SBJ/Jan. 13-19, 2014/Media

NBC halts Sochi ad sales for now

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Weeks before the Sochi Games are scheduled to start, NBC has stopped taking ad sales orders for the Winter Olympics.

The network is reserving an undetermined number of ad units for advertisers in case it does not hit ratings guarantees during the Sochi Games. If ratings fall short of those guarantees, NBC would need to have a certain number of spots available as make-goods. Olympic networks typically hold ad spots back in this manner, but in recent years NBC has not had to halt ad sales so far before the Games start.

At NBC Sports’ press event (from left): Bob Costas, Steve Burke, Mark Lazarus, Gary Zenkel.
Photo by: HEIDI GUTMAN / NBC
“We have put sales in abeyance until such time that we get to the Games and we’re satisfied with the ratings we’re delivering, at which time we’ll go back into sale once we’re comfortable that the Games are going to proceed as we expect them to,” said Seth Winter, executive vice president of sales and marketing for NBC Sports Group and NBCUniversal News Group. Winter said NBC is in its best ad sales position before a Winter Olympics in memory.

SBJ Podcast:
Olympics reporter Tripp Mickle and media writer John Ourand discuss NBC's decision to halt Olympic ad sales and its prospects for the Sochi Games.

At a press event in New York last week, NBC Sports Group chairman Mark Lazarus said that the network has brought in more than $800 million in ad sales revenue around the Olympics, “and we’re going north.” NBC expects to make a profit from the Sochi Games, for which it spent $775 million in rights fees.

“We’re doing quite well,” Lazarus said. “Marketers and sponsors are buying one of the very few events that gather large numbers across all demographics in front of their televisions.”

It’s not known how much inventory NBC is holding back. NBC’s ratings guarantee has not been made public. Sources say the guaranteed number generally is around 10 percent below what they had been getting in past Olympics. For the last Winter Olympics in Vancouver, NBC’s ratings guarantee for prime-time telecasts was a 14.0. During those Games, NBC pulled a 17.3 rating for the Opening Ceremony and a 13.8 average rating for its prime-time broadcasts.

This situation is unique to an event like the Olympics, which for Sochi spans 18 days, from Feb. 6-23. If, for example, the Opening Ceremony on Feb. 7 under-performs ratings-wise, NBC would still have 16 days left during the Games to offer make-goods to advertisers.

“It was a long conversation with NBC,” said Jeremy Carey, U.S. director for Optimum Sports, which counts Olympic advertisers McDonald’s, Visa and Chobani as clients. “It took some time, but we feel really good about where we netted out.”

One potential hiccup occurred last week when U.S. skier Lindsey Vonn pulled out of the Games because of a knee injury. Carey said he was concerned that the loss of a big star would negatively affect the ratings.

“She’s probably the most well-known star of the Games,” he said. “We’re confident another athlete will step up and fill that void.”

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