SBD/June 9, 2011/Media

Keeping Olympic Rights Will Allow Comcast To Drive Up Fees For Versus

Brian Roberts (l) has pledged Comcast will turn a profit from $4.38B investment
The odds that the '14-20 Olympics "will generate almost $4.4 billion in ad revenue seems unlikely," so Comcast/NBC will "look elsewhere to drive revenues" from the Games in order to turn a profit on its $4.38B deal for U.S. media rights, according to Joe Flint of the L.A. TIMES. Carriage fees for Versus "will no doubt go way up" from its current $0.36 per subscriber. Placing a "lot of Olympic content on Versus will give Comcast the leverage to jack up the fees." In addition, keeping the Games "will make NBC's affiliates very happy and allow them to get more money from distributors in so-called retransmission consent fees." Flint noted the $4.38B price tag "has NBC's rivals wondering if the company didn't once again over extend itself on the Olympics," but Comcast Chair & CEO Brian Roberts was "adamant that the Games would be profitable for the company." The Olympics "would be a nice addition" for ESPN, which submitted a $1.4B bid for the '14 and '16 Games, but "not crucial to its long-term survival by any means." On the other hand, NBC "has been the home of the Olympics for more than a decade." It is a "bragging right and also has been the one bright spot at the company in recent years." With its primetime lineup "struggling, losing the Games would have been seen, fairly or not, as a sign that NBC was inching toward irrelevance" (LATIMES.com, 6/8).

WE'LL DO IT LIVE: In N.Y., Richard Sandomir notes NBC's pledge to carry the Olympics live starting in '14 is "good, even magnificent, news for fans exasperated by NBC’s policy of tape-delaying all or parts of the Olympics to feed its prime-time broadcasts." However, NBC "must live by its live Olympics vow -- without exploiting loopholes or making any platform, especially online, difficult for fans to gain access to." In fact, the network "should jump-start that plan next year at the Summer Games in London, which, because of its time zone, is ripe for tape delay." Broadcasting live "was an inevitable decision" when Comcast bid $4.38B for the Olympic rights. Sandomir: "NBC had not promised in advance of the Olympic auction that it would go live as ESPN and Fox had promised. Perhaps Comcast needed its rivals to end the era of tape delay. But more likely, Comcast looked at its existing assets and wondered why NBC had so long resisted the live Olympics" (N.Y. TIMES, 6/9). GRANTLAND.com’s Chuck Klosterman writes NBC’s vow to air events live is “going to be the principle issue TV audiences have with coverage of the Summer Olympics since live events in London will almost never match up with the prime-time window when NBC will want to show them.” Klosterman: “For most North Americans with normal jobs, the 2012 Olympics will not be experienced as living history; they will be experienced as recent history. And that will create the same intangible loss” (GRANTLAND.com, 6/9).

TO RUSSIA WITH LOVE? The NHL said that its participation at the '14 Sochi Games was "not a condition of its new 10-year deal with NBC." NHL COO John Collins in an e-mail said there was "no commitment from us relative to Olympics," and it was "never discussed in negotiations" for the league's new TV contract. However, the GLOBE & MAIL's Bruce Dowbiggin noted most industry sources believe that NBC retaining broadcast rights to the Olympics "greatly enhances the chances of the NHL going to Russia." Collins said, "It's a good, important win for them. It makes their biz/platforms bigger" (GLOBESPORTS.com, 6/8).

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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NBC, Comcast Corp., Media

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