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Last week,Japan’s politically shy corporate titans began speaking up. Toyota,an Olympic sponsor,said it was concerned about rising public animosity towards the Games. SoftBank said it was “afraid of having the Olympics”. Rakuten,Japan’s Amazon,said it was a “suicide mission”.
Then on Tuesday,the Tokyo peak body representing 6000 primary care doctors called for the Games to be called off,warning hospitals were already at capacity.
Suga says his hands are tied. “The IOC has the authority to decide,” he said in April. “And the IOC has already decided to hold the Tokyo Olympics.”
Athletes,for their part,have been asked to sign off onan Olympics playbook that declares they are participating at their own risk.
The options for Tokyo and the Japanese government are stark. Unilaterally cancelling the contract by withholding the IOC’s access to venues,for example,would put it in breach of the contract and leave it liable for damages. It is already estimated to have spent more than $28.7 billion according toJapan’s National Audit Board,a 200 per cent blowout on the initial $9.7 billion budget (Sydney 2000 cost $9.3 billion in today’s dollars after adjusting for inflation). Many of Tokyo’s costs have already been sunk into facilities and services,but a cancellation could leave them saddled with the bill for broadcast fees and sponsors revenue.
The IOC has taken out insurance against the Olympics being cancelled since 1980 but if Tokyo were to cancel the contract,the insurance companies could make claims against the local government to recoup billions in damages.
The local organising committee and Tokyo government have taken out their own insurance policies but the terms are confidential. It is also unclear if they account for a pandemic-driven cancellation,particularly after the Games were postponed and they went from an insurable unknown in 2020 to a known public health crisis in 2021.
“The provisions of the contracts with the insurance companies are vital,” said Alexandre Miguel Mestre,a European competition and sports lawyer from Abreu Advogados in Portugal.
“The interpretation of the event’s cancellation due to a force majeure situation and subsequent duty of payment of related damages is decisive.”
The sums at stake - more than $3 billion in broadcasting rights alone - mean that insurance claims are likely to be bitterly contested both by the insurers of the IOC and the local government,but also separately by the insurers of the individual sponsors,TV networks and other related commercial partners.
Legal experts say the most likely path to cancellation is a mediation between the IOC,Tokyo and the Japanese government. This would allow the IOC to claim the insurance on the basis that it can cancel the Olympics if it feels the safety of the athletes “would be seriously threatened or jeopardised for any reason whatsoever”.
“That will then resolve through insurance and not litigation,” said Jack Anderson,a professor of sports law at the University of Melbourne. It would also avoid the public relations disaster of the IOC suing a host city.
But internally,despite morethan 80 per cent of the Japanese public being opposed to the Games,and rising corporate and medical concern,the IOC,the Tokyo and the Japanese governments appear determined to press on.
Suga went further on Thursday,tying the Olympics to Japan’s international prestige and the global economic recovery from COVID-19.
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“Japan is determined to lead a strong recovery of Asia,which is a growth centre of the world by overcoming the many difficulties that stand in our way,” Suga reassured world leaders at Nikkei’s Future of Asia forum.
Anderson said that opens up an ominous pathway. “The nightmare scenario for everyone is that it begins and a bit likethe Indian Premier League, there is a spike in infections and it just has to be abandoned,” he said.
“That puts a huge pressure on the International Olympic Committee because it would make public health and the law a lot more complex.”
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