NBC Counting On Better Times In Beijing

Apr 17, 2006  •  Post A Comment

Next time will be better.

That’s the message NBC Universal parent General Electric was sending to investors last week after revealing that NBCU’s coverage of the Winter Olympics in February in Turin, Italy, lost $70 million in the first quarter, compounding problems arising from NBC’s prime-time ratings weakness.

The pitch went something like this: Sure, the games lost money in the first quarter, but the network expects the coverage of the games to be slightly profitable for the full year, in large part due to nonrefundable contributions that local NBC affiliates are expected to make to the network this year. What’s more, coverage of the 2008 Summer Games in Beijing is where the real money will be made.

Speaking during a conference call to discuss GE’s first-quarter earnings, GE Chairman and CEO Jeffrey Immelt said that the games in China represent “the Big Magilla” and could generate between $800 million and $1 billion in revenue for NBCU and GE, thanks both to expected strong viewer interest and to opportunities for other businesses in the GE empire to participate in providing services and building infrastructure for the games.

That compares with the Games in Turin, which Mr. Immelt described as a “tough venue.”

According to Nielsen Media Research, NBC’s prime-time coverage of the Games averaged 20.2 million viewers, down 37 percent from the 2002 Winter Games in Salt Lake City. In the coveted adults 18 to 49 demographic the decline was 45 percent, with reality series such as “American Idol” on Fox or “Dancing With the Stars” on ABC beating NBC on a number of occasions.

Though Turin produced $684 million in advertising revenue, a big driver of the 24 percent jump in NBCU’s overall first-quarter revenue to $4.5 billion, it was also a factor behind the 8 percent decline in NBCU’s segment profit to $654 million.

GE, meanwhile, reported a 9 percent gain in first-quarter profit of $4.3 billion on a 10 percent jump in revenue to $37.8 billion.