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IOC to award US TV rights in June


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#2 - bidding over $2 billion will definitely be a money loser for the sucker network that wins. If I were them, I would only bid $1.9...and let the IOC take it or leave it. But they are such gluttons for punishment...no wonder the IOC always gets want it wants.

Wouldn't say "definitely." If the economy doesn't turn around, then yes, $2 billion is too much. But if the economy does improve (obviously that's a massive if), then it's foreseeable to think a network can profit off a $2 billion. If not for the economy, NBC could have at least broken even on 2010/2012 with a little bit of luck. Obviously that didn't happen. The winning bid price could go down from last time (it's happened before, CBS paid less for 1992 and 1994 than ABC did in 1988 and that had nothing to do with a bad economy). If no network is willing to pony up the money, what can the IOC do. Just because they say they're going to get over $2 billion doesn't mean it's actually going to happen.

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If no network is willing to pony up the money, what can the IOC do. Just because they say they're going to get over $2 billion doesn't mean it's actually going to happen.

That's exactly what I mean. If Moscow and the IOC can play them for fools, then so can they band together to their advantage.

I have a question on the figures reported in the press. Let's just say $250 million for the rights to Bujumbura 1993. But what's not reported is that from this the USOC takes its (what is it presently?) 20% (which I know the IOC wants to whittle down to like 13.25%??). So in reality, based on my hypothetical figure of $250 mil for one Games, really becomes just $200 mil by the time it gets to the IOC. Then if that old 33.4% of theirs still holds, another $67 million is removed from that $200 mil, leaving only $133 mil actually goes to the BOC.

So those ASTRONOMICAL billion-dollar amounts really become more human after the USOC and IOC cuts are taken out. BUt yeah, I know it doesn't make it cheaper for the networks.

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Completely understand that about inflation. It is less important for 2003 than it is for 2010 and 2012. I am not sure when and in what increments NBC pays the IOC, but 2014 and 2016 inflation becomes a consideration, so I guess in my mind it all cancels out in the end.

Surely though if history is any indication, we are going to see at least a 10% increase in rights fees this time around. I am no economist either, but I do work in marketing, and can tell you that things have really recovered where advertising is concerned compared to 2009 and early 2010.

Just for fun, throw some guesses out there for who you think will win, and what the winning rights fees may be.

One thing's for sure, I guarantee Rogge will be doing this...

pg-66-Jacques-Rogge_256719t.jpg

and not that...

jacques_rogge2_1577658c.jpg

or maybe just this for right now...

Jacques+Rogge.jpg

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In an effort to do some rough economic analysis, I took a look at the SBJ article to try and put the numbers in a different context and look at net revenue. Since we know how much the networks paid for each Olympics and have the listing of what their profit/loss was, we can get a pretty good estimate of how much money was generated. Making a list like Soaring, here's what we have...

WINTER

1994 Lillehammer ($300 million rights fee, $40 million profit) - $340 million

1998 Nagano ($375 million, $30 million) - $405 million (+19%)

2002 Salt Lake ($545 million, $75 million) - $620 million (+53%)

2006 Turin ($606 million, $60 million) - $666 million (+7%)

2010 Vancouver ($820 million, lost approx. $200 million) - $620 million (-7%)

SUMMER

1992 Barcelona ($401 million, lost $99 million) - $302 million

1996 Atlanta ($456 million, $20 million profit) - $476 million (+58%)

2000 Sydney ($705 million, $50 million) - $755 million (+59%)

2004 Athens ($793 million, $70 million) - $863 million (+14%)

2008 Beijing ($894 million, $100 million) - $994 million (+15%)

Now what can we take from this data, inexact as some of it may be? Clearly there's no real pattern to the gains from 1 Olympics to the next although some of the bigger jumps can easily be explained. It can also give us something of a window into what to expect for the next Olympics. Looking at the progression, it's not that outlandish that they could have expected to generate $2 billion from Vancouver and London (and remember at the time, it was possible that 2012 could be in the United States.. obviously anyone who follows these things knows that was never going to happen). But it certainly shows just how soft the advertising market must be that Vancouver got much better ratings than Turin and still managed to generate LESS money.

So the IOC is still in their quagmire that they're asking the networks to bet on a future event in the middle of a recession. Based on these numbers (again, everything but the rights fees are unofficial) and given the uncertain nature of the economy, I don't think the IOC will get their $2 billion. I had originally said I though a 2014/2016 package would be worth about $1.7 billion. Being a little more generous, I'll make a predict that the winning bid lands between somewhere between $1.8 billion and $1.9 billion, and that's only if the IOC is smart enough to play these networks against each other. It's very possible they all low-ball their offers and the IOC gets really screwed (and in which case, NBC probably wins by default)

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SUMMER

1992 Barcelona ($401 million, lost $99 million) - $302 million

1996 Atlanta ($456 million, $20 million profit) - $476 million (+58%)[/color][/font]

NBC lost nearly $100 mil for Barcelona? And made only $20 mil for Atlanta?

God, the number-crunchers at NBC are amateurs. Wonder what the sacking rate there was.

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NBC lost nearly $100 mil for Barcelona? And made only $20 mil for Atlanta?

God, the number-crunchers at NBC are amateurs. Wonder what the sacking rate there was.

"Only" $20 million? That's more than a 4% return on their investment, most people would consider that somewhat successful. And they did much better on future Olympics. If you know your history, you'll recall how NBC claimed they lost money on Seoul, then came in with the winning bid for Barcelona (the IOC thought they'd get $500 million, obviously they fell way short of that.. gee, I wonder what that whole scenario sounds so oddly familiar). The mistake they made on Atlanta was getting scared away from doing any cable coverage after the Triplecast fiasco (they thought they'd make most of their money back from that, obviously we know how that turned out).

Yes, the folks that run NBC are idiots, but the least of that is because of the Olympics which has generated more profits than losses over the past 20+ years, and that includes the hit they took on Vancouver.

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"Only" $20 million? That's more than a 4% return on their investment, most people would consider that somewhat successful. And they did much better on future Olympics. If you know your history, you'll recall how NBC claimed they lost money on Seoul, then came in with the winning bid for Barcelona (the IOC thought they'd get $500 million, obviously they fell way short of that.. gee, I wonder what that whole scenario sounds so oddly familiar). The mistake they made on Atlanta was getting scared away from doing any cable coverage after the Triplecast fiasco (they thought they'd make most of their money back from that, obviously we know how that turned out).

Yes, the folks that run NBC are idiots, but the least of that is because of the Olympics which has generated more profits than losses over the past 20+ years, and that includes the hit they took on Vancouver.

I really treasured the 1992 Triplecast pin. It was a nice one. :D

My incredulity at the Atlanta figures is that: the $456 mil purchase price was considered a low one. Billy Payne had been advised by his consultants that something like $515-$520 mil was a fair price for 1996. So...considering NBC got it for a low-balled price ; it was a domestic-set Games, (Atlanta, not only a particularly expensive COLA area BUT Coca-Cola's hometown as well); and ACOG had lined up a whole new set of enthusiastic, heavy-hitter sponsors (Delta, Home Depot and NationsBank), thus I am really surprised at how low that profit margin was.

BTW, Q, would you happen to have the % share of US viewership for Nagano's Opening Ceremony?

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My incredulity at the Atlanta figures is that: the $456 mil purchase price was considered a low one. Billy Payne had been advised by his consultants that something like $515-$520 mil was a fair price for 1996. So...considering NBC got it for a low-balled price + it was a domestic-set Games, (and Atlanta, not a particularly expensive COLA area), thus I am really surprised at how low that profit margin was.

To very specifically address Billy Payne..

OLYMPICS; NBC Wins TV Rights to 1996 Atlanta Games

NBC's victory in the Atlanta sweepstakes caps a yearlong campaign of posturing and spin-doctoring. While the networks poor-mouthed, saying the economy was forcing them to be stingy, Atlanta organizers boasted that the TV rights were worth at least $500 million.

"Would we do that?" said a grinning Billy Payne, the president of organizing committee. "Yeah, we were spinning a little."

I guess someone should tell the IOC (who will try and convince you 2014/2016 is worth $2 billion) that propaganda doesn't work as well as they'd like. Again, this is where it helps to look at the revenues. NBC generated $302 million on Barcelona and then $476 on Atlanta. That's not a small increase. There was serious competition for the Atlanta bid (ABC topped out at $450 million, CBS went as high as $415 million), but the bids occurred after the fallout from Barcelona and I think it may have been over-sold just how big these Olympics were, especially coming just 12 years after L.A. I'm not old enough to remember those really well and it certainly wasn't for a lack of big ratings from Atlanta, but I don't think it was quite the 'event of the decade' as NBC tried to push on us for Beijing. In short.. yes, the price was low, but in retrospect, it looks like it was right on the money.

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BTW, Q, would you happen to have the % share of US viewership for Nagano's Opening Ceremony?

17.1 rating, 29 share

See the comments section, someone posted the rating/share for every Winter Olympics Opening Ceremony...

http://tvbythenumbers.zap2it.com/2010/02/13/tv-ratings-vancounver-olympics-opening-ceremonies-average-34-5-million-viewers/41924/comment-page-2

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17.1 rating, 29 share

See the comments section, someone posted the rating/share for every Winter Olympics Opening Ceremony...

http://tvbythenumbers.zap2it.com/2010/02/13/tv-ratings-vancounver-olympics-opening-ceremonies-average-34-5-million-viewers/41924/comment-page-2

Thanks, Quake. Great that is has all the OCs since Squaw.

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No, it will be 5.1 billion... :D

It would be $5.001 billion. Remember they bid $2.001 billion for 2010 and 2012 thinking someone would bid $2 billion. Why waste an extra $99 million if they don't need to!

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IOC owes NBC a break in TV rights bidding for billions of reasons

Article from the Chicago Tribune talking about the bidding and suggesting (although not necessarily predicting) that the IOC should give NBC a break for the over-bid on 2010 and 2012. Although the writer does admit he has ties to NBC, so he acknowledges it may not be the most unbiased reporting. Not necessarily any new information here although it does continue to offer some insight into the bidding process.

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IOC owes NBC a break in TV rights bidding for billions of reasons

Article from the Chicago Tribune talking about the bidding and suggesting (although not necessarily predicting) that the IOC should give NBC a break for the over-bid on 2010 and 2012. Although the writer does admit he has ties to NBC, so he acknowledges it may not be the most unbiased reporting. Not necessarily any new information here although it does continue to offer some insight into the bidding process.

Well...

1. If I am NOT mistaken, it was NBC that approached the IOC to sell them another package like the previous one of Athens-Torino-Beijing. (Or was it other one?)

2. ABC didn't get any breaks (other than refunds to their sponsors in the over-estimation of figures for Calgary).

So why should the IOC cut NBC any breaks?

I say $5 billion is the winning bid!! As Dick Pound didn't say: hey, what's a few billion between friends?? :lol:

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I think ABC should pay $5 billion, there's nothing on ABC TV anyway, and doesn't Steve Jobs own Disney now? Apple has all kinds of billions, they should just buy the IOC.

Steve Jobs is on the board of Disney due to his connection with Pixar, but he certainly doesn't own the place. And the folks at Dancing With The Stars and Desperate Housewives, 2 shows I probably wouldn't watch if you paid me, would likely beg to differ that there's nothing on ABC TV.

Well...

1. If I am NOT mistaken, it was NBC that approached the IOC to sell them another package like the previous one of Athens-Torino-Beijing. (Or was it other one?)

2. ABC didn't get any breaks (other than refunds to their sponsors in the over-estimation of figures for Calgary).

So why should the IOC cut NBC any breaks?

I say $5 billion is the winning bid!! As Dick Pound didn't say: hey, what's a few billion between friends?? :lol:

They didn't make another pre-emptive bid like they did for 2000-2002 and then again for 2004-2006-2008. I don't think the IOC would let them since they wanted an open bidding process and we see how well that worked out for them. And no, ABC didn't get any breaks, but they didn't have the history with the IOC that NBC does now. The IOC certainly isn't going to give NBC a discount, but their relationship with the IOC could put them in a more favorable position than they otherwise could.

As for $5 billion.. even if it's a bid on 4 Olympics, you'd be asking a network to average $1.25 billion per Olympics, including 2 Winter Olympics, when London's price was only $1.181 billion. Not going to happen, NBC and Comcast are not that ambitious (or stupid).

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1. As for $5 billion.. even if it's a bid on 4 Olympics, you'd be asking a network to average $1.25 billion per Olympics, including 2 Winter Olympics, when London's price was only $1.181 billion.

2. Not going to happen, NBC and Comcast are not that ambitious (or stupid).

1. Jeez, Louise...u thot I was serious?? :rolleyes:

2. I should hope not.

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To get this topic back on track...

http://www.mediabistro.com/sportsnewser/espn-might-supplement-olympic-bid-with-offer-of-disney-marketing_b9095

Looks like an ESPN/Olympics deal could put Disney in the TOP Program, although they're unlikely to offer the money GE did for the last Olympic cycle. Could certainly bolster their bid though.

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Dick Ebersol is resigning from NBC Sports. He says he could not come to an agreement on a new contract. He will not be attending the Olympic broadcaster negotiations in June.

Wow, I'm stunned right now, not just for the implications on the Olympics, but everything else within Comcast and the NBC Sports group. Unbelievable

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