SBD/June 8, 2011/Media

NBC Keeps The Games: Net Retains U.S. Olympic TV Rights Through '20 For $4.38B

Carrion (r) says IOC hopes to reach TOP sponsorship deal with GE shortly

NBC secured the rights to four Olympic Games from ’14-20 with a whopping $4.38B bid that does not include the expected $200M TOP sponsorship from GE. IOC Exec Committee Member Richard Carrion yesterday said that GE would negotiate its sponsorship separately. Carrion: "We hope to reach an extension of the TOP deal shortly." NBC’s bid for four Games is nearly $1B higher than the $3.4B bid Fox presented. Fox ($1.5B) and ESPN ($1.4B) also presented bids for the ‘14 and ‘16 Games, sources said. The Games will cost NBC $775M in ‘14, $1.226B in ’16, $963M in ’18 and $1.418B in ‘20. The amount NBC has committed to pay is significant, considering that it will be the first time a U.S. rightsholder would have paid a multibillion-dollar rights fee without the USOC planning to bid to host an Olympic Games. In ‘03, the last time the IOC sold the rights, N.Y. was bidding to host the ‘12 Olympics that London eventually won. As of now, the USOC does not plan to go forward with a bid for ‘20. It is currently focused on renegotiating its revenue-sharing agreement with the IOC. The two have been locked in those negotiations over the USOC's 12.75% share of U.S. TV rights and 16% of worldwide sponsorships for the last three years. At a press conference announcing its NBC deal, IOC President Jacques Rogge said that the deal secures the financial future of the Olympic movement for the next decade and keeps the Olympics in the hands of NBC. Rogge said, "We're very glad to enter into a partnership with NBC. … The Olympics are in their DNA." The deal continues NBC’s long run of Olympic broadcasting. The network has televised every Summer Games since ‘88 and every Winter Games since ‘02 (Mickle & Ourand, SportsBusiness Journal).

PERFECT PITCH: The AP's Stephen Wilson reported more than "just the money and long-term nature" of NBC's bid was the impact that NBC's Bob Costas and the "rest of the 17-person delegation made in the two-hour closed-door presentation to the IOC." NBC and Comcast execs "hit hard on the emotional aspect, including a tear-jerking video about the network's love and dedication for the games." Carrion: "The passion that this team has for the Olympic Games was very impressive and very evident to all of us. ... I'd be less than honest if I said the numbers didn't come into play. It was all of it." Costas, who hosts the net's primetime Olympic broadcasts, said, "My message was, 'we've done it well and we'd like to do it again'" (AP, 6/7). SI.com's Richard Deitsch reported as the Comcast/NBC pitch neared its conclusion yesterday, Costas "stepped to the front of the room to deliver the emotional highlight of the allocution." The broadcaster "most associated with the Games in the United States elaborated on his own connection to the Olympics before introducing a three-minute video featuring vignettes from NBC's behind-the-scenes Olympic staffers." That group, a "collection of producers, marketers and other office personnel, offered personal testimonies as to why the Olympics were important to them and their company." USOC Chief Communications Officer Patrick Sandusky, who was in the room for NBC's presentation, said, "That film left tears in some people's eyes. It was such a human moment at a business presentation." Deitsch noted Comcast Chair & CEO Brian Roberts "followed the video with some brief remarks and the presentation concluded with an Olympic sizzle reel featuring Michael Phelps, Usain Bolt and other great moments from NBC's years of Olympic coverage." Carrion: "I will tell you we were blown away by the presentation" (SI.com, 6/7).

IF IT AIN'T BROKE ... 3WIRESPORTS' Alan Abrahamson wrote the IOC, "like any institution, has a comfort zone." With NBC, the IOC "has enjoyed growth, prosperity and -- under Rogge’s direction in particular -- financial security." While it "might well have achieved those things in partnership with other networks, the fact is it is NBC that has been there through the ups, the downs." With the USOC and IOC negotiating over the USOC’s broadcast and marketing rights shares, Rogge said the new NBC deal figures to be a “positive factor” in those talks. In addition, the IOC officials said that the organization "still hopes to reach a separate extension of the GE sponsorship." Abrahamson added, "It’s far too facile, meanwhile, to say that Tuesday’s deal is only about the money. To know even the first thing about the IOC and its culture is to know that" (3WIRESPORTS.com, 6/7). Chicago-based marketing agency rEvolution President & CEO John Rowady said, "The relationship with the IOC, the stature of NBC, what they've accomplished with the Olympics, being consistent with their numbers year to year, all that makes the IOC hard-pressed to try somebody new" (ADAGE.com, 6/7).

NOT EVERYTHING BOUND FOR CABLE: FOXSPORTS.com's Brian Lowry wrote a notable issue from NBC keeping the Games is that a "broadcast network has retained one of TV’s preeminent sports showcases, denying ESPN’s bid to acquire the Games, which would have meant shifting more coverage of another marquee event to cable." The BCS, part of the MLB playoffs, "most of the NBA Playoffs (except the Finals) and a sizable chunk of the NCAA Tournament are now cable-carried events." Lowry added, "'Free TV' might be a misnomer ... but there’s still a difference between a broadcast network, like NBC, and ESPN" (FOXSPORTS.com, 6/7).

HAVE A QUESTION? Have a question about how the new Olympic rights deal was done? E-mail it to news@sportsbusinessjournal.com, and SportsBusiness Journal staff writers John Ourand and Tripp Mickle will answer it in our Olympic Mailbag.

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Media, NBC, IOC, Comcast Corp.

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