SBD/June 6, 2011/Media

Fox Says It Wants Next Four Games As Bidding For U.S. Olympic Rights Begins

The networks will vie for the U.S. Olympic rights today and tomorrow at the IOC HQs
Fox Sports Media Group Chair & CEO David Hill said the network wants to buy the rights to four Olympic Games, not just two. Hill, who made the comments today after Fox’ presentation to the IOC in Lausanne, Switzerland, said having the rights to the ’14, ’16, ’18 and ’20 games would be easier to “amortize” the production costs associated with covering an Olympics. Hill: “It’s simpler. … You have to make a major investment in technical hardware, which is (a capital expense), so anyone will tell you if you’re going to amortize that over four rather than two, you’re financially in a much better place.” Hill said Fox will submit two bids: one for the ‘14 Sochi Games and ‘16 Rio de Janeiro Games, and another for the ’14, ’16, ’18 and ’20 Olympics. Fox was the first to make a presentation to the IOC, showcasing its plans for covering the ‘14 and ’16 Games. The presentation was a mix of PowerPoint slides and video. It lasted an hour and 45 minutes, and a half-hour question-and-answer session followed. Afterward, IOC President Jacques Rogge said, “It was a good presentation, and I expect the two following to be good, as well. I’m happy with what they (Fox) showed, definitely.” IOC Dir of TV & Marketing Services Timo Lumme said it was "Fox at their best, a very good presentation."

TRYING NOT TO COME UP SHORT AGAIN: Hill led a six-person delegation and noted before the presentation began that it was “eight years to the day” that Fox last made a pitch for the Olympic rights. That time, it came up short, offering $700M less than NBC’s winning bid for the ‘10 Vancouver and ‘12 London Olympics. Hill said anticipation, nerves and “hope” that Fox wins marked this pitch. Fox’ delegation included Hill, Fox Sports Media Group co-President & co-COO Randy Freer, CFO Larry Jones, Exec VP/Research & Programming Bill Wanger, CMO Eric Markgraf and Senior VP/Media Relations Lou D'Ermilio. Hill said Fox Deputy Chair, President & COO Chase Carey did not attend because he was “comfortable” with Hill presenting the network’s case. Hill closed Fox’s presentation by saying he was going to miss NBC Sports Group Chair Dick Ebersol “hugely.” He added, “The Olympic movement owes him a huge debt. Dick Ebersol can get emotion out of a rock. He is a wonderful showman. He had this ability to select athletes that no one had ever heard of, and they became huge mega-stars. The fact that he’s not going to be around anymore, I’m certainly going to miss him.”

ESPN, NBC COMING TOMORROW: ESPN and NBC will make their presentations tomorrow. Afterward, all three networks will submit sealed bids. The IOC is expected to deliberate and announce a winner in the late morning or early afternoon. The organization is open to considering two bids from each network: one for the ‘14 and ’16 Games, and another for the ’14, ’16, ’18 and ’20 Olympics. The ’18 and ’20 sites have not been selected. IOC officials have said they expect a bid that exceeds the $2B rights fee NBC paid for the Vancouver and London Games. The IOC and USOC had nearly 18 people in the room to hear Fox’ presentation, including Rogge, Lumme, IOC Exec Committee member Richard Carrion, IOC VP/TV Rights Vincent Chupin, O’Melveny & Myers Partners Joe Calabrese and Chris Brearton, USOC Chair Larry Probst, USOC CEO Scott Blackmun, USOC General Counsel and Chief of Legal & Government Affairs Rana Dershowitz and others (Tripp Mickle, SportsBusiness Journal).

BIDDING AGAINST THE UNKNOWN: USA TODAY's Michael Hiestand writes about the Olympics rights bidding in a sports section cover story and notes that “nothing else in U.S. sports costs so much and has so many variables.” The network “winning this week's bidding faces intangibles such as how many Americans will win [how] many medals, time-zone differences and how evolving social media and technology like 3-D TV will change the media landscape and how the games are consumed by 2014 and 2016.” In addition, there are “issues networks probably don't even want to think about, such as the possibility of a terrorist act.” Getting the ‘14 and ‘16 Games “likely will cost billions.” Rio is in an "exotic locale in a favorable time zone for U.S. networks,” making the offers in essence "bids to lock up 2016.” NBC, which paid a total of $2B for the ‘10 Vancouver and ‘12 London Games, “lost $223 million on Vancouver” and “might lose as much next summer on London.” Still, the IOC “expects prices to go up” in this round of bidding. NBC “hasn't commented on its Olympic plans” since Ebersol announced his departure from the net. Fox and ESPN/ABC said that they “would have live coverage.” Fox Sports Media Group co-President & co-COO Eric Shanks last week said that the net “would change the Olympic TV formula by going live.” Shanks: “It just makes sense. You might as well try to reach as many people as you can" (USA TODAY, 6/6).

IT'S A DIFFERENT WORLD: In N.Y., Richard Sandomir notes the IOC would “certainly like to repeat the no-doubt-about-it outcome of eight years ago, when NBC’s $2.2 billion bid (including its parent company General Electric’s Olympic sponsorship) beat Fox’s $1.3 billion offer.” But that outcome “is not likely,” as each network “might be calculating the least it can bid to win, not how much would be a knockout blow.” In “proposing to remove the shackles from live coverage, ESPN’s and Fox’s two-front challenge reflects a modern view of Olympic event consumption.” They know it is “more difficult than ever to prevent fans from knowing results almost instantaneously.” Sandomir notes they still “intend to produce a taped recap for prime time, just as NBC has.” What remains unclear is “how flexible NBC’s live-or-taped approach will be, post-Ebersol.” Newly appoint NBC Sports Group Chair Mark Lazarus “declined to comment.” Comcast’s own “media sophistication could prod it to produce a hybrid, with more live coverage but still plenty on tape” (N.Y. TIMES, 6/6).
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