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SBJ/August 6-12, 2012/OlympicsPrint All
The International Olympic Committee is looking to become the first sports property to land a marketing deal with Google or Facebook.
The organization hosted Google Executive Chairman Eric Schmidt last week during the London Games and has worked closely with the company since it launched a YouTube, video-on-demand channel in 2008. It worked with Facebook ahead of the London Games on a dedicated page for athletes to post personal updates during the Olympics.
The IOC played host to Google Executive Chairman Eric Schmidt in London last week.
Photo by:AP IMAGES
One concern, though, could be in how much a social or digital media category overlaps with a traditional broadcast agreement.
“We’re interested in that space,” said Timo Lumme, IOC managing director of TV and marketing services. “Does that mean it will translate into a broadcast rights deal or that it translates into a marketing agreement? It’s a little too early to say, but it’s something in general we’re looking at, absolutely.”
Lumme declined to say whether the IOC had held conversations with Google’s Schmidt or other companies about a deal.
Google has been considered by some properties to be a potential bidder for broadcast rights in the future, but the company has said repeatedly it’s not interested in pursuing rights deals.
The idea of signing a sponsorship deal with Google or Facebook comes as the IOC begins to re-evaluate the TOP program. The organization has not changed its worldwide sponsorships or the rights that come with it since creating TOP in 1985.
Lumme said the organization will sit down after the London Games and look at ways the program could change after 2020. It will look at the way it prices deals, what assets sponsors get and how it defines categories.
Sponsors already are asking to be included in the discussion. Scott McCune, Coca-Cola’s worldwide vice president of sports and entertainment marketing, says that as brands have begun developing their own video content to promote products, they need additional rights from the IOC, including the ability to integrate their brand into swimming highlights or have access to the Athletes Village so they can film interviews with Olympians.
“The business model has to change,” McCune said. “We have to have access to content consumers are interested in.”
The IOC also has to look at the way it prices sponsorships. Deals with local organizing committees have soared in recent years. For example, Nissan reportedly spent more than $250 million to sponsor the Rio Games. By comparison, Coca-Cola and Visa will spend $100 million to sponsor both the Sochi and Rio Games.
Lumme hypothesized that the local deals were rising fast because of the markets hosting the Games. Beijing, London, Sochi and Rio are all in markets that are highly valuable to local and international companies.
“These [TOP sponsors] are getting an incredible deal,” said Michael Payne, a sports marketing executive who used to head the IOC’s marketing program. “The biggest challenge facing TOP is price disparity between global and local numbers.”
The IOC also has to decide what it plans to do with the electronics category. Acer is leaving TOP after this year, but both Samsung and Panasonic have deals that end in 2016. With both companies making tablets, the IOC has to decide how to redraw the category so that either both sponsors stay or the IOC moves to a single electronics partner.
Lumme said all of that will be done in the early part of 2013. He hopes to have a proposal developed by next summer when the IOC will elect a new president.
“We will lay our wares there [before the new president] and have a strategic discussion based on what the new president’s political mandate is,” Lumme said. “I expect an evolution, not a revolution, there.”
Comcast CEO Brian Roberts was standing at a crowded party at the Battersea Power Station in southwest London last Monday night, making small talk with a cable operator executive who was attending the Olympics as a client of NBC, which Comcast bought last year.
NBC Sports Chairman Mark Lazarus (left) chats with on-air host Willie Geist.
Photo by:JOHN OURAND / STAFF
The company’s CEO, Steve Burke, worked the room, as did NBC Sports Chairman Mark Lazarus. Longtime Comcast executives Jeff Shell and Matt Bond, both of whom are now in key posts at NBC, also played hosts for the first of four waves of clients NBC is bringing over to the Games.
Surveying the room, one thing was clearly evident. It’s a “new” NBC that is running the Olympics. One filled with longtime Comcast executives who are now managing one of the top global events as rights holders for the first time.
They represent a changing of the guard in Olympic media.
Longtime NBC executives, like Executive Producer Jim Bell, Coordinating Producer Molly Solomon and head of production Bucky Gunts, still control the pictures and tell the stories that came across TV screens, and are the continuing vestiges of previous leadership.
But it’s now legacy Comcast executives running NBC’s Olympic business, along with Lazarus and Gary Zenkel, NBC Sports’ president of operations and strategy, that includes so much more than just television. There’s broadband, mobile and video-on-demand to consider, as well.
For at least the first week of the London Games, the Comcast-NBC marriage worked as well as they could expect.
“When we went over to Lausanne [in June 2011], our company made a big bet on the Olympics,” Burke said. “We can breathe a little easier now that we’ve seen the early ratings. The ratings help me feel confident that we’re going to see a return on that investment as we continue to produce the Olympic Games.”
Television ratings for NBC’s prime-time block were, by far, the early story of the Games and exceeded the most optimistic expectations. NBC averaged 35.6 million viewers through the event’s first five nights, putting the London Games on pace to become the most-watched Olympics in history.
But perhaps even more surprising were the business metrics around the Olympics. NBC sold more than $1 billion in ad sales — $1.02 billion to be exact — and started releasing new ad inventory into the market. During Comcast’s quarterly earnings call last week, Roberts said his company expects to break even on these Games — an about-face from a month ago when executives warned they were likely to lose money. The next day, Lazarus suggested the company may even make money on the event.
“This has been a great beginning and it is all we could ever wish for in so many categories … the open ceremonies, ratings, live streaming, great content on so many networks,” Roberts said.
New leadership, new style
The “great beginning” that Roberts referenced was felt throughout NBC’s massive compound inside the International Broadcasting Center last week. Network executives clearly were energized from the early ratings reports, and the opening weekend’s TV numbers were among the first topics brought up by NBC Sports executives during a series of interviews last Monday.
The strong ratings seemed to validate Comcast’s strategy to stream every event live, even events the broadcast network held back for its network in years past.
The executive overseeing the implementation of that strategy is the unassuming and well-liked Lazarus, who took over for Dick Ebersol last spring.
Working his first Olympics as the head of NBC Sports, Lazarus’ presence was noticeably different than his predecessor’s. Ebersol was known for bunkering down in the International Broadcast Center, keeping a laser-like focus on the prime-time show. Lazarus makes a point to get out of the IBC, visit NBC’s various sets and chat with everyone from big-name talent to anonymous staffers.
Lazarus, of course, has a different role. He’s not the executive producer, like Ebersol. Lazarus oversees all parts of NBC’s sports business.
Unlike predecessor Ebersol, Lazarus is leaving the International Broadcast Center to visit NBC’s various sets.
Photo by:JOHN OURAND / STAFF
And he has to deal with various brush fires that flare up.
Take last Monday, for example. NBC was the brunt of a torrent of criticism after Twitter suspended a reporter with the British newspaper The Independent. The reporter tweeted Zenkel’s corporate email address, and Zenkel was receiving hundreds of messages.
Before heading out to a dinner with Rogge, Lazarus was spotted huddling with Zenkel and NBC Sports communications staff in the network’s PR office at the IBC, trying to develop strategy for dealing with the controversy.
Twitter eventually restored the reporter’s account and apologized for taking it down.
That wasn’t the only flashpoint for the day. Even though it posted TV ratings that put the London Games in position to become the most watched Olympics in history, NBC received heavy criticism on social networks over its decision to tape delay some of the more popular events. In addition, NBC also was hearing complaints that its online streams were buffering and freezing too much.
A big part of Lazarus’ job was to see if the complaints were valid.
The prime-time ratings told him that the tape-delayed programming wasn’t a problem. And data from Google showing normal failure rates indicated that the streaming issues were not widespread.
“Every frame of every event that’s taking place at these Games is being streamed and available,” Lazarus said. “I think it’s a technological feat that’s never been tackled.”
The early criticism did not weigh down NBC executives last week, and it was clear that Lazarus set the tone for the company by staying positive and not becoming distracted by what he calls “noise.”
He chatted with Burke in NBC’s commissary, a massive cafeteria in the IBC for NBC’s 2,800 staffers in London that has its own 24-hour Starbucks. Burke and Lazarus spoke about NBC’s prime-time show from the night before, when American gymnast Jordyn Wieber broke down crying after failing to secure a place in the individual all-around finals.
Burke hadn’t seen it — but it was the type of emotional Olympic moment for which NBC is known. Burke held up a DVD of the telecast and said he planned to watch it later.
The online streaming complaints never came up in their conversation.
About two hours later, Lazarus rode a golf cart into Olympic Park to visit NBC Sports Network’s studio, which is on the park, adjacent to the Athletes Village.
While there, he casually bantered with one of the on-air hosts, Willie Geist. Both Geist and Lazarus attended Vanderbilt, and they relished last season’s basketball wins against Kentucky.
The positive energy was palpable, as tape-delay complaints were never mentioned.
The mood in NBC’s IBC offices was as upbeat as you could expect for a group that’s working on five hours sleep a night. (Lazarus, for example, is spending the Olympics going to bed after NBC’s prime-time programming ends, around 5 a.m., and wakes up at 9:30 a.m.).
The unexpectedly big TV ratings and the number of online streams helped keep the group energized and focused through the Olympics’ grueling first week.
“I want to be part of as much as I can,” Lazarus said. “I haven’t gone through this before. These first couple of days are a great learning curve for me. I have thought about it, learned about it, talked to everyone in the company about it. But to actually live through it is quite different and educational.”
Different, indeed. The same term could be applied to Comcast-owned NBC during this year’s Games.
Staff writer Tripp Mickle contributed to this story.
With the 2012 Games in full swing, the IOC has already secured $3.7 billion for the 2014 and 2016 Games globally.
Photo by:GETTY IMAGES
For the first time, Olympic TV rights revenue from the U.S. will fall below 50 percent of total IOC television money during the next quadrennium, said Timo Lumme, the IOC’s managing director of TV and marketing services.
The move comes four years after the IOC overhauled its media sales strategy by ending a decades-old practice of selling TV rights to broadcasting unions, which traditionally covered large regions of continents. Instead, it has sold rights on a country-by-country basis — a move that Lumme said has allowed it to drive significant revenue increases in markets around the world.
The IOC already has secured $3.7 billion for the 2014 and 2016 Games globally, $2 billion of which will come from NBC’s deal signed last summer. The IOC last week announced a deal with CBC in Canada, and it expects to pass the $4 billion mark after it closes additional deals in Latin America and other markets, bringing NBC’s contribution below 50 percent for the first time.
By comparison, NBC’s $2 billion rights fee accounted for more than 51 percent of the IOC’s $4 billion in TV revenue for the 2010 and 2012 Games.
In 2009, Brazilian broadcasters reportedly paid $8 million to $9 million for Olympic TV rights as part of a Latin American broadcasting union known as OTI. The IOC broke Brazil out of the union two years ago, before Rio was awarded the 2016 Games, and sold the rights for the 2014 and 2016 Olympics to three media companies in a deal worth an estimated $170 million, representing a roughly twentyfold increase from its individual deal with OTI.
The BBC broadcasts from inside the Aquatics Centre on July 28. Broadcasters from outside the U.S. are providing a growing portion of the total media rights fees paid to the IOC.
Photo by:GETTY IMAGES
“Other markets are now starting to grow,” Lumme said. “The U.S. can’t grow because it contributed for this quad in effect a 50 percent increase [from 2005 to 2008]. Knowing the U.S. is flat, the increase will be contributed by other territories.”
And the IOC is not done.
Lumme says the organization may close another deal before the London Games end. And with the 2016 Games in Rio being billed as the first Latin American Olympics, Lumme is particularly optimistic that the organization will be able to increase TV rights revenue in Latin America, where it still has rights to sell in Mexico. It historically has sold pan-regional rights there to OTI and ESPN, but it may look to sell individual rights in Peru, Chile and other markets in hopes of increasing revenue.
“We have a real opportunity to move the meter in terms of valuations [in Latin America] with the Rio Games,” Lumme said. “I believe we will have a very competitive landscape. I’m excited.”
The IOC also has to sell rights in Asia for the 2014 and 2016 Games. Overall, it does not expect to generate the 50 percent increase in rights fees it got between the 2005-2008 quad and the 2009-2012 quad, but it does expect to pull in more than the $3.9 billion it got from 2009 to 2012.
Photo by:GETTY IMAGES FOR MCDONALD'S
Wiremu Knowles failed to hit the target, but it didn’t matter. The 6-year-old Australian was at the tail end of three of the most incredible days of his life at the Olympics, and he was having a great time. He even got to hold the silver medal won by the U.S. archery team.
It was all part of a new program developed by International Olympic Committee TOP sponsor McDonald’s for the London Games. The company brought more than 200 children to the Olympics and, for the first time, worked out unprecedented access to take them behind the scenes so that they could try archery at Lord’s Cricket Ground and play beach volleyball at Horse Guards Parade.
The ability to walk along the fields of competition did not come easy, as the program was four years in the making. John Lewicki, McDonald’s head of global alliances, began asking the IOC in 2008 to expand the restaurant company’s sponsorship assets so that it could provide a unique experience for kids at the Olympics.
It was modeled after an activation the company had used successfully during its sponsorship of the FIFA World Cup. As part of that deal, it is able to have 1,400 children from around the world walk onto the field with soccer players before matches. It allowed them to promote an active lifestyle, reward customers and create brand ambassadors for life.
But the company was never able to translate those similar rights to its IOC deal. McDonald’s brought a few hundred children to the Beijing Games in 2008, and while it took them to several events and tourist sites such as the Great Wall, none of them were able to step on the field of play or meet many athletes.
“Quite honestly, anyone could do that,” said Lewicki, whose company is spending $100 million from 2009 to 2012 as an official IOC sponsor. “You didn’t have to be a sponsor, so we started asking how can we make this better.”
McDonald’s global sports marketing executive Brian Goldstein started talking with the IOC about a variety of ideas. Could children escort the flag bearers in the opening and closing ceremony? Could they escort dignitaries in the medal ceremony presentation? Could they bring children onto the swim deck or volleyball court and let them meet athletes or play the sports?
A child takes a shot at archery at Lord’s Cricket Ground.
Photo by:GETTY IMAGES FOR MCDONALD'S
The IOC didn’t rewrite its McDonald’s contract to include the right to bring children into venues, but the IOC worked with the London Olympic organizing committee to make sure McDonald’s got access.
“There’s been a real shift as we integrated sponsor management inside the IOC,” said Timo Lumme, the IOC’s director of TV and marketing services. “We felt there was a lot more value we could add. We try to dimensionalize the relationship beyond just being the basic sponsorship.”
Last week, McDonald’s brought the first of five waves of 50 children, each of whom can bring one parent, to London for its “Champions of Play” program. The initiative promotes active living and is central to McDonald’s effort to combat public perception that it contributes to rising obesity.
Each child was selected from their host region. Australians like Knowles were selected after writing an essay about teamwork or overcoming a challenge in sports. A local TV station showed up at their homes to let them know they had won.
Over three days in London, they walked on the swim deck at the aquatic center, visited Lord’s Cricket Ground and stood where Olympic archers would later fire arrows, and spent an hour playing beach volleyball at Horse Guards Parade. In most cases, the visits took place on the day of competition.
Their trip ended with Olympians — U.S. swimmer Dara Torres, U.S. speedskater Joey Cheek and Italian canoer Antonio Rossi — giving each child a medal.
Lewicki said the London Games program is a great step forward in McDonald’s Olympic sponsorship.
“Now we move forward to Sochi and Rio and look at how we can fine-tune it and make it better,” he added.
The Olympics’ importance to Comcast goes way beyond NBC’s prime-time window. It’s even more important than its cable channels, like NBC Sports Network, which has seen ratings and distribution growth thanks to the Games. For Comcast CEO Brian Roberts, the Olympics’ popularity allows his company to test new technologies and imagine how the media landscape will look in the next decade. SportsBusiness Journal media reporter John Ourand caught up with Roberts in NBC’s compound at the Olympic Games in London last week and asked the executive about his Olympic Games experience.
Photo by:GETTY IMAGES
ROBERTS: This has been a great beginning and it is all we could ever wish for in so many categories … the opening ceremonies, ratings, live streaming, great content on so many networks.
■ NBC’s operation in London seems so extensive to me.
ROBERTS: This is the most technologically sophisticated experience I’ve ever been a part of. These are real pros who have been doing this for decades, and I’m just trying to get out of the way and let them shine. What’s amazing to me is something called the “Subway Chart” that shows where all our production locations are and the various broadcast feeds, technology, fiber-under-the-sea and satellites are. When you look at the Subway chart you can see how we are able to deliver all this content when you want to watch it on whatever device you want to use. We have 3,400 people working here to make all this happen and they are working really hard. It’s early, but so far I think the ratings are great.
■ Is this the future of the Olympic Games that we’re seeing?
ROBERTS: We see these Olympics as a real laboratory. If you subscribe to cable or satellite, you can watch a lot more than what’s on linear TV. When we were bidding in Lausanne for the future Games, and we got the rights through 2020, we were looking at some statistics. In the year 2000, there was virtually no broadband technology, and in the year 2010, broadband has become such a huge thing. So what is coming in 2020 that doesn’t exist today? We don’t know. But we have the rights to broadcast on any new technology that may be developed. That’s one of the great things about the rights we have.
■ Do ratings matter to you?
ROBERTS: Different people have different answers to that. To the advertising department, they matter a lot, and Steve Burke, Mark Lazarus and Gary Zenkel are obviously watching them very closely. I look at ratings and say, there’s only so much we can control. As long as we’re heading in the right direction and deliver an excellent broadcast, then I am happy. We’re in it for a decade. This is the first three days. I’m thrilled the ratings are up.
On the opening day of Olympic competition in London, Dick Ebersol went to the U.S.-France basketball game. The sight of him in line for concessions stopped one executive in his tracks.
Ebersol at an Olympics event? It was something that hasn’t been seen in the last two decades — a stretch dating to 1992, during which Ebersol was the Games’ executive producer for NBC and defined its coverage in the United States.
Dick Ebersol has emerged from the bunker he used as the Games’ executive producer.
Photo by:GETTY IMAGES
Between 1992 and 2010, Ebersol spent the majority of the Olympics holed up in an expansive, bunker office at the International Broadcasting Center. The office had televisions for every competition so that he could keep track of events, and even a bed and a shower so that he never had to leave the broadcasting center if he didn’t have time to head to a hotel.
Plans for a similar office in London were scrapped by NBC after Ebersol left the network last year. NBC repurposed the space to make room for more employees that it wanted to bring over from the NBC Universal family of networks.
Still, Ebersol is spending the majority of his time in London working on the Olympics broadcast. He’s in the IBC most days advising Jim Bell, NBC Olympics executive producer, on broadcast decisions. He opens every day at an NBC meeting to discuss programming plans and events, but he is spending the rest of his days and nights differently than he did in the past.
He was able to take in the U.S.-France basketball game. He is staying in the same hotel as the rest of NBC’s production staff. And he often is seen outside the IBC smoking a cigar.
“He has his family here, and he’s enjoying himself,” Bell said.
Ebersol declined to be interviewed for this story.
Reduced workload aside, Ebersol’s taken as much interest in these Olympics as any that have preceded it. He was on the phone with NBC’s swimming color commentator Rowdy Gaines the day Michael Phelps won his 19th Olympic medal, asking Gaines about how Phelps looked in practice and what his mood was like.
“He’s very invested [in Michael] from a friendship standpoint,” Gaines said. “He’s been with him four Olympics, too, and Dick loves the Olympics. He has a really strong passion for them.”
While it’s been different not having Ebersol run the show in London, NBC executives are glad to have him on site as an adviser. The company opened a three-hour seminar before the Games with several executives praising his approach to the Games and saying that the approach wouldn’t change in London, Gaines said.
“There are two reasons why the Olympics are what they are today,” said Gaines, who attended the seminar. “There’s Roone Arledge and Dick Ebersol. Those are the two main factors why you see the Olympics on television the way it is. They are visionaries.”