The U.S. Olympic Committee is rewriting the rules of its media rights agreements with national governing bodies.
Four years ago, as it was preparing to launch a TV network, the organization bought the media rights of 17 NGBs for $70,000 a year. The deals gave the USOC control over the NGBs’ websites and initial rights to any media content the NGBs produced. It allowed the USOC to create an umbrella site, teamusa.org, that operated as a league site for the NGBs’ team pages.
The new agreements, which will cover the 2013-16 quadrennial, will see the USOC pay NGBs $25,000 to $150,000 annually based on their total traffic. The NGBs will retain rights to their event content, control production of events and distribution and retain full editorial content on their own website. The USOC will provide free website hosting, AP news feeds and free mobile Web platforms.
The USOC hopes to have all 35 Olympic NGBs agree to the new terms. It wants to build a total audience of 1 million monthly unique visitors.
“I’m hopeful we made a really appealing business proposition to them and more NGBs will migrate to our site under these terms,” USOC chief marketer Lisa Baird said.
The USOC is completing work on a new website, with WPP agency VML leading the development, and expects to roll it out in the first quarter of this year.
Baird said the USOC is creating a digital revenue model that will see it incorporate its digital offering into sponsorships. It also plans to offer some subscription services and hire employees with digital sales experience who can assist in selling advertising.
“Our mandate [from the USOC board] is to turn this into a revenue-generating entity,” Baird said. “We’ve generated revenue, but we haven’t looked at it as a revenue play. We’ve looked at it more as a brand and information play.”
The proposal has led some larger NGBs to give the USOC’s Web platform a second look. USA Swimming didn’t sign a media rights agreement with the USOC in 2007 because it was launching a swimming website with Wasserman Media Group. It subsequently brought those rights in-house and now manages its own digital operations. But USA Swimming chief marketer Matt Farrell said he liked the USOC’s new proposal both financially and in terms of what rights USA Swimming would retain.
“It’s a very prudent approach based on traffic and performance designed to reward performance and figure out how to monetize it going forward,” Farrell said. “We’re evaluating it and we like how they’ve approached this.”
The agreement has created some unease among smaller NGBs because it will bring another cut in what the USOC contributes to their organizations in the future. Many of those NGBs that generate the least traffic are the same NGBs that are expecting a cut in funding as the USOC begins to base its contributions to NGBs on their Olympic performance.
USA Bobsled and Skeleton Federation CEO Darrin Steele said he understood why that might upset some NGBs but added that each NGB has the chance to increase its traffic and get more money from the USOC. Plus, what the NGBs give up in money, they gain in flexibility.
“It’s a more dynamic arrangement,” Steele said. “It reflects the change in time and how media works now.”
