After Thoughts on Tokyo Being Awarded the 2020 Olympics - Will Tokyo 2020 Lose Money?... What Do You Think?

In yesterday's post entitled, Tokyo Gets the 2020 Olympics... Unfortunately... I wrote about how I was unhappy about the Olympics coming to Tokyo as I have good reason to believe that the Japanese government will spend taxpayer monies on construction projects for the Olympics and, after it is all over, the average Japanese tax payer will be saddled with billions of dollars of debts. 

Guys like Al Hitler or North Korea's Dim Son like the Olympics, they get a chance to show their public how great they are! Read about the wisdom on India concerning the Olympics here.

I think historical precedent of the Olympics themselves and the track record of the Japanese government with debt at 245% of GDP are pretty strong evidence to support my fears....

I wrote in that post:

"Oh, but the Olympics will be good for the economy!" Oh really? Tell another country that is deeply into corruption and kickbacks, Greece, about that one. This from the Daily Beast:

"Indeed, the $12 billion cost of hosting the Games contributed to the Greek economic collapse and left an abandoned Olympic Park, which has been overrun by weeds and graffiti artists."   

Yeah, but that's Greece. Japan is different, right? 

Nope. Japan should have learned her lesson a short 16 years ago. Please refer to Yahoo: Olympic Cities Booms and Busts?

Nagano, Japan (Winter 1998) Boom or Bust? Bust 

The full cost of the Nagano Winter Olympics will never be known as the documents accounting for money spent on the Olympic bid were burnt on the orders of the Olympic Committee vice-secretary general, Sumikazu Yamaguchi. (Emphasis mine) Yet it is clear that it went vastly over budget, with new infrastructure to make the Games work in this small Japanese city costing up to A$9.4 billion. As a result, Nagano fell into recession, with the debt on Olympic projects roughly A$28,000 per family and growing. It is estimated that these debts will take until 2015 to pay off. 

The Olympic venues alone cost A$20.6 million per year in upkeep, and their rental income brings only one-tenth of that amount. Although Nagano is working hard to stop the Olympic venues turning into rotting white elephants, the cost of their upkeep is not easy for the city's finances. Today it still costs A$2.3 million a year alone to maintain the M-Wave, where local school children take skating lessons on a high-speed 400-metre rink in winter. The installation of a high-speed bullet train during the Olympics also posed problems for the local hotel industry as more skiers came on day trips rather than spending the night and locals are more inclined to go on shopping days to larger cities. 

It is estimated that the last Olympics in Japan in Nagano in 1998 lost $10 billion USD. Read the rest of Tokyo Gets the 2020 Olympics... Unfortunately... here. 

After I wrote that article, I received calls and emails from people who argued with me and others who were totally supportive. So I decided to do even more research on the subject asking myself the question; "Is it really possible to make a profit on the Olympics?"

Well, before I give you my useless two cents, here's some interesting information I found. Did you know that only two Summer Olympic games were profitable since 1932? Yep. Two. They were Los Angeles in 1984 and Atlanta in 1996.

How did they do it? Well, I want you to keep in mind that both of these Olympics happened in the USA. These events happening in the USA is critical information and the reason for that will become more apparent later... 

But, for now, let's look at the first one; Los Angeles 1984:

From Wikipedia:

"Where ambitious construction for the 1976 games in Montreal and 1980 games in Moscow had saddled organizers with expenses greatly in excess of revenues, Los Angeles strictly controlled expenses by using existing facilities except a swim stadium and a velodrome that were paid for by corporate sponsors…. The 1984 Summer Olympics are often considered the most financially successful modern Olympics."

Also from All About History:

"...the 1984 Olympic Games saw, for the first time ever, corporate sponsors for the Games. In this first year, the Games had 43 companies who were licensed to sell "official" Olympic products. Allowing corporate sponsors caused the 1984 Olympic Games to be the first Games to turn a profit ($225 million) since 1932."

OK. Let's check that. The 1984 Olympic Games were profitable because of two things:

1) Use of existing facilities

2) Corporate sponsors

Now, let's look at the only other profitable Summer Olympics since 1932 (I don't really want to go into Winter Olympics because, actually, comparing, for example, Nagano 1998 with a Summer Olympics Game is unfair); the Winter Olympics are an extremely risky business as they are not nearly as popular with audiences as the Summer Games are. But let me use one example (again an Olympics in the USA):

From Yahoo:

"The Salt Lake City Winter Olympics was one of the most expensive of all time, coming close to the cost of hosting the summer Games, at A$1.8 billion (including A$470 million for security). However Organizers claimed a A$94 million profit as a result of lucrative television deals."

OK. Now we can see the third factor that builds a profitable Olympics: 

3) Television deals and the advertising that goes along with them.

So it is possible to make money from the Olympics. 

But, looking at this from a broadcaster in Japan perspective, I can now tell why, after researching these and dozens of other articles, I am even more convinced that the Tokyo 2020 games will lose money and become a massive tax burden on the Japanese economy. 

First let's compare apples to apples: Let's examine why the 1984 Olympic Games were profitable. They were profitable because of two things. First, as stated above, 1) Use of existing facilities

Well, Japan has already announced that they aren't going to do that. Please refer to: Tokyo’s winning 2020 Olympics bid will only worsen Japan’s debt headache:

"...The cost of Tokyo’s bid fell between $5 billion and $6 billion. That includes the construction of 11 new sporting venues and 10 temporary ones, at a cost of $3 billion. The Olympic village will cost another $1 billion, according to the IOC.

The Tokyo government projects that the Games will generate $30 billion in economic benefits for Japan—and that, it said, is a conservative estimate since it calculates only direct spending on the Olympics. One of the notions is that it will boost domestic consumption, helping wrest the country from a couple decades of debilitating deflation. 

So Tokyo’s victory basically is license for the Japanese government to spend like crazy on infrastructure. You can see why Shinzo Abe, Japan’s prime minister, put himself on the line to win the bid. An Olympics building bonanza is basically the second pillar of Abenomics—fiscal stimulus (the first is monetary policy; the third is structural reform)—on steroids...."

So, when speaking of out of control government spending, well, who can do that like the Japanese? Especially the current government. This does not bode well.

Now, let's look at the second factor of the Los Angeles Olympics that helped profitability:

2) Corporate sponsors

This is a mixed bag here. On the one hand, I can't really see Japan having too much trouble with Corporate sponsorships... Excepting two tiny little problems: Japan's economy is already a wreck and the on-going problems with Fukushima (bad advertising)...

Now that brings me to the final point that convinces me beyond the shadow of doubt that the Tokyo Olympics will lose money: 

3) Television deals and the advertising that goes along with them.

I now speak from experience and it is so obvious that I wonder why no one can see this... The biggest problem with Japan getting major TV contracts from the USA and the west? The same as it was during the Nagano Olympics and the 2002 World Cup (which lost Japan a few 10s of millions too).

CNN writes in "Is There a World Cup Economic Bounce?":

"The games in Japan -- which co-hosted with neighboring South Korea in 2002 -- continue to be an economic drag on the local communities. Why? Maintenance of the stadiums built for the games costs more than the revenues they bring in. 

Eight of the 10 stadiums built or renovated in Japan for the 2002 World Cup lose between $2 million and $6 million a year, the balance of which is picked up by Japanese taxpayers. "No strategy, no success," said Ichiro Hirose, a member of the 2002 World Cup Bidding Committee in Japan. "They did not have a strategy" for use of the stadiums after the games, he said."

CNN also adds that pesky little "existing facilities" point:

"The 1994 games in the U.S. generated a $60 million surplus from ticket sales, sponsorships and licensing agreements, said Alan Rothenberg, chairman and CEO of the 1994 World Cup. Since the tournament used existing stadiums, there wasn't a significant infrastructure legacy from it..."

But I digress. 

Here's a very simple reason why Television contracts will be sorely lacking for the Tokyo 2020 Olympics and that will impact corporate sponsorships, and there's not a thing Tokyo can do about it; the Internet and Time Zones.

That's right. Think about it, if you are some person who loves sports but live in massive TV markets like New York or Los Angeles, are you interested in waking up at 3 or 4 am to watch a live sports event from Japan?

I doubt that the average American will do so. And since the average person won't, then I suspect that major US (and European) stations might balk at paying high prices for rights to broadcast live when the audiences are all sleeping? And there's little reason to buy rebroadcast rights as the Internet will already tell everyone the result and, as everyone knows, if the sports aren't live, then what's the point?

Also, for all its warts, the USA is still, by far, the biggest economy in the world. Let's not forget that in our calculations. 

I think I've heard of this problem with TV happening before (I work in broadcasting!) It happened with the Olympics in Beijing; it happened in Nagano; it happened with the 2002 World Cup in Korea - Japan and, because there's no way to change the time zones, it's going to happen in Tokyo 2020.

And when TV doesn't broadcast these games live to an awake audience (the average viewer) then big sponsors aren't interested. 

When things like this happen, I think it makes people leery. Please refer to: NBC reports financial loss after Beijing Olympics, claims profit is on the way:

NBC, one of the largest American television networks, held the exclusive right to host the 2008 Summer Olympics Games coverage for the US. Despite generating over $1 billion in revenue from the Olympic coverage, NBC has reported a loss of undisclosed size in its third quarter. The network is still hopeful to come out with a profit at the end of the year, and claims its third quarter loss stems from the way Olympic revenues and expenses are booked by accountants. 

My guess is that the availability of free online Olympic content played a significant role in contributing to NBC's financial loss. 

So the question arises, will major TV networks keep investing a lot of money into Olympic coverage and compete with YouTube (and other popular participatory sites), when their Olympic profit margins are getting so thin or even negative? 

I bet "No!"

So, let's tally:

The three factors that made profitable Summer Olympics since 1984 were:

1) Use of existing facilities

2) Corporate sponsors

3) Television deals and the advertising that goes along with them.

*Japan has already announced massive new spending on new facilities 

*Corporate Sponsors? We're probably OK there... Just "OK."

*We are in bad shape in this area because of time zones and the Internet.

I don't see this turning out too well. I predict a hugely successful 2020 Tokyo Olympics... 

I also expect a massive hangover and a huge tax bill leftover to pay for it too. 

What do you think?

More? Read this: The Curse of the Olympics 

http://www.thedailybeast.com/articles/2013/09/07/the-curse-of-the-olympics.html

Tokyo Gets the 2020 Olympics... Unfortunately...

(This post will be either loved or hated by many people. This is just my opinion... One not  to be spoken loudly in public in the current atmosphere... Don't get mad at me about it. My opinion isn't going to change a thing. If it makes you mad, then perhaps it's because my points can't be denied?)

It was just announced this morning that Tokyo was awarded the 2020 Olympics... Egads! The worst result possible (for the people of Japan!) Congratulations to the "losers."

But don't get me wrong, I think the Olympics are OK... As long as the taxpayers don't get stuck with the bill.... But, for the life of me, with our current economic problems, I can't see how this is going to help. No. I only see it making things MUCH worse... Excepting for the "Bread and Circuses" part.

No, I'm not happy about it. One would have thought that because of stuff like Fukushima that Tokyo getting awarded the Olympics would have never happened in a million years... But it did. I guess Abenomics and throwing money around works! Of course, or as Homer Simpson would say, "Doh!"

The announcement was made this morning. Yahoo reports: Tokyo will host the 2020 Olympic games, beating out Istanbul and Madrid:

"...Both Istanbul and Tokyo offered notable steps forward for the Olympic experience. Istanbul would be the first time that a primarily Muslim country would host the Olympics, while Tokyo would be the first Asian city to host it twice. Tokyo last hosted the Games in 1964.  

Madrid had attempted three straight times to win the Games, but failed yet again despite a pitch for a "sensible, reliable and trustworthy" Olympics. Madrid officials noted that 80 percent of facilities which would have been used for the Games were already built and in use."

That last line is the telling one. "80 percent of all facilities... were already built and in use." Yeah. That kills Madrid. Why? Well, if shit doesn't need to be built then who is going to throw around all those juicy construction contracts (built on taxpayers money) to their buddies in big construction companies? Who will pocket the kick-backs? What well-connected individuals or privately run corporations will buy those facilities (built with public tax dollars) for no-bid contracts after the Olympics are over?

Yeah, in spite of all her problems, Japan still has a better economy than Istanbul and Abenomics guarantees a lot of (freshly printed) money will be thrown around... The Japanese taxpayer? They cheer and scream and bend over for more.

These people are so brainwashed that they think the Olympics coming to Tokyo is actually a good thing and that somehow, by magic, their lives have improved and they will make more money!?

People these days watch too much TV and are sorely lacking in the information and critical thinking department; they parrot what they are told on TV.

By the way, it's all just anecdotal evidence, but I asked dozens of Japanese people (you know, lowly workers and tax payers) if they wanted the Olympics. Not a single one of them said, "Yes."

"Oh, but the Olympics will be good for the economy!" Oh really? Tell another country that is deeply into corruption and kickbacks, Greece, about that one. This from the Daily Beast:

"Indeed, the $12 billion cost of hosting the Games contributed to the Greek economic collapse and left an abandoned Olympic Park, which has been overrun by weeds and graffiti artists."   

Yeah, but that's Greece. Japan is different, right? 

Nope. Japan should have learned her lesson a short 16 years ago. Please refer to Yahoo: Olympic Cities Booms and Busts?

Nagano, Japan (Winter 1998) Boom or Bust? Bust 

The full cost of the Nagano Winter Olympics will never be known as the documents accounting for money spent on the Olympic bid were burnt on the orders of the Olympic Committee vice-secretary general, Sumikazu Yamaguchi. (Emphasis mine) Yet it is clear that it went vastly over budget, with new infrastructure to make the Games work in this small Japanese city costing up to A$9.4 billion. As a result, Nagano fell into recession, with the debt on Olympic projects roughly A$28,000 per family and growing. It is estimated that these debts will take until 2015 to pay off. 

The Olympic venues alone cost A$20.6 million per year in upkeep, and their rental income brings only one-tenth of that amount. Although Nagano is working hard to stop the Olympic venues turning into rotting white elephants, the cost of their upkeep is not easy for the city's finances. Today it still costs A$2.3 million a year alone to maintain the M-Wave, where local school children take skating lessons on a high-speed 400-metre rink in winter. The installation of a high-speed bullet train during the Olympics also posed problems for the local hotel industry as more skiers came on day trips rather than spending the night and locals are more inclined to go on shopping days to larger cities. 

The Japanese government currently has the highest by-far debt to GDP ratio in the entire world... Current estimates have it at 245% of GDP and Japan's Vice Minister of Exchange Rates tell the Telegraph UK:

"A debt ratio of 245pc of GDP is not really safe, and it is not happening because we are investing," said Takehiko Nakao, Japan's 'Mr Yen' or vice finance minister in charge of the exchange rate. 

Mr Nakao said the scope for further fiscal stimulus is running out and the country must restore public finances to a sustainable path by the middle of the decade. "We can't continue to expect people to lend money to us," he told The Daily Telegraph. 

The comments touch on an acutely sensitive topic. A number of global hedge funds and banks have begun "shorting" Japan's debt, the world's biggest at $23 trillion."

Global Hedge Funds are now "shorting" Japan?... Now the Japanese government wants to print and borrow even more money to pay for an Olympics? (An Olympics that, by the way, will have to be paid back from the taxpayers and through destruction of the buying power of the currency through printing and inflation... Gasoline is already at it's highest price in years!)

Testoterone Pit sums it up in: Abenomics Wins: Budget And Inflation Both Jump (Over The Cliff) 

It would be ridiculous if it weren’t so sad: Facing exploding budget deficits and an uncircumnavigable mountain of debt over twice the size of the economy – Japan’s two largest economic problems – the government in its blind devotion to the religion of Abenomics screams, “Damn the torpedoes, full speed ahead.” 

The new budget requests from government ministries for the next fiscal year, which starts April 2014, total over ¥100 trillion. This includes the special account for reconstruction. The ¥99.2 trillion (over $1 trillion) for all other expenses, the mostest ever, is up a breath-taking 7.1% from the current budget of ¥92.6 trillion. And then there is even more that hasn’t been specified yet. 

While Abenomics has promised to stimulate the economy, it is certainly stimulating Japan’s most destructive problem, the deficit. So the ministries added ¥3.5 trillion to be handed out to Japan Inc., on top of the money it’s already getting, to promote growth (of the deficit). The Ministry of Finance threw its own goodies into the basket: ¥25.3 trillion ($257 billion!) in costs to service Japan’s national debt of over ¥1 quadrillion. A jump of 13.7% from the pile set aside for the current fiscal year."

Read more on the government plan to destroy the currency and thereby jumping inflation here: 
http://www.testosteronepit.com/home/2013/8/30/abenomics-wins-budget-and-inflation-both-jump-over-the-cliff.html

Yeah, and one last thing, about that "reconstruction issue" that Abe and his cronies pay so much lip service to... Has anyone seen the areas around Fukushima Dai-ichi and the areas that were destroyed by the March 11, 2011 earthquake and tsunami disaster recently? Nope? 

I did. Just last week...

Guess what? It still looks basically like what it did two years ago right after the disaster... Thousands of cars and trucks are still sitting out in open fields... Entire towns and small cities are smashed and still shuttered.... 

There doesn't seem to be a single person there who is happy with the pace of reconstruction (whether they are pro-nuclear power or anti-nuclear power)...

And now Abe and Japan are going to print up a bunch of money, increase the national debt, throw it all on the taxpayers to build new sports gyms and hotels in..... Tokyo?

Now, mind you, I am not pro-government spending for any construction projects at all, anywhere... But I am not in the government who, by the way, takes every opportunity it gets - when makes excuses for the sales tax increase - to pull emotional strings of the public concerning the March 11 disaster by mentioning "money needs to be set out for reconstruction" (of the earthquake/tsunami disaster zones). Nope. 

They say it. I didn't. I don't.

I'm wondering where the priorities lie for the supposed "leadership" of this nation? But, of course, why do I wonder? Their priorities lay where they always have been: Buttering the hands of their political friends and allies. Where else?

Never forget that the Olympics are a privately run business, when they profit, they keep the profits... When they lose money, the local governments socialize the losses and put them on the backs of the taxpayers.

This isn't going to last very much longer...

No modern Olympics games has ever made any money:

Watch the video:

Ultimately, the message is: The Japanese debt is 245% of GDP. That means that YOU (Mr. and Mrs. Japan),  working people, will be at $140,000.00 (USD) in debt by 2016 continuing today's rate. (That's about ¥13,972,010.33 per person!) We cannot afford to increase debt in this country. The Olympics are fine, but I think you had better to fight to make sure that the government doesn't spend YOUR money on fat projects and then YOU have to pay the bill later! This is why I wrote this post. Everyone can be all happy about the Olympics, but they had better to understand what this means. Adding debt (like Nagano - which added ¥3,000,000 in debt to every man, woman and child and baby in Nagano and is still increasing today). Is something you had better tell your political leaders you don't want.

Olympics! Sex! Scandals! Bribery! Geishas and Sushi! Burning Books and Nazis! This Post Has it All!

Bread and Circuses: Olympic Games are a Scam to Take Yours and Your Children's Money Away!

Read and watch this one about how the 2002 World Cup cost - and is still costing - Japanese taxpayers millions: Is there a World Cup economic bounce?
http://edition.cnn.com/2010/BUSINESS/06/11/business.bounce.world.cup/index.html 

Japanese Government Incompetent Resigns Over Abusive Remarks to Disaster Area Officials

Hot on the heels of my last two posts, the first entitled; Tax and Spend, Tax and Spend, Tax and Spend, Lather, Rinse, Repeat followed by Nuclear Radiation: No News is Good News  blasting the government of Japan (all government for that matter) for gross incompetence (among others things) another scandal hits the news.

Duh!

It seems that the boss of the newly created March 11 disaster reconstruction team, Ryu Matsumoto, that was just formed by soon-to-be ex-prime minister Naoto Kan has gone and done something really stupid within the very first week on duty. Matsumoto went up to some earthquake and tsunami ravaged areas in Northern Japan and was talking down and being extremely rude to local officials there. Now, after catching some serious backlash, the guy has been forced into resignation.


What a doofus! 

FOR FULL COMEDIC EFFECT, CLICK ON

THIS VIDEO BEFORE YOU CONTINUE READING

This is hilarious. You just can't make this stuff up. A total and complete comedy of errors.


Yahoo Japan reports:

TOKYO – Japan's embattled government received a fresh blow Tuesday when the new disaster reconstruction minister resigned a week after his appointment because of criticism he was rude to officials on a trip to the tsunami-ravaged coast.

Hint: Japan. Rude. No.

The teary-eyed minister, Ryu Matsumoto, apologized and stepped down after a weekend trip in which he berated a local governor for being late to a meeting and threatened to withhold aid.

The guy was teary eyed? Bwa! Ha! Ha! 

Prime Minister Naoto Kan, who created the new Cabinet position last week, had hoped it would help fend off critics who have questioned his leadership in the wake of the March 11 earthquake and tsunami that wiped out much of the country's northeast coast.

Oh, this episode is really going to help out Kan. Dear Mr. Prime Minister, who hired this Matsumoto guy?

Kan has been under intense pressure to step down himself, but has said he will do so only after putting Japan on a solid recovery path. 

He will resign after "putting Japan on a solid recovery path"? Like how he's handled the debt problem and the immediate aftermath of the earthquake and tsunami? That means never.

Seriously, folks. I haven't laughed this hard in a loooooong time.

His government faces deep rifts in the ruling party and an increasingly emboldened opposition, which has denounced his response as dithering and poorly coordinated.

Poorly coordinated? Nah! Rubbish! I won't have it!

Matsumoto's brief performance is unlikely to help.

It may have been brief but it was a damned good show while it lasted.

In meetings with local governors over the weekend, the minister's words were regarded as arrogant and uncaring, angering local residents and political opponents. He told the governor of Iwate, one of the hardest-hit prefectures, that the government would not help municipalities that did not have good ideas about rebuilding.

Ah! Now we're getting to the nitty gritty. This idiot Matsumoto told the governor of Iwate that the government would not help unless the municipalities had good ideas? Yes. I see. Translation: "Yeah. We don't have a fricking clue as to what we're doing so someone has got to have a good idea. How about you guys?"

Gee, come to think of it, this is a representative of the same government who claims that they need to raise Sales Tax to pay for reconstruction of northern Japan! No one said that the people of northern Japan had to score at least 80% on a multiple choice quiz before they got the money!

To Miyagi Gov. Yoshihiro Murai, Matsumoto expressed irritation that he was made to wait for the tardy governor. Matsumoto refused to shake Murai's hand when he entered the room and scolded the visibly surprised governor.

Maybe Murai was late as the roads are all shot and the trains all fell off a cliff during the earthquake or something.

"When a guest comes to visit, do not call up the guest until you have arrived in the room," he told Murai. "Do you understand?"

Oh! Goody! He even yells at the people who were victimized by the earthquake, tsunami and nuclear disaster! I hope he steeped on their feet, farted and slammed the door on their butts on the way out too!

He then warned journalists in the room not to report his words. 

He then warned the journalists not to repeat his words!? Sensational! This is funny! Is this the same guy who was teary eyed when he resigned? Is this guy for real?

However, they were widely reported in the media, and a video of the exchange was posted on the Internet.

Oh! Juicy! Where's this video? I gotta see this... Oh lucky me! Here it is:

Pardon my French, ladies and gentlemen, but what an asshole this guy is. It may not sound like he is being rude because Japanese is such a very polite language, but if that we me on the receiving end, I'd probably tell this jerk to "get out!" What an arrogant worm!

Jin Sato, the outspoken mayor of badly damaged Minami Sanriku, said the minister's comments deeply upset disaster victims already frustrated with the recovery process.

Think so? Nah!

"I have been saying all along that this government has no sense of speed," he said on public broadcaster NHK. "My frank opinion is that this resignation drama is another misstep."

I'm beginning to think that this Naoto Kan guy is the best prime minister we've had since Mori. The mistakes these people make are hilarious and they give me a good hearty laugh every morning. Seriously, folks, this is unbelievable.

I'm going to be sorry to see Kan go. That guy and his posse make great  entertainment.