Olympics will ban spectators after Japan declares state of emergency

Olympics organizers are banning all spectators from the games this year after Japan declared a state of emergency that’s meant to curb a wave of new Covid-19 infections, Reuters reported Thursday.

It’s the latest setback for the Summer Olympics that have already been delayed for a year and racked up high costs for postponement. The state of emergency will begin July 12 and run through Aug. 22, while the Games are scheduled from July 23 to Aug. 8.

Organizers had already banned international viewers from attending and set a cap on domestic viewers at 50% of capacity, or up to 10,000 people.

There’s immense pressure to curb the spread of the virus at the Games, protecting both athletes and neighboring regions. More than 11,000 competitors are expected to travel to Japan to compete, along with thousands of officials and staff also set to attend.

Nationwide, Japan has reported about 811,000 coronavirus cases and more than 14,800 deaths, according to data from the World Health Organization. However, the nation has faced a relatively slow rollout of the vaccine. Only about a quarter of the population has had at least one COVID-19 shot, according to Reuters.

Adjusting to no fans

NBCUniversal, the parent company of CNBC, plans to show more than 7,000 hours of content from the Tokyo Olympics across its networks and streaming platforms. Now NBC will have to grapple with whether viewers notice the difference without spectators.

Sports properties around the world adjusted during the pandemic with no fans, and often used digital seats to display some form of attendance. U.S. pro leagues including the National Football League and Major League Baseball also incorporated artificial sound in broadcasts to mimic crowd noise.

It’s challenging to keep viewers engaged in sports broadcasts without spectators, so NBC could use the technology to enhance production. In 2014, the media giant and the International Olympic Committee agreed to a $7.75 billion media rights deal to extend their partnership. The current agreement runs through the 2032.

Still, an Olympics without fans will destroy ticket revenue for the IOC. More than six million tickets were sold for 2016 Rio Games, bringing in roughly $1.2 billion, according to an IOC annual report.

Because of the delays, the Games’ budget has already jumped to an estimated $15.4 billion, according to Reuters, and ticket revenues of about $815 million will likely fall to near zero.

Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.