Fox, ESPN Expected to Join Field of Bidders for ’14, ’16 Olympics
With two months to go before the Summer Olympic Games in Beijing, studios already are crunching numbers in preparation for bidding for the 2014 Winter Olympics in Sochi, Russia, and the 2016 Summer Olympics. That process is expected to be completed within the next year.
The question is, how much are the Games actually worth? Already NBC has secured sponsorships that will drive advertising revenues north of $1 billion well before Beijing’s Aug. 8 Opening Ceremonies.
Studio sources said the International Olympic Committee probably will receive a hefty hike in the price of rights to the Games to around $2.25 billion from the $2 billion NBC paid to air the 2010 and 2012 Olympics.
Fox, which was a player in the previous bidding, will be kicking the tires, and insiders expect ESPN to be a driving force, win or lose, in the final price to air the event. Sources at both companies confirmed the studios are interested and will be involved in the bidding.
Of course, NBC, which would have aired the Olympics seven times in a row, still remains the frontrunner to retain rights to the event, according to those same studio sources.
Complicating matters is that the IOC has not selected a location for the 2016 Games, with time-zone-friendly locales such as Chicago and Rio de Janeiro up against exotic locations such as Qatar and Baku, the capital of Azerbaijan.
NBC has reached more than 80% of its advertising goal of $1.2 billion for the 2008 Summer Games, and will present more than 3,600 hours of coverage of the Beijing Games, more than the combined total of every Summer Olympics ever televised in the U.S. That breaks down to a total of 212 hours of Olympics a day, triple the coverage of the Athens Games in 2004 and 20 times the amount from Atlanta in 1996. CBS offered 13 hours of coverage starting with the 1960 Winter Games from Squaw Valley, Calif., with 20 hours of coverage from the Summer Games in Rome that year, when the Olympics first found a home on U.S. network television.
Last week, studio sources said the company sold another $15 million of ad time for the games and expects another $25 million worth of business to close next week with advertisers from the movie, pharmaceutical, retail and automotive aftermarket. Already on board are Coca-Cola, McDonald’s, AT&T, Anheuser-Busch, General Motors, Visa, Bank of America, Johnson & Johnson, Nike, Hilton Hotels, Procter & Gamble, Kraft, Subway and Target, according to insiders.
“We are north of 80% sold out and we are on pace to break records for the Olympics,” said Brian Walker, senior director of corporate communications at NBC Sports.
Of course, should the Olympics take a freefall in the ratings this summer, that would likely affect the final price of the rights. Ratings for the Olympics have dropped over the past couple of decades, depending on the location of the competitions. Naturally, recent Games in Salt Lake City and Atlanta fared better with audiences than those in Nagano and Sydney.
In a recent interview with TelevisionWeek, Dick Ebersol, chairman of NBC Universal Sports & Olympics, noted that Beijing Games coverage during the average night in prime time would be “75% live” and that the more popular events, including swimming and gymnastics, would be live for U.S. audiences, which would bolster audience numbers. That said, it remains to be seen how much the expected Chinese political protests will affect final Nielsen numbers, if at all.
A source at ESPN noted that the company intends to submit a proposal to the IOC, but will evaluate what makes economic sense to ensure the company gains appropriate value. He said part of that involves ESPN acquiring broader rights to the Games than traditional TV deals have involved. (This summer’s Games are the first to be covered live online, making them a testing ground to determine the value of digital rights.)
In addition, the ESPN source said the company would showcase its ability to not only partner with its multiple platforms and networks, but also reach out through the Walt Disney Co. to kids around the world to “win over” a new generation of fans.
Fox, meanwhile, also boasts strong international channels as well as broadcast networks Fox Broadcasting and MyNetworkTV and a bevy of local cable sports outlets where it could air the Games. The company has been a strong player in recent years in acquiring major events for its broadcast lineup.
Representatives for Fox Sports and ESPN would not comment on their company’s interests in the Olympics.
(Updated quote from Brian Walker)