Comcast execs have readily admitted that the entertainment division of NBC was going to require the heaviest lifting as part of the cable operator’s joint venture with NBC-Universal, now five months old.
By contrast, the combination of the companies’ sports businesses was poised from the start to be the merged entity’s turbo-charger. It was a major reason Comcast took on the headache of NBC’s primetime woes and the exposure of a protracted regulatory review to get a deal done.
But the departure, announced Thursday, of Dick Ebersol, the exec who helped build NBC Sports into a powerful franchise that becamesuch attractive merger bait, raises questions about whether NBCU can be as competitive in sports media as Comcast brass had envisioned.
For one, there is the issue of price. Sports rights don’t come cheap, and neither do top-tier sports execs. Comcast found that out when Ebersol demanded compensation for a new contract that NBCU topper Steve Burke just wasn’t willing to pay. According to insiders, he also wanted a long-term deal to make sure he would still be with NBC and could maintain relationships with the Intl. Olympic Committee well into the end of this decade.
Burke has signaled he will keep a firm grip on the purse strings. When asked, on a recent earnings conference call, about how aggressively NBCU would go after Olympics rights, Burke said, “We are in business to make money. We will be disciplined.” He said he thought the Olympics and the NFL are “two fantastic properties, but we like to make money.”
That said, it has been confirmed that Comcast CEO Brian Roberts is traveling to Lausanne, Switzerland, next month as the NBCU point man meeting with the Intl. Olympic Committee as NBCU fields its bid for future rights. It likely won’t be as big a number as it would have been if Ebersol were still repping NBCU, but Burke and Roberts want it to known to the sports community that NBCU will remain a serious player even with Ebersol’s exit.
Intl. Olympic Committee president Jacques Rogge said last week that he still expected NBCU to make a “firm” bid.
The reality of sports on TV is you have to spend money to make money, say sports biz followers. Ebersol was gung-ho on doing what it takes to retain NBCU’s long lock on Olympics rights.
Ebersol’s resignation is “a setback for NBC,” said consultant Anthony Smith, co-author of “ESPN, The Company: The Story and Lessons Behind the Most Fanatical Brand in Sports.” “They’ve got a little bit of a hurdle now. Personal relationships are often the tie-breaker in these kinds of negotiations.” Smith serves on ESPN’s V Foundation board.
Mark Lazarus, Ebersol’s successor as NBC Sports topper, is a seasoned sports exec who joined the Peacock in February. He negotiated plenty of rights deals during his days at Turner Broadcasting, but he has not been in such a competitive contest as he is about to face for the 2014 Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio De Janeiro. Bidding, expected to exceed $2 billion, commences on June 6 at the Intl. Olympic Committee’s HQ in Lausanne.
While NBCU would be thrilled to land the next two Olympiads — and some say the network needs those events to help promote its primetime lineup — it can’t afford a situation like the Vancouver Games in which the Peacock lost more than $200 million.
ESPN and Fox are expected to be aggressive bidders for the rights to Sochi and Rio, with news last week that ESPN parent Disney, flexing its global muscle, is mulling whether to throw in some additional sponsorship dollars on top to beat out rivals.
Like NBCU, ESPN has plenty of delivery options to air the Games. In addition to ABC on the broadcast side, ESPN has several of its own channels as well as Disney nets aimed at tykes that could be used to offer Olympics coverage.
“Given this will be new for the executives at Comcast and NBC, it raises questions for sure,” Smith said.
Neal Pilson, a sports TV consultant and former CBS sports exec, said, “They might not be as aggressive without Dick, but believe me, there is sufficient interest in, and need for, the Olympics (at NBCU).”
He went on to discount the impact of Ebersol’s departure. “As important as Dick was to NBC Sports, this doesn’t change the validity or importance of this merger. As we have learned, no one CEO is essential to the business,” Pilson said. “It’s about the assets, and NBCU is asset rich.”
What NBC does lose in the wake of Ebersol’s ankling is a showman. Among network sports execs, arguably only Fox’s David Hill is as exuberant and passionate as Ebersol — who would often throw a football around in media settings — in both selling a sports package and simply enjoying the games on the field.
Lazarus, ABC/ESPN’s George Bodenheimer and CBS’ Sean McManus are more corporate execs who sometimes feel more comfortable chatting about the bottom line of a big event than the game itself.