One of the first tests on the horizon for NBC Universal’s incoming CEO Steve Burke will be trying to maintain the Peacock’s dominance in Olympics coverage.
After waiting for Comcast’s $30 billion merger with the General Electric unit to close, the Intl. Olympics Committee is expected to set deadlines shortly for bidding for the U.S. TV rights for the 2014 Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro.
And in a recent twist, the IOC is now considering allowing the networks to bid for the 2018 and 2020 Games as well. No cities have yet been awarded those Games.
“We realize this is a major decision going forward for any of these (networks),” IOC board member Richard Carrion said recently. “We want to make sure that they come with their best and highest (bids).”
No doubt the stakes will be high, as Disney’s ABC-ESPN combo plans its most aggressive effort yet to win the Olympics and end a decades-long NBC run.
Combining NBC U’s sports properties with Comcast’s, including the latter’s regional sports nets, was seen a major impetus for the cable giant to pursue the NBC U merger, particularly as Comcast execs have high regard for longtime NBC Sports boss Dick Ebersol.
It’s widely believed that Comcast’s goal with NBC U is to become a serious competitor to sports media leader ESPN. So the battle for the 2014 and 2016 games may foreshadow a larger war to come. It could be fought on multiple fronts, said Rick Burton, a sports management professor at Syracuse U. and a former marketing exec with the U.S. Olympic Committee.
“Many people get their ESPN via Comcast so there is, of course, (the potential for a larger showdown over) the sub fee Disney charges Comcast” for distribution of ESPN, Burton said. “Comcast’s top execs are competitive people who have excelled in their chosen field. That field now includes, more than ever, securing and broadcasting sports content.”
Still, the pricetag, at least for the 2014 and 2016 games, could easily be far north of $2 billion, an amount that will surely test the mettle of the Comcast executive team, new to such megabucks rights deals.
Fox Sports is expected to be a bidder as well, which could drive up the price for everybody. One former TV exec suggested that Rupert Murdoch may not be as serious about the Olympics as NBC U and ESPN, but that he’ll stay in the mix to see his competitors pay the heftiest fee possible.
With the 2010 Vancouver Games, NBC U absorbed a $200 million loss, although healthy ratings help offset what would have been deeper losses. NBC U won the 2010 and 2012 games with a bid of about $2.2 billion, well above ESPN’s offer of $1.6 billion.
Comcast is determined to make money on an investment in the Olympics. To further that goal and to help Ebersol’s team, Comcast in December hired Mark Lazarus, a former top entertainment and sports exec at Turner Broadcasting. At a company steeped in family legacy — Comcast CEO Brian Roberts’ father, Ralph, founded the company; Burke’s dad, Dan, ran former ABC parent Capital Cities — Lazarus, too, brings lineage. His father, John, ran ad sales at ABC Sports, serving for a time under Dan Burke. His brother, Peter, now at Univision, once ran ad sales for the Olympics at NBC and another brother, Craig, is a senior producer at — where else? — ESPN.
“Mark grew up in this business and attended his first Olympics as a kid, decades before heading Turner Sports and Entertainment,” said Jim Friedlich, a partner at media investment firm ZelnickMedia and Lazarus’ cousin. “He is genetically engineered for success in sports media.”
NBC U may need all the help it can get this time around. ESPN will clearly be trumpeting its digital technologies and the high praise it received last summer for its World Cup coverage when it makes its case to the IOC in Lausanne, Switzerland.
The outcome of the Olympic bidding could very well set the agenda for NBC U under Burke. Like his friend, Disney CEO Bob Iger, who won over skeptics early in his tenure as CEO with the deal to buy Pixar, rookie CEO Burke could make his mark by bagging another round of Olympic games.
The trick, then, would be to make the Games deliver the gold for NBC U’s various platforms.