GAB Studio

The coronavirus that originated in the Wuhan Provence of China has pandemic-like patterns as of current. While this is obviously catastrophic in health terms, it also has a chance of- and is already having these effects on the sporting industry. There have been dozens of events across multiple countries that have been altered in nature, postponed or even cancelled. For example, the Tokyo Marathon was limited strictly to elite athletes, The Juventus-Inter Milan game is about to be played in a massive stadium without a crowd, Formula 1 races in China have been cancelled, and many other sporting events, all different sports (athletics, badminton, rugby, tennis, MMA) have been cancelled or postponed, and of biggest stature, the 2020 Tokyo Olympic Games are at risk of being cancelled.

I would like to present just a few thoughts about how interesting this situation is and how it is effecting so many different people and companies:

1. The Olympics have never been cancelled in non-wartimes. The games have been cancelled 3 times (1940 was also in Tokyo) as a result from the World Wars. This virus that is an uncontrollable force of nature presents many new problems that are un-chartered territory to the International Olympic Committee and any host committee in general. This brings in a lot of questions about what the heck to do as there is simply no precedent to follow. This will eventually set a precedent in sport management, whether positive or negative, and will forever shape the future of sporting event disaster management and relief.
2. This time frame we are in right now (February-March) is a very critical time for the host country of a mega-event such as the Olympics. This time of limbo in regards to the virus is critical for both the containment and eradication. It is simply too early to move the Olympics to a new location and give up on Tokyo completely because of the investment they made for these games and possible containment of the virus, but once late May rolls around and the IOC makes a decision, if the games cannot be held in Tokyo, it will be too late for the games to move to another location. While they could be spread across multiple locations, this would defeat the purpose of the Olympics and instead act as more of a bunch of separate world championship events. This is causing a lot of back-and-forth and simple confusion about what to do. In the case that the virus is still a problem in late May, it will be of pandemic proportions and the games shouldn’t be held anywhere anyways.
3. Another problem that arises falls in the realm of sport ethics. If the Olympics are indeed still held but there is also a travel ban on Chinese residents or surrounding nations that still have active virus outbreaks, is it ethically moral to bar a country of athletes from competing in the games? While this has been done before to Russia, it was due to a conscious act they performed by taking performance enhancing drugs, something they could have not done and saved their place in the games. In this case for China, the virus is an uncontrollable virus that, due to its very nature, puts others at risk but was not brought upon themselves. Where is the line drawn between maintaining morality and fairness of the games and cancelling the games all together and heavily impacting hundreds of local businesses, governments, corporations, broadcasters, employees, athletes, and everyone in between?
4. Currently, most sports are going through their olympic qualifying events. These events are often over-looked but are vital to countries securing a spot for their country, not a specific athlete, in any given event for the games. These are followed by each countries in events better known as Olympic Trials, where athletes compete for those spots that were earned from previous competitions. With events being cancelled and Chinese teams/athletes having to forfeit from these qualifying events, there is beginning to be a problem with these athletes not being able to compete in the Olympic Games given the virus is contained and the games still take place in late July. These events cannot be delayed much more without having implications on already set events for different countries hosting their own Olympic Trial events in May-July.
5. The possible biggest problem that Japan and Tokyo in particular face is the financial losses that a cancelled Olympic Games would imply. The city has spent upwards of $15 billion on renovations and building costs for preparing for these games, with estimated numbers being closer to $25 billion. While every Olympic Games has run a deficit aside from a few games in the 1900’s in LA, the biggest transition comes in the years after the games. One of the big initiatives that the IOC has taken in their Olympic Agenda 2020 is ensuring long-term benefits after the games’ conclusion. This has been most recently been seen in analyzing how the games impacted Vancouver a whole decade later. This long-term sustainability is part of what makes the host committee okay with running deficits during the games, because it can cause a surge in benefits beyond the games that will eventually catch back up to them and one day turn into a profit. They hope that between new technology, improved environmental sustainability, increased tourism, and a stronger sense of national pride, they will eventually turn the billions of dollars in debt into a profit, socially and financially. Without being able to host the Olympics, they won’t get the big stepping stone in repaying the debts of hosting the games from the ticket sales, hotel and transportation taxes and costs, and the IOC is being impacted by even more expenses (most notably their TV broadcasting deal). Japan also wouldn’t be able to show off their culture in the opening ceremony format, which has become a huge factor ever since Beijing in 2008.
6. So many tickets have been sold and this has proven to be some of the most expensive Olympic tickets in recent history. With this comes millions of spectators from all around the world that have made flight and hotel arrangements that, if the Olympics are cancelled, will heavily impact both of these industries. These impacts will be most obvious in the financial losses. With so many people cancelling hotel stays or flights, this will be a loss in revenue for these businesses as it will most likely fall in a realm of time with free cancellation fees. This will also cause companies to have a surge of business through calls, but not in a good way. The day that the Olympics are (hypothetically) called is the day every single person from all of these industry’s companies will have to be hands on, answering phones from customers trying to help cancel arrangements, granting refunds, and (if the games are relocated) figuring out other arrangements. This will undoubtedly cause a surge in labor costs for these companies as they will have to deal with it efficiently as to not have to deal with even more problems.
7. The ignorance and lack of connection to the average population that Japanese bureaucracy has is also a big question for how this situation is being handled. These Japanese officials have profusely declined the notion of the games being cancelled, even after the longest standing member of the IOC says that it is a possibility that the games are cancelled. Just in terms of the recent developments with the coronavirus, there were officials who were near/around the cruise ship (that is still parked at sea, a petri dish for the virus) that were released without any form of mandatory testing for the virus, at least 1 of which has a confirmed case. The Japanese bureaucracy runs in a culture revolving around the term “kotonakare shugi” which translates to “no problem-ism”, literally… Anything that comes by that might not fit into what daily life looks like or something they weren’t already planning on is shoved away as if it isn’t there and isn’t a pressing or present problem. This can be expanded upon in this NYT article. This questioning of the host countries government does not help the IOC in making any final decisions regarding the games, as they don’t know what information coming out Japan is accurate and what is being said to give them a reason to not worry as much as they really should.
8. The most common thing that people outside of the sport realm are saying is “well why don’t they just move the games to another city?” – This is simply not a viable option for most cities. Cities are given 7 years to prepare their cities from winning their official bid to hosting an Olympic Games. This is 7 years of work and money that puts the country in the absolute best position to host the games, which is simply unreasonable to believe that a city could do in a handful of months. Another question is “well then why don’t they do it in a bunch of different cities that are built to host certain events” – well then that would negate the entire point of the games. The whole point of the games is having all of these elite athletes in one place over 2 weeks competing at the highest level and it would simply make each sport have a world-championship-like event instead of a cohesive mega-event. And finally, the other most common question is “why not just postpone it a bit” – well this is the least likely of all of these options. The world of international sport is a rigidly and very early scheduled schedule of events that already often have to be schedule themselves around the Olympics. With a cancellation of the events due to the virus, there is nothing they could have done to control such a force and there is no ethical question here. If you postponed the Olympics a few months and cancelled 3 other world championship events as a result of that move, you are consciously cancelling an event that will have similar (but much more minimal) effects on those other host cities that it would to Tokyo if the Olympics were simply cancelled. This is the less ethical and least optimal option presented. The IOC just has to find the line to draw, since there is no precedent and there is no way to tell what they should or should not do.

This Olympic run is going to be one of trial and error no matter what happens. Some sort of precedent will be set, whether it is positive or negative, of what management should do in case this happens at a future mega-events. At this point, there is simply nothing the IOC can do without being called out for jumping the gun. As I’ve explained, there’s so much ethical, financial, governmental, and obvious viral problems that need to be addressed and fixed for these games to proceed in a safe manner. What’s to happen next… Who’s to say?

Do you think the Olympics are going to carry on as though the virus never happened? Do you think they’re going to be cancelled? Moved to London? Another city? Postponed? Be sure to keep up with the news all across the web!