SBJ/June 9 - 15, 2003/Other News

NBC retains Olympic rights with $2.2 billion bid

General Electric and its television networks, including NBC, MSNBC and CNBC, retained U.S. rights to the Olympic Games on Friday with a landmark $2.201 billion winning bid that pays for broadcast rights and a newly created global sponsorship category.

GE/NBC, outbidding Disney (ABC/ESPN) and News Corp. (Fox), agreed to pay the International Olympic Committee $820 million for the rights to the 2010 Olympic Winter Games and $1.18 billion for rights to the 2012 Games, plus an additional $160 million to $200 million during an eight-year period to secure for GE a place among the 11 existing members of The Olympic Program (TOP) designating global sponsors.

The TOP sponsorship tied to the TV rights is unprecedented. The agreement makes GE a global sponsor for 2005-2008 and 2009-2012, and marks a dramatic increase in that fee during a four-year period. Existing TOP sponsors for 2005-2008 are expected to pay $50 million to $60 million for global rights.

"The TOP commitment made it a very compelling offer," said Richard Carrion, chairman of the IOC's finance commission, in a media conference call from Lausanne, Switzerland, site of the rights bidding Thursday and Friday. He said the actual rights category GE will own has yet to be determined because "we just received the offer a few hours ago," suggesting it was unexpected.

The GE/NBC bid exceeds by 32.6 percent the $1.507 billion combined rights fee paid for the 2006 Winter Games in Turin, Italy, and 2008 Summer Games in Beijing. The massive financial commitment is in place even though the host city of the 2010 Games will not be decided until July 2, and the host of the 2012 Games, for which New York is a candidate, in 2005.

The U.S. Olympic Committee's 12.75 percent cut of the TV fee will be $255 million in the 2009-2012 period.

As part of the multi-tiered deal, GE/NBC is committing $12 million to broadcasts of U.S. Olympic Trials for both the Winter and Summer Games and $10 million to the development of enhanced Olympic video archiving technology.

The Olympic Games are "the only thing that puts mom, pop and the kids in front of the TV at the same time," said NBC Sports and Olympics Chairman Dick Ebersol. "[And] the Olympics are very good business for NBC."

Rising rights fees
Year City Ratings U.S. rights fee
2012 TBD TBD $1.18 billion
2010 TBD TBD $820 million
2008 Beijing TBD $894 million **
2006 Turin TBD $793 million **
2004 Athens TBD $613 million **
2002 Salt Lake City 19.2 $545 million
2000 Sydney 13.8 $705 million
1998 Nagano 16.3* $375 million
1996 Atlanta 21.6 $456 million
1994 Lillehammer 27.8* $295 million
* On CBS. All others telecast on NBC
** Part of a $2.3 billion three-Olympic bid
Sources: Street & Smith's SportsBusiness Journal research, U.S. Olympic Committee, Nielsen Media Research

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