NBC’s Gold Wins Olympics

Jun 9, 2003  •  Post A Comment

NBC has won the American media rights to the 2010 and 2012 Olympics with a bid that adds up to more than $2.2 billion. That represents an increase of some 47 percent over the $1.5 billion pre-emptive deal with which NBC secured the U.S. rights to the three Olympic Games through 2008.
There was no immediate word on how the Games might play out on GE-owned broadcast, cable, broadband and Internet properties, but NBC already has sketched out plans for the Summer 2004 Games in Athens that ensure Olympics presence 24 hours a day by using, in addition to the NBC Network, MSNBC, CNBC and Telemundo.
NBC Television Network Group President Randy Falco said the first-time inclusion in the Olympics rights package of such elements as broadband are “added value” to NBC.
Other elements of the deal include the development by NBC of a digital TV library and archiving system for an estimated $10 million. Under the deal, GE will be a sponsor of the Games.
NBC Olympics and Sports Chairman Dick Ebersol said, “The figures we used in calculating this bid were conservative. That number was the limit to which we were willing to go.” He also said it takes into account such items as affiliate contributions.
“We are very happy with what we got,” said IOC President Jacques Rogge, who refused to reveal anything about the competing bids submitted Thursday and Friday by ABC and Fox.
Mr. Ebersol also announced that before heading to IOC headquarters in Lausanne, Switzerland, NBC made a deal with multimedia giant Clear Channel for heavy promotion through its radio, outdoor and concert units.
“We are going to be doing an awful lot of things with Clear Channel,” Mr. Ebersol said.
Although many have doubted the likelihood that the IOC would get the $2 billion it sought because of economic, security and other concerns-such as where those two Games will be held-Mr, Ebersol declared: “The Olympics are good business and, more importantly, much more than a sporting event” because it is a big event that attracts the entire family to the TV.
Industry sources pegged the bid from Fox at well under $2 billion. Fox would not comment, but Fox Sports Chairman David Hill issued a general statement From Lausanne that read: “Given the difficulty to predict the economy in seven months, let alone seven years, Fox submitted a bid to the IOC for the games of 2010 and 2012 which we believed was fiscally prudent. We spent a lot of time working on various financial models, and given the unknowns-location and long-term economic outlook- our bid reflected a conservative view. The model could only be based on current network economics based on potential advertising revenue. The other areas of potential revenue, such as PPV, VOD, Internet streaming, etc., are all exciting future prospects, but unfortunately those revenue streams are way too theoretical at present to be figured into any solid fiscal model. Hence, the bid reflected a very traditional network approach.”
ABC-ESPN would not respond to reports that its bid was somewhere between those of Fox and NBC. Again, there was only a statement: “We made an attractive offer and would have loved to have reached an agreement under the terms we proposed. We wish the IOC and NBC well.”
CBS had announced last week that it was dropping out of the bidding because of uncertainties, the high cost and the fact it already has a sizable sports lineup on the air.