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NBC loses $233M on Olympics


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NBC loses $233M on Olympics

Last Updated: Friday, April 16, 2010 | 4:58 PM ET

The Associated Press

NBC lost $223 million on the Winter Olympics in the first quarter, slightly better than the most recent estimate of $250 million in losses.

Advertising sales have improved a bit since NBC parent company General Electric Co. made that projection in late January.

The Olympics did bring about $800 million in extra revenue to GE. But NBC had a lot of production and other expenses, including $820 million just to acquire the rights to carry the Vancouver Games on television and online. That expense was cited as the main culprit for the red ink.

Still, GE executives said the high-profile event had ratings that were 14 per cent better than the 2006 Winter Olympics in Turin, Italy, for which NBC paid $613 million...(continued)

Full article: CBC: NBC loses $233M on Olympics

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I really wondered when Ebersole's follies would start to draw red. I don't think Sochi and Rio will get as high a price as what NBC paid for the Vancouver-London tandem. I wonder how much NBC will lose for London.

I don't think he will lose his job over this unless for some reason NBC loses its Sunday Night NFL Package the next time the TV contracts expire.....or if they lose money because of Sunday Night Football.

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I think that NBC overbid heavily on 2010 and 2012. Surely, that should be taken into account for this next round. But I think given Rio's favorable time-zone, that in theory, 2016 should be worth more than London 2012. Sochi on the other hand will not get the ratings we saw in Vancouver. I think they might end up paying about the same for the next round with competition possibly being a bit stronger from ABC/ESPN.

I believe most all other country's broadcasting rights increased for 2014 and 2016. The IOC indicated that they think that should apply to American broadcast rights as well, but I think it just isn't reasonable or fair. Obviously, the USOC is hoping for a good payout to the IOC, as it might give them a little more wiggle room with revenue sharing negotiations soon to be on the table.

Here is a link for those of you wanting to learn a bit more about are wonderful organization: Team USA, Inc.

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My guess is that Rio may get as much as London - $1.15 billion; and maybe Sochi $450 mil. So perhaps a $1,600,000,000 for the two. But even if I were a network, I wouldn't bid more than $900 mil for Rio because those are just the rights. On top of that you add production costs...which for Rio will probably cost at least $275 million. Sochi's prod costs for a US network would probably be in the $225 mil range.

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NBC also cut their staff by 300 for Vancouver. I think as the economy approves, it will become more lucrative, but I could see them spending even less than Vancouver on production in Sochi (even though geography will make it more expensive).

*** sorry, I meant to say improves instead of approves.

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NBC also cut their staff by 300 for Vancouver. I think as the economy approves, it will become more lucrative, but I could see them spending even less than Vancouver on production in Sochi (even though geography will make it more expensive).

*** sorry, I meant to say improves instead of approves.

IF they broadcast Sochi.

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I thought the rights were packaged together? How do you specifically come up with a calculation for the broadcast rights for Vancouver?

They are packaged together, but still separated in terms of cost. I am sure they negotiate each in a separate manner with separate considerations. One can't really compare Sochi to Rio. Just look at them as two separate menu items, but on the same order.

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NBC first made a preemptive strike for Athens to Beijing. It offered the IOC a $2.3 billion package for 3 Games. It succeeded and then got greedy: they then made another $2 billion offer only for Vancouver and London.

The IOC apportioned the rights to the cities: $793 mil for Athens, $613 mil for Torino, and $894 mil for Beijing.

In the 2nd package, they apportioned $820 mil for Vancouver and $1.18 billion for London.

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NBC first made a preemptive strike for Athens to Beijing. It offered the IOC a $2.3 billion package for 3 Games. It succeeded and then got greedy: they then made another $2 billion offer only for Vancouver and London.

The IOC apportioned the rights to the cities: $793 mil for Athens, $613 mil for Torino, and $894 mil for Beijing.

In the 2nd package, they apportioned $820 mil for Vancouver and $1.18 billion for London.

As I understand it, for 2010 and 2012, the IOC said that $2 billion was the magic number to win the rights and for a while, it was believed that a network would have to hit that number or they wouldn't win. Hindsight being 20/20, that wasn't the case. NBC put in a $2.001 bid (figuring they'd beat another network if they bid $2 billion even) and it was way too much as the next closest bid was Fox at $1.3 billion. So NBC could have bid $1.4 billion for the 2010/2012 Olympics and won and they'd probably have broken even for Vancouver in spite of a bad economy.

For 2014/2016, unlike in the past, the site of both Olympics are known. The price for Sochi will probably be way down from Vancouver (probably somewhere below $700 million) and Rio probably won't be all that much higher than London. Depending on what the economy does, I'd say $1.8 billion for the 2 Olympics might win it.

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The IOC apportioned the rights to the cities: $793 mil for Athens, $613 mil for Torino, and $894 mil for Beijing.

In the 2nd package, they apportioned $820 mil for Vancouver and $1.18 billion for London.

I suspected it was something like that. That makes the CBC headline simplistic because it assumes the break down of the costs to NBC exactly match the appropriation of the IOC.

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