Let the Games begin.
The battle to nab the rights to telecast the 2010 and 2012 Olympics may come down to which network is the most desperate.
Losing the Olympics would virtually put NBC out of the sports business. ABC could use a dose of good news given its recent ratings woes. And the bad boys of Fox would love nothing more than to swipe the Games away from their bigger brethren, a final trophy for the net’s sports division.
Reps from the three webs are in Lausanne, Switzerland, this week to pitch the International Olympic Committee on awarding telecast rights to the 2010 Winter and 2012 Summer Games. One of those three networks are expected to shell out at least $2 billion for the two contests — a new record.
First up was ABC, which pitched the IOC in a two-hour presentation Thursday led by ABC prexy Alex Wallau, ABC Sports/ESPN prexy George Bodenheimer, Disney internet topper Dick Glover and ABC broadcaster/former Olympian Donna de Varona. NBC and Fox will present their cases today.
The three nets will then submit sealed bids with the IOC — led by president Jacques Rogge — which will then deliberate on the packages. The IOC will make its final decision over the weekend or schedule another round of bidding if the first set doesn’t pass muster.
CBS, which was also slated to pitch the IOC on Thursday, dropped out of the running earlier this week. Eye execs said they decided not to bid after determining they were already covered with major sports packages like the NFL and didn’t feel the urge to break the bank for an Olympics package.
Turner had also mulled making a bid, but opted out early on because it didn’t have the necessary broadcast outlets.
For the remaining networks in contention, it’s clear the IOC is in the driver’s seat. The Games are one of the few events guaranteed to deliver a broad audience in this age of network erosion and diminished returns.
“The one certainty is the unprecedented promotional platform for whichever entertainment conglomerate gets the rights,” said John Rash, senior VP and director of broadcast negotiations at media buying agency Campbell Mithun. “The Olympics, the Super Bowl and the Academy Awards are increasing the raison d’etre for the broadcast networks.”
Landing the rights will be particularly important to the Peacock — led by NBC Sports chairman Dick Ebersol — if the net (which lost the rights to the NFL and NBA over the last five years) wants to maintain any sort of major sports presence.
Then there’s ABC, which invented modern Olympics coverage (under the late Roone Arledge) but hasn’t broadcast the Games since 1988. Disney is likely anxious to take advantage of ESPN, as well the conglom’s globalized entertainment image, while finding a way to give a boost to ABC.
Fox could appear to be the longshot bid: Not only is the network chugging along just fine without the Olympics, but News Corp.’s Rupert Murdoch may want to allocate those funds elsewhere — such as to help cover its pricey acquisition of DirecTV.
No one’s taking the potential $2 billion price tag lightly. NBC already airs the most expensive primetime schedule of any network–and is about to renegotiate an expensive deal to renew its “Law & Order” franchises. Fox took a $909 million write-off last year on its NFL, major league baseball and NASCAR contracts. And ABC/ESPN have spent a large chunk of money in recent years as well, such as shelling out $4.6 billion to the NBA for a six-year TV deal.
The winning network is expected to ask its affiliates to help cover some of the expense of the new Olympic pact, similar to how ABC, Fox and CBS received relief for their NFL packages.
Still, according to Rash, “While these (Olympics) numbers appear staggering now, in an era of galloping media inflation, they may seen more rational in a decade.”
As for where the committee’s leaning, it’s anyone’s guess. The IOC may opt to stick with incumbent NBC, which paid $3.5 billion for the rights to five Olympics between 2000 and 2008. Or ABC’s Olympic history, coupled with its strong cable platform, may give the net an edge. Fox’s ability to attract and promote to younger, particularly male, viewers may intrigue the committee.
“Anyone who tells you that they know anything isn’t telling the truth,” one net exec said.
One thing’s for certain: The IOC has taken great pains to avoid what happened during the last round of bidding, when NBC managed to snag the 2006 Winter and 2008 Summer Games for $1.5 billion without any competition.
And whoever wins rights to cover the 2010 and 2012 Games does so without even knowing where they’ll be held. That’s could make the difference between breaking even and making a nice profit on the deal–after all, live coverage of a North American Game will pull bigger viewership and higher ad rates than tape-delayed coverage coming out of South Korea.
Cities competing to host the 2010 Winter Games include Salzburg, Austria; Vancouver, British Columbia; and Pyeongchang, South Korea. The winner will be announced by early July, the IOC said. Bidders to host the 2012 Summer Games include New York, London, Paris, Madrid, Moscow and Leipzig, Germany. That venue will be selected in 2005.
(Bloomberg News contributed to this report.)