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NBC TAKES A DOUBLE DIP -- PART II: FINANCIAL HIT OR MISS?
Published August 8, 1995
NBC Sports President Dick Ebersol said yesterday that the network expects to break even or make money on the deal, but Goldman and Simmons report in this morning's WALL STREET JOURNAL that network rivals "expressed skepticism privately that NBC will ever recoup its record investment." However, Jerome Dominus, Dir of National Broadcast at J. Walter Thompson was more optimistic: "Every time someone bids a record amount, everyone says they won't make money, and you know what? They do" (WALL STREET JOURNAL, 8/8). In this morning's N.Y. POST, Greppi and Tharp write that "experts believe NBC won't win any medals" with the deal. Chicago-based sports marketing consultant David Burns: "Unless NBC can promote the games enough to raise more public interest, they made a bad investment." However, Jon Mandel, Sr VP/National Broadcast at Grey Advertising said experts will not know "for five years" whether NBC overbid (N.Y. POST, 8/8). Maggie Urry reports in this morning's FINANCIAL TIMES that industry estimates say "NBC would need to attract as much as $1.7bn from the two events to break even" (FINANCIAL TIMES, 8/8). Ex-CBS Sports President Neal Pilson, Founder of Pilson Communications, said profit is an "irrelevant issue." Pilson: "The issue now is whether the prestige and value of the games is sufficient to what the network gets out of them" (USA TODAY, 8/8). NBC's Wright cited NBC's profitable deal with the NBA, of which the network had tripled CBS' previous deal, when asked if the deal was prudent (BOSTON GLOBE, 8/8). MUST SEE TV: John Mansell, an analyst for Paul Kagen Associates, told the Baltimore SUN "NBC's move was as much to raise the profile of the two cable channels, which likely will carry more than 100 hours each of coverage from both games." The SUN's Milton Kent notes that because the Sydney Games will take place in mid-September, "numbers of viewers will be higher. And the Games fall during the start of the fall television season, so viewers should expect to see scads of promos for new NBC shows" (Baltimore SUN, 8/8). The weekly Olympic-themed show agreed to in the deal is expected to be shown on CNBC (WASHINGTON POST, 8/8). ATLANTA REACTION: Reaction in this morning's ATLANTA CONSTITUTION centered upon the "breathtaking" $705M fee paid to Sydney in the wake of Atlanta's $456M deal. Melissa Turner writes that yesterday's deal "only confirms the long-held belief that Atlanta organizers may have been forced to accept too little" for the '96 Games. IOC negotiator Dick Pound said yesterday that if Atlanta officials were not so pressed for cash to finance construction projects they could have received at least $50M more. Turner notes that "at ACOG's insistence, the IOC went to market with Atlanta's broadcast rights in July 1993 in the midst of a dreadful business climate for television sports." Turner, noting that analysts in '93 said NBC's bid was "foolhardy," and would never be made up in ad revenue, writes that "from NBC's perspective, the Atlanta Games have all the signs of a steal." NBC already passed its break-even target of $600M in ad sales (ATLANTA CONSTITUTION, 8/8).