The battle that has erupted over the U.S. Olympic Committee’s plan to launch a cable channel in partnership with Comcast Corp. boils down to a fight over who gets to mine the gold from Olympic-related TV and online content.
The dispute pits the Intl. Olympic Committee and NBC Universal — which has billions invested in Olympic rights and has a similar venture in its year-old Universal Sports channel — against the USOC and Comcast. The flare-up over the USOC’s Wednesday announcement of the channel, dubbed the U.S. Olympic Network, adds to the long-standing conflict between the IOC and USOC over revenue sharing from TV and sponsorship coin generated by the Games.
Critics of the USOC’s plan, including NBC Sports chief Dick Ebersol, are warning that the intensified public bickering between the IOC and USOC threatens to hurt Chicago’s bid to host the 2016 Summer Games. The vote among IOC members on the site selection for 2016 is skedded for Oct. 2 in Copenhagen.
The IOC publicly scolded the USOC last week for having “acted unilaterally and, in our view, in haste by announcing their plans before we had had a chance to consider together the ramifications. … The proposed channel raises complex legal and contractual issues and could have a negative impact on our relationships with other Olympic broadcasters and sponsors, including our U.S. TV partner, NBC.”
The USOC and Comcast said the plan is to launch the U.S. Olympic Network next year on the heels of the Feb. 12-28 Winter Games in Vancouver.
The question of whether the IOC can block the USOC from moving forward with the channel remains up in the air. The IOC warned the USOC in a letter sent the day before the announcement that it retains “certain approvals and controls” over the use of the Olympic rings logo and historical footage. By an act of Congress, the Colorado Springs, Colo.-based USOC has the exclusive right to coordinate Olympic-related athletic activities in the U.S.
IOC and USOC officials are expected to meet within the next few weeks to attempt to hammer out a truce on the channel. USOC officials strongly disputed the suggestion that the plan for the U.S. Olympic Network was sprung on the IOC at the last minute.
The USOC and Comcast outlined plans for programming that would focus on the personal stories of athletes as well as put an emphasis on giving more exposure to lesser-known sports. The channel would have exclusive rights to USOC Olympic trials after the 2012 Summer Games. It will also have multiplatform extensions, including offering on-demand broadband access to various events.
USOC execs said the goal in launching the channel is to generate more money for training and support of USOC athletes, and to raise public awareness of Olympic sports and U.S. athletes beyond the biennial Games. USOC execs maintain they have had extensive discussions for years with IOC officials and NBC U execs about their interest in launching a channel. The launch of the U.S. Olympic Network is being spearheaded by USOC chief operating officer Norman Bellingham, who joined the USOC in 2006 after eight years as a strategic planning exec at Turner Broadcasting.
NBC U launched a somewhat similar venture last year, in advance of the Beijing Games, in partnership with private equity firm InterMedia. But the Universal Sports digital channel, now available in about 45 million homes, does not feature the famed Olympic rings logo in its branding. The channel carries a wide range of global competitions involving Olympic sports, plus generous reruns of NBC U’s coverage of the Beijing Games.
The U.S. Olympic Network would be able to use the logo and presumably tap into the strong interest among advertisers in Olympic-branded programming. Stephanie Streeter, acting CEO of the USOC, touted the channel’s ability to “generate compelling opportunities for Olympic sponsors to expand their association with the Olympic Games and the Olympic Movement.”
NBC U, on the other hand, has every incentive to preserve the scarcity of Olympic-related advertising to the periods surrounding the Games.
In the past decade alone, the Peacock committed $5.7 billion for domestic TV rights to the Games from 2000 through 2012, while its parent company, General Electric, is among the global sponsors of the Games. Last year’s Beijing Summer Games generated a record $1 billion in ad coin for NBC U.
Ebersol told the New York Times that NBC U and InterMedia had talked with the USOC on and off for a year about combining Universal Sports with the U.S. Olympic Network.
“It would have been much richer for the American viewer,” Ebersol told the Times. He said he’d hoped the USOC “would have paid more attention to our bid and a channel that would have had a better chance of succeeding.”
But USOC officials indicated they pursued the deal with Comcast after years of foot-dragging by NBC U. The USOC opted to announce the Comcast deal last week out of concern that the news would leak after the sides signed the deal. (Allen & Co. advised the USOC on the Comcast deal, and one of the datelines on Wednesday’s press release was Sun Valley, Idaho, where Herbert Allen was holding his famous summer camp for media and biz moguls including Comcast execs.)
“If we can find a way to work with NBC and Universal Sports, we’d be delighted to,” Bellingham told Daily Variety.
On the bigger fight between the USOC and IOC, the domestic org has long complained about the inequity of the revenue-sharing arrangement with the IOC. At present, the USOC gets a cut of 27.5% of sponsorship and TV revenues, but the org has argued that it deserves more, because U.S. companies, including NBC U, account for well over half of the IOC’s coin.
Comcast, which carries Universal Sports on many of its systems, had no comment regarding the IOC-USOC flap. The news release announcing the U.S. Olympic Network noted that the deal was “subject to closing conditions,” which undoubtedly involve the IOC and USOC coming to terms on the channel.