CNBC’s parent company, NBCUniversal.

In 2014, NBC and IOC signed a $7.75 billion media rights deal to expand their partnership. The current agreement runs until 2032. Add to that the limited audience – a loss of about $815 million – officials want to avoid missing out on media revenues

“The money for TV and partnership is just too big,” said Patrick Rishe, a professor of sports affairs at Washington University in St. Louis. “Using the word ‘unprecedented’ would underline how unique these Olympics will be.”

Bad headlines ruin the build

Athletes who tested positive for Covid have already withdrawn from competitions. In addition, as the number of cases increases in Japan, critics continue to suggest canceling the games. And the pressure might start to show.

On Tuesday, Toshiro Muto, an official of the Tokyo Olympics organizing committee, did not rule out the possibility of the games being canceled at the last minute due to the pandemic.

The IOC has its Covid ‘playbook’, a set of guidelines designed to keep people safe in competition areas. Protocols include daily saliva tests for athletes, and if symptoms occur, a nasal swab is required. Olympic winners also receive medals on a tray to limit contact, and no handshaking or hugs are allowed during ceremonies. Anyone who breaks the rules can be banned from the Olympics.

Virus issues aside, the Olympics have struggled with more negative headlines leading up to the opener.

The bad news cycle includes the public gaffe of IOC President Thomas Bach on July 13 during his first appearance in Tokyo. Musician Keigo Oyamada resigned from his job as composer of the Tokyo Olympics on Monday after his alleged bullying past resurfaced. And this comes months after Yoshiro Mori, a top Tokyo Olympics official, resigned in February over sexist comments.

Top sponsor Toyota said it would limit its attendance at the Olympics as public discontent in Japan increased over the holding of the event. The automaker will still run ads in other markets, but will not publish the event in Japan. Marketing expert Ronald Goodstein called Toyota’s decision a “good move.” He added that the timing to support the Tokyo Games may not be appropriate.

Goodstein, an associate professor of marketing at Georgetown University’s McDonough School of Business, added that “companies with a large Japanese presence and/or companies that rely on the Japanese market for sales” could match Toyota’s move.

“You could have developed a great series of ads for this, but the timing might not be right. It’s a medical situation there. People will be tuned in to how many people get the virus, how fast it’s spreading and what’s going on,” he said. says Goodstein. “Sport will still be the main story, but it won’t be the only story, and that detracts from the events.”

Goodstein’s marketing advice to brands: use patience.

“Just because you create a series of ads doesn’t mean you have to run them,” Goodstein said. “See what the world thinks during the first week. If it’s good, campaign. But if it’s not there, my suggestion is to back off and wait for another big event.”

Rishe said the negative headlines created an “abnormal build-up” around athletes competing in the Tokyo Games. And that could deduct from future approval opportunities.

Money losses at stake for athletes

U.S. Olympic athletes will receive approximately $37,500 per gold medal, $22,500 for silver, and $15,000 for bronze finishes. But what happens after the competitions has the most impact, as most athletes attract endorsement deals after winning competitions.

Athletes such as Usain Bolt (with his $30 million in endorsements) and Michael Phelps have benefited from global fame during their time-winning competitions. And current Olympians like gymnast Simone Biles and swimmer Katie Ledecky should also do well if they succeed in Tokyo. But for lesser-known athletes, Covid could hurt their exposure.

If the virus continues to interfere, it could affect an athlete’s “Q-score,” which is used to determine popularity and liking “because people don’t know who they are,” Goodstein said. most affected.

“I don’t think we’re going to get a lot of exposure and ad campaigns this year,” Goodstein added.

The thing is, those Q metrics can be positive if viewers tune in to them.

The Olympics broadcasts remain ‘beach property’

Historically, the Summer Olympics were a huge draw. In 2016, the two-week event in Rio attracted an average of 27.5 million viewers across all NBC platforms and delivered 3.3 billion minutes of streaming video. It brought in about $1.2 billion in ad sales for NBC.

For the Tokyo Games, the network plans more than 7,000 hours of total content, featuring 41 sporting events, including new leagues such as baseball, softball, skateboarding, surfing and karate. In media circles, some expect viewership to decline, especially if there are no fans in the stands. But experts also suggest that NBC would still be making money because it’s still sports.

“I still think they’ll be interesting to watch,” Rishe said. He added that there is interest around American basketball on both the men’s and women’s sides, as both teams “don’t look like shoe-ins.” [to win] as they have done in the past.”

Former CBS Sports president Neal Pilson labeled the Olympics and other high-level sporting events as beachfront property. He said sports content will continue to appeal to top-paying advertisers even as ratings decline. The reason: sports still make up a large share of the total TV viewing audience.

“It’s not what it used to be, but sporting events remain the property of the beach,” Pilson says. “NBC doesn’t seem very concerned.”

“They have increased the average unit price for the Olympics and the Super Bowl,” he added. “The audience level may not be the same as last summer’s Olympics, but your audience share will be equal to or as good as the last event.”

Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics holds the U.S. broadcasting rights to all Summer and Winter Games through 2032

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