Rio’s Olympics Win Means Lower U.S. Broadcast Bids

Ebersol says rights now worth 15 percent less
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COPENHAGAN, DENMARK: The 2016 Olympics from Rio will be worth less to U.S. broadcasters than had Chicago won its bid to host the Games. Dick Ebersol, NBC’s chief of sports, told the press last week that broadcast rights for the 2016 Games will be worth a much as 15 percent less from the Brazilian venue versus one in Chicago.

That will translate into less money for the International Olympic Committee, which last week gave the Games to Rio after dismissing the Windy City in the first round of voting, despite a personal visit from President Barack Obama and First Lady Michelle Obama. More than half of the IOC’s global broadcasting revenues have come from NBC over the course if it’s current deal with the network--more than the rest of the world’s combined.

NBC paid a total of $5.7 billion for the Summer and Winter Olympics between 2000 and 2012. Of that, the network shelled out $2.2 billion for the 2010 Vancouver Winter Games and the 2012 Summer Games from London, breaking the $1 billion mark for broadcast rights to a single Games. By comparison, Brazilian broadcasters paid a reported $60 million for the rights to those Games, and $170 million for the 2014 and 2016 Games.

U.S. broadcast rights for the 2014 and 2016 Games have not been awarded. Bidding may not commence until as late as 2012 if the economy doesn’t improve sooner, the IOC’s Richard Carrion told The Associated Press.All the major broadcast networks plus ESPN are expected to bid, though New Corp. chief Rupert Murdoch recently said one from Fox would be unlikely, since networks struggle to make a profit from the Games.

NBC has made the most of its rights in recent years with an unprecedented multiplatform coverage, including live streaming on the Internet and replays on its diginet, Universal Sports, that continue to this day. And while networks may not see a huge return on the Games, affiliated stations see revenues rise during the events.

Ebersol suggested that the U.S. Olympic Committee played into Chicago’s defeat in Copenhagen last week. The relationship between the USOC and the IOC is rocky at best, as described by Philip Hersh of the Los Angeles Times. Part of that bad blood is said to involve substantial salaries paid to top USOC executives, who did not attend a June IOC meeting during which competing host cities were reviewed for the first time.

The IOC was also put out by a move by the USOC to launch its own Olympics TV network in the United States, possibly bypassing broadcasters for future coverage and costing the IOC millions.

Whether or not the USOC’s actions hurt Chicago, the city was outbid by Rio to the tune of around $9 billion. Rio went to Copenhagen with a budget of $13.92 billion compared to Chicago’s $4.8 billion.

(Cover image by comawe ; story image by Jin Shuo)

More on Olympics broadcasting:
“Rio choice not so grand for U.S. TV,”
by Michael McCarthy at USA Today.

July 13, 2009: “U.S. Olympics Plans to Launch Cable Network”
The U.S. Olympic Committee threw in with the nation’s largest pay TV operator to launch a games-themed 24/7 cable network. The International Olympics Committee reacted quickly from Lausanne, Switzerland. The USOC apparently forgot to run the idea by the IOC beforehand, according to The New York Times, quoting an IOC official saying, “We should have sat down before they did anything unilaterally.”

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