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Most Tokyo Games sponsors see additional contributions as key factor to extend contracts

In this aerial photo taken on May 26, 2020, the National Stadium, the main venue for the 2020 Olympics and Paralympics, is seen in the center. (Mainichi)

Around 80% of Japanese sponsors of the 2020 Tokyo Games postponed to next summer due to the coronavirus pandemic responded to a recent Mainichi Shimbun survey that they were placing weight on the amount of additional contributions as a factor in deciding if they would extend their contracts over the games as their sponsorship expires at the end of this year.

    While none of the 51 sponsor companies that responded to the Mainichi survey said they were considering pulling out, the results showed that many firms were hesitant about spending more on the Tokyo Games due to their poor business performance amid the pandemic.

    Since July, the Tokyo Organising Committee of the Olympic and Paralympic Games has been asking sponsors to extend their contracts due to expire at the end of December this year as well as for additional contributions. The Mainichi Shimbun sent surveys to 67 companies that have contracts with the committee between mid- and late October, and 51 responded.

    Asked what factors they considered important when deciding on whether to extend their contracts and permitted multiple answers, 39 companies said, "the amount of additional contributions," followed by "whether the games will actually be held" by 37 companies. Twenty-six said they place weight on their own "business performance and financial conditions," highlighting many companies' concerns over the effects of the coronavirus crisis.

    Regarding extending their sponsorship, 20 firms said they were planning to do so, while no companies responded that they were not extending their contracts, and 23 said they were still "undecided." Of the eight companies that declined to answer, many said they were in the middle of finalizing terms and conditions with the organizing committee and that they were considering an extension "in a positive manner." It is expected that all of the 67 sponsors will renew their contracts by the deadline at the year's end.

    When asked about how they viewed the plans to simplify the Tokyo Games to slash spending, 34 firms said they appreciated the plans or appreciated them somewhat, while two responded they didn't appreciate them at all or didn't appreciate the plans, comparatively speaking. The remaining 15 companies declined to answer. Regarding the simplification plans, at least one sponsor replied, "Depending on the sponsorship (contract), companies have the right to receive job offers related to the operation of the games preferentially, so it would be a problem if they were oversimplified."

    Tokyo Games sponsors have the right to use Olympics logos in their advertising and publicity activities. Fourteen top-tier global companies have contracts with the International Olympic Committee, while the 67 have signed contracts with the Japanese organizing committee. The amounts of contributions made by domestic sponsors are said to be somewhere between 1 billion (about $9.5 million) and 15 billion yen (approx. $143 million) each. As of December 2019, some 348 billion yen (approximately $3.3 billion), an Olympic record, had been collected as contributions from sponsors.

    According to the organizing committee, the estimated cost of the games totaled 1.35 trillion yen (about $12.9 billion) before the postponement decision was made. While the plans to simplify the games are expected to cut the cost by roughly 30 billion yen (approx. $286 million), additional costs deriving from the postponement are said to top 300 billion yen (around $2.86 billion). The decision on how the additional costs will be divided is yet to be made, but the amount shouldered by public funds could increase depending on the sponsors' contributions.

    (Japanese original by Keigo Kawasaki, City News Department; and Koichi Ogino, Osaka City News Department)

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