What the Uncertainty Surrounding the 2021 Games Means for Everyone Involved

As the world turned the page on a tumultuous and unpredictable 2020, we were welcomed by a 2021 equipped with slightly more certainty, but many remaining unknowns.  The return of major professional leagues has proved out a model for the successful execution of large-scale sports, but none the size and scale of the Olympic and Paralympic Games. A typical Summer Games can host over 11,000 athletes and more than 5 million ticketed fans from 200+ countries.

The Japanese Government, Local Organizing Committee, International Olympic Committee (IOC), and International Paralympic Committee (IPC) have remained firm in stating that the Games will happen.  However, the unpredictability of how they will occur has captured the attention of many in the sporting world.  As organizers, athletes, sponsors, and fans prepare for an unprecedented Games’ cycle, Lumency has taken a closer examination of the pandemic’s impact on each of these groups, and how COVID may affect both this and future Games.

Organizers

While the mandate of the local organizing committee, IOC and IPC has focused on ensuring the Tokyo Games go forward, they must balance this with the health, safety, and security of participants.  With the sharp rise in Japan’s case numbers, including a state of emergency being declared in Tokyo on January 8th, organizers are facing yet another wave of setbacks.  In January, the Olympic and Paralympic Torch displays were removed from their public viewing.  Meanwhile, the IOC is trying to ensure that athletes are vaccinated prior to arriving in Tokyo, adding more complexity for the host nation and participating countries. 

These challenges continue amid rising costs.  Over the past 15 years, the average cost of hosting the Games has ballooned to an average of almost $9 billion (USD).  The postponement of the Games from 2020 has positioned Tokyo to become the most expensive Summer Games on record.  The event’s official budget is up 22% over forecast to $15.4 billion (USD) – driven by the initial postponement, coupled with enhanced COVID-safety measures for the upcoming Games. 

In late September 2020, the organizing committee and IOC released over 50 measures to make the Games work in a post-COVID-19 world, including a focus on maximizing cost savings and increasing the efficiency of the Games delivery.  Measures included “the reduction of stakeholder personnel attending the Games, streamlining transport services, adjusting spectator activities at competition venues and hosting a number of pre-Games meetings online”.  While the Tokyo Model has been designed to deliver a successful 2021 Games, it is also a blueprint that will benefit future Games and other global sporting events, by simplifying operations and creating efficiencies for host nations.

Athletes

No group has felt the emotional toll of the Games postponement more than the 11,090 Olympic athletes and 4,400 Paralympic athletes that were scheduled to participate in the Tokyo 2020 Games.  The initial postponement was greeted with both a sense of relief and disappointment.  For some that had trained so hard in the leadup, the delay meant a loss of opportunity, while for others, it has simply been a shift in timing. 

The continued uncertainty and restrictions brought forth by COVID-19 has wreaked havoc on training and competition schedules, including the conditions under which these activities happen.  Olympians and Paralympians typically base their training on four-year cycles, building toward their peak at the Games.  The year after a Games is typically reserved to rest and retool before starting a new cycle.  A one-year delay has meant that athletes who were priming for last summer must now recalibrate to reach top performance a full year later.  With underlying fears of a Games cancellation still lingering, experts say athletes’ cognitive assumptions have also been disrupted, challenging their motivation, drive and focus.  

While the impact of the postponement on performance remains to be seen, the pandemic has put athletes through the ultimate test, introducing new models for training, competition, and mental preparation.  After the postponement of 2020 and amid the current state of affairs, the strength, determination, and performance of the athletes are set to take on an even greater meaning in 2021.

Sponsors

The end of 2020 brought forth some positive news for the Tokyo Games rightsholders, with all 68 domestic sponsors agreeing to renew their contracts for the postponed 2021 Games.  Prior to these renewals, domestic sponsors had already contributed $3.3 billion (USD) in funding, more than twice as much corporate funding as any previous games.

Partners have stepped up across the board, finding new ways to leverage their commitment by extending their support of athletes, helping communities, and assisting with COVID-relief efforts.  Historically, Olympic and Paralympic sponsorship activity is concentrated within the 100-days preceding the Opening Ceremonies, as consumers shift their collective attention towards the Games.  With the previous postponement of the Games taking place around that milestone, brands were forced to quickly pivot their strategies, finding ways to leverage the emotional weight of the Games to serve as a force for good, and, in some cases, taking already produced creative to shift strategies to match the new environment.

Across the board, sponsors quickly rallied behind athletes to demonstrate their continued support for the Games.  Airbnb supported athletes via the creation of unique Olympian and Paralympian experiences – an online platform that allowed athletes to share their passion, connect with fans, and earn an income during the pandemic.  Lumency client, Toyota tapped into its global roster of Team Toyota athletes to inspire fans by sharing stories of coping and resilience in a series titled What Moves Me, while donating vehicles and production facility capacity towards COVID-relief efforts in the Greater Tokyo Area.  Lastly, Visa repositioned its 80%-produced campaign to launch the Do Your Part Like an Olympian public service campaign with its Olympic athletes that encouraged people to stay home and practice good hygiene.

In the coming months, partner brands must straddle the line of finding ways to activate their substantial rights fee investment while balancing the uncertainty of the Games’ status and delivery.  Campaigns must be designed with a heavy contingency-based focus, including a “Games-on” versus “Games-off” pendulum that could change the tone, thematic and overall sensibility of programming.  Activations must be cognizant of the ongoing pandemic, while simultaneously finding ways to celebrate the Olympic and Paralympic spirit.  With the presence of on-site attendees remaining in limbo, an even greater emphasis will be placed on digital and remote engagement to supplement the typically heavy “on-the-ground” activations.

Perhaps, most significantly, the pandemic has shifted many brands’ thinking about their Olympic and Paralympic strategies towards being an always-on platform, as opposed to a tent-pole event that hits every two years. The consistency of activation could provide a new recipe for sweating the association with greater proclivity in the years to come, widening the halo period during which brand attribution and equity is strengthened. 

Fans

Outside of the FIFA World Cup, no sports spectacle captures the collective interest of fans and non-fans like the Olympic Games.  The Games’ initial postponement was both disappointing, yet unsurprising to most fans, with most other major sports leagues already having shuttered their doors, and the logistical complexity of the Games presenting an even greater challenge. 

Tokyo 2021 fan engagement and viewership will be up against the same test that other professional sports leagues have faced.  As we saw this past summer, the return of live sports yielded mixed results among the NBA, MLB and NHL.  An oversaturation of sports content in the market, a change in consumer viewing habits, and behavioral adjustments (i.e., habits and daily routines) have been flagged as the likely suspects for these outcomes.

Needless to say, the Olympics is on a level of its own – one that transcends sport and brings the world together to celebrate human achievement.  A recent study from sponsorship research firm, IMI International, indicates that there is a significant pent-up demand for live events with the Olympics ranking in the top 10 sporting events that consumers are looking forward to in 2021.   As we get nearer to the Games, Lumency expects that this anticipation will only increase.

The road to Tokyo 2021 has already been an exhilarating and exhausting ride, with the feeling that there is much more to come before we even hit the Opening Ceremonies.  With so much on the line, and the collective effort of so many working to make it happen, the Lumency Team is closely monitoring the action-packed Road to Tokyo to project how it will all unfold. 

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What the Uncertainty Surrounding the 2021 Games Means for Everyone Involved