SBJ/April 11-17, 2011/Olympics

Networks resist IOC timetable

Bidding delayed to avoid conflict with U.S. upfront sales season

The International Olympic Committee’s initial plan to host bidding for its TV rights package starting in mid-May ran into resistance from U.S. network executives, who said that the proposed date interfered with television’s important upfront selling season.

As a result, media sources said the IOC pushed back the date of bidding from May 16 or 17 to a day in early June. The IOC and networks still are trying to settle on an exact date. The move to push back the bidding by three weeks also caused the IOC to push back the earlier date it was going to require networks to submit letters of interest. Those letters originally were expected April 8. They now are expected to be submitted later this month.

The upfront selling season, when networks preview their coming programming slates for advertisers, is one of the most important events for the TV networks and demands the full attention of the top network executives. The delay shouldn’t have a significant effect on the IOC, which already has delayed the sale of the rights for nearly three years

These developments follow a series of recent meetings the IOC held with top executives from all the major U.S. television networks: CBS, ESPN, Fox, NBC and Turner. The meetings, held in late March at Banco Popular’s New York offices, marked the first time IOC leaders met with network executives to outline a timeline and process for the bidding of rights to the 2014 and 2016 Games. The Olympic bidding process will be the biggest rights negotiation for the year and traditionally has been used to set the market for other sports.

At the meetings late last month, IOC leaders told network executives they officially wanted to know by the end of last week whether they were planning to bid. Those that expressed interest were then scheduled to receive contracts to review.

Ultimately, bidders will end up in Lausanne, Switzerland, in early June, where they will be given two hours to make their presentations. Once the presentations are over, they will submit a sealed bid containing what they’re willing to pay for the rights.

The IOC and the networks declined to comment on the meetings. IOC executive board member Richard Carrión previously said he plans to name a television partner before the IOC meets in July.

The meetings were led by Carrión and Timo Lumme, IOC director of TV and marketing services. They were joined by Vincent Chupin, IOC vice president of television and audiovisual rights, and the IOC’s outside counsel, O’Melveny & Myers. U.S. Olympic Committee Chairman Larry Probst and CEO Scott Blackmun also attended.

The networks were represented by their top executives, including NBC Sports & Olympics Chairman Dick Ebersol; CBS Sports Chairman Sean McManus; ESPN President George Bodenheimer; Fox Sports Chairman David Hill; and David Levy, Turner’s president of sales, distribution and sports.

At the meetings, IOC leaders told network executives that they are looking for bids to the 2014 Sochi Games and 2016 Rio Games. They also said they would consider bids for a package that includes the 2018 and 2020 Games. The host cities for those Olympics haven’t been selected.

The IOC told network executives to bid on a package that includes television, digital and mobile platforms. Unlike in its current agreement with NBC, the IOC told the networks that the rights to the U.S. Olympic trials will not be included in the contract. Those would be negotiated with the USOC, which owns the rights.

An Olympic channel will not be part of the bidding process, either, according to executives who attended the meetings. IOC leaders told network executives that any branded, Olympic channel can’t be launched without the approval and participation of the U.S. rights holder, the IOC and the USOC.

NBC paid $2 billion for rights to the 2010 and 2012 Olympics, and Carrión has said he expects the IOC to match or exceed that for the 2014 and 2016 Olympics.

Network executives said it was unclear how much weight the IOC will put on a network’s vision for how it will present the Games versus what it is willing to pay for the Games. The IOC wants to partner with a network that respects the Olympic values and showcases the Olympic movement.

By all accounts, NBC, ESPN and Fox are considered the most serious bidders. CBS and Turner have not showed the same level of interest.

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