NBCUniversal Could Take Big Hit This Year Without Olympics
Postponing the Tokyo Games will cause a “significant financial hit -- and much disruption” -- for NBCUniversal, according to James & Battaglio of the L.A TIMES. The company earlier this month said that it had already sold 90% of its commercials for the Games, and the $1.25B the company collected so far “was a new record, surpassing the total" for the '16 Rio Games. NBCU every two years “has used its 17 days of Olympics coverage to forge relationships with key advertisers and millions of viewers,” and its Olympics coverage “crushes its TV competitors in the ratings.” The company “already had advance teams in place in Japan,” but had been “making contingency plans in recent days as it has become clear that holding the Games in July would be untenable.” For NBC’s sales team and advertisers, the postponement “adds to the economic uncertainties due to the U.S. shutdown of nonessential businesses.” It also will likely mean “renegotiating contracts, and prompt advertisers to re-calibrate their spending plans.” The IOC did not specify when in ‘21 the Games will take place, so it will be “difficult for both sides to make concrete plans” (L.A. TIMES, 3/25). In DC, Kilgore, Maese & Denyer note Comcast has said insurance coverage “would ensure the network doesn’t suffer losses, although it would miss out on Olympic-related advertising revenue” (WASHINGTON POST, 3/24).
NBC TALKED TO IOC ABOUT SCHEDULE: In DC, Ben Strauss cites sources as saying that Comcast execs “had been in touch with Olympic officials in recent days, making their scheduling preference known: They wanted the Games postponed for a year rather than a few months until this fall.” Other factors “contributed to the choice of the one-year delay” by the IOC, but NBC is an “influential stakeholder in the Games.” More than 70% of the IOC’s nearly $6B from the current four-year Olympic cycle comes from TV revenue, and NBC “pays roughly half” of that. If the Games had been delayed until the fall, the Olympics “would have had to compete with the NFL and college football in the United States, along with a number of other events that have been pushed from this spring.” That includes NBC’s commitments to a rescheduled Kentucky Derby and French Open, not to mention the possibility of a much-later-than-usual Stanley Cup Playoffs (WASHINGTON POST, 3/25).
NEW DEALS WITH AD BUYERS LIKELY: The WALL STREET JOURNAL’s Rizzo, Mullin & Vranica note NBCU will “most likely have to renegotiate the deals with advertisers.” One ad buyer said, “NBCU cannot assume all the 2020 Olympic ad commitments will just roll over to 2021.” Another ad buyer said, “Who knows what the world will look like next year. There will likely be a full-blown recession and industries will likely have to be bailed out.” The move also will put a “dent in Comcast’s marketing for its coming streaming service, Peacock, whose July launch was heavily tied to the Olympics as a major selling point” (WALL STREET JOURNAL, 3/25).
OLYMPICS JUST ONE ISSUE: In Philadelphia, Christian Hetrick notes the Olympics postponement is "one of several disruptions" the Comcast face due to the outbreak. The company yesterday warned investors that it "could face a 'material adverse impact' as the pandemic shuts down theme parks, delays movie releases, and suspends content production" (PHILADELPHIA INQUIRER, 3/25).