The IOC is selling advertising packages to its current worldwide sponsors to fund the startup Olympic Channel. No deals are finalized, but the IOC is in advanced discussions with several brands, said IOC Managing Dir of TV & Marketing Services Timo Lumme. Execs hope to sell up to six “founding partner” packages to the 12 TOP sponsors. Terms were not disclosed. Sixty percent of the inventory will be reserved for the founding partners, Lumme said. Along with standard digital ad assets, the packages include the opportunity to create long-form advertorial features that blend branding with Olympic stories. The channel is key to the IOC’s goal of driving the price of its sponsorships higher by adding marketing assets with a longer shelf live than the Games themselves. By '20, nine current worldwide rights deals are up for renewal. Most were signed for between $100-120M per quadrennial. However, the IOC in '14 reset the price closer to $200M, while Toyota last year doubled that with a deal reportedly worth $835M for eight years. "Our current main revenue sources are broadcast rights and global sponsorships,” Lumme said. “What we want to do is add more value to the relationships and ultimately have those partnerships worth more." Sources said some TOP partners are skeptical about the added value of the channel in the short term, and think it should be included in their existing deals. Lumme said it likely would be included in umbrella TOP sponsorship deals after '20.
FREE TO SEE: The IOC yesterday announced the long-awaited channel would launch after the Rio Closing Ceremony on Aug. 21, at olympicchannel.com, on mobile apps for Android and iOS platforms and on dedicated Facebook, Instagram, Twitter and YouTube feeds. Unlike many OTT digital channels, it will be free to viewers in hopes of drawing a mass audience to sponsor messages. Users will have the option to register and personalize their settings within the app, but Olympic Channel GM Mark Parkman said there are no current plans to monetize those users. The channel is not expected to make a profit in the near term; $600M in startup and early operational costs have already been committed. Existing broadcasting rights holders are playing a key role; for instance, NBC Sports’ Playmaker Media is providing the streaming video back end. The IOC is not guaranteeing audience sizes to sponsors or advertisers at launch, Lumme said.
LOCAL NATIVES: Much of the channel’s eventual structure is a work in progress, IOC execs said. The organization hopes to eventually launch localized versions by country and region, and is in talks to include the app on smart TV systems, Lumme said. Delivering the channel on linear cable networks in some markets is still a long-term possibility. NBC and USOC officials have been meeting regularly with Olympic Channel leaders. The channel continues its efforts to sign agreements with the Olympic world’s international sports federations. Twenty-seven federations, including swimming and gymnastics, have already signed up. FIFA and the IAAF are notable exceptions. Eleven of them have signed non-exclusive distribution deals for live events in the first few months after launch, Parkman said. Those events will stream in addition to whatever distribution deals are already in place through the federations. Parkman: "We made it clear that we wanted something they can use in addition to their distribution models, and not compete with or upset any of those models."
