Coronavirus threatening 2020 Olympics

The Summer Olympics is a highly anticipated event, revered by adoring fans all over the world.  We've all heard the rumors that the coronavirus is threatening this year's 2020 Tokyo Summer Olympics, and it is heartbreaking to think that the world might miss out on this incredible, universally inspiring event.  While there are many impacted parties, ranging from the athletes to the fans, it is interesting to consider the economic impact of potentially missing this important marketing opportunity that only occurs once every four years.  

NBC Universal, who has exclusive broadcast rights for the Olympics coverage here in the US, has already sold $1.25Bn of advertising space for the 2020 Tokyo Olympics.  In the midst of the coronavirus epidemic, the marketing world is wondering what will happen if the games are cancelled or postponed.   An article in the New York Times summarizes the predicament faced by NBC, who has already obtained commitments for 90% of its advertising space for the most-watched sporting event globally.  "In most circumstances, companies pay for Olympics ads after they appear. If the Games are canceled, or continue with fewer nations competing and lower ratings, NBCUniversal may be required to release companies from their ad commitments or otherwise compensate them."  A cancellation of the 2020 Olympics would have serious financial consequences for NBC, who might be left footing the bill for lost advertising spend. 

Although everyone involved with the 2020 Olympics is proceeding business as usual, NBC and their advertising clients are undoubtedly wrestling through worst case scenario planning as well.  But the situation contains much uncertainty.  According to the Times, "If the Tokyo Olympics are canceled, insurance is likely to cover losses related to broadcast rights and production through a claim that the coronavirus was an act of God. But it is not clear if it would protect NBCUniversal if Olympics-themed commercials and promotional tie-ins were scrapped."  

The Olympics have been threatened before -- Zika and Ebola come to mind -- yet the Games somehow always manage to take place against the odds.  Hopefully this year will be no different.