‘Hard to believe’ Olympics would cancel due to COVID-19
Irwin A. Kishner, co-chair of Herrick's Sports Law Group, was interviewed on Yahoo! Finance about the potential of a pandemic-related cancellation on the Olympic games, and the financial implications for broadcast companies.
Kishner explained that "there are billions of dollars and years of planning that go into sponsoring and holding the Olympics. Obviously, most of the costs relative to infrastructure has already been incurred by the government, mostly by the government, whether regional or local or national in the case of Japan. And that's billions of dollars. That said, there are many other revenue streams that we need to consider. A cancellation would affect a tremendous amount of those."
"Obviously, you have the TV revenues. You have ticket revenues. You have insurance claims that will undoubtedly be made for event cancellation, just to name some of those. So there's billions of dollars at stake, should there be a cancellation, though I must say, based on everything that I understand and see right now, I would find that hard to believe or would even be a remote possibility at this moment."
Kishner remarked that the we are in the midst of a "revolution" with respect to coverage of live sports and how people consume the content, whether it be through streaming or traditional television. He affirmed that "the most valuable programming of all is sports programming," further noting, "[i]t's live action. It garners the most interest. And the Olympics are at the top of that proverbial pyramid."
As for the 2021 Olympics, Kishner remained optimistic about the interest the games will generate stating: "Even if there's lack of attendance, even if they are not getting as much ticket revenue as maybe that was anticipated, I do believe these games are going to go off well. I do believe they're going to go off COVID safe or friendly, as much as you can do that. And I ultimately predict a successful 2021 Olympic games."
Kishner concluded with a discussion of the protections placed in broadcast contracts including the placement of a "pandemic clause" and the contractual balance of power.