LAUSANNE, SWITZERLAND – The Beau Rivage in Lausanne will be bustling with sports and TV executives Monday and Tuesday 6-7 June, as intense bidding gets underway to win US broadcast rights for upcoming Olympic Games. Day’s end Tuesday, after a cocktail party where the bidders will socialize while waiting for news, should see the winner named—or just possibly, everyone adjourned to come back another day with another bid.
The stakes are high for all concerned: US rights provide about one-third of all IOC (International Olympic Committee) revenues for the Games and about half of the TV revenues, according to USA Today. The US Olympic Committee, whose senior executives are in Lausanne for the bidding, receives 12.75 percent of the rights, according to Insidethegames.
The Beeb will be watching closely for the impact on world Olympics coverage
And the BBC in London is watching closely because this week’s bids could have a major impact on their ability to continue covering the Olympics, reports the Telegraph in the UK.
The IOC is hearing bids from three networks, ESPN, Fox and NBC, who are vying for the potentially valuable TV broadcast rights to two and possibly four Olympic Games after the 2012 London Games.
“Nothing else in US sports costs so much and has so many variables. Airing the Olympics means selling millions of viewers on largely unknown athletes in sports few Americans watch,” USA Today sums up.
The 2014 Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, Brazil are officially open to offers, with the package offers for the two expected to exceed $2 billion. The IOC has said it will also consider bids for the 2018 and 2022 Games, with the location for these not yet decided. Munich, Germany, Annecy in France and PyeongChang, South Korea are bidding for the 2018 contract.
Estimates in the sports business world are for $4-5 billion if a package of four deal is made.
Richard Carrion, the IOC negotiator, told AP news agency Sunday that “”We obviously expect a higher figure” than NBC’s previous bid.
New factors make this a bigger TV rights gamble
The bids are drawing more than normal attention this year because NBC has reigned supreme in broadcasting the Games since 1992, winning the rights for the past 10 Olympics. Richard “Dick” Ebersol, who as head of NBC Sports, has been in charge of NBC’s coverage and Olympic bids since 1992, surprised the sports world by resigning suddenly in May. Sports Illustrated writes that “NBC’s multi-billion-dollar hold on the most valuable property in sports faces a serious challenge.”
Ebersol’s departure coupled with other changes appear to make it more likely than in the past that one of the other networks will come out with the contract.
NBC has in its favour strong experience, but the network lost $223 million broadcasting the Vancouver Olympics in 2010, after paying $2.2 billion for the rights, well above Fox’s $1.3m bid for those Games. The economic downturn played a role in sabotaging NBC’s earnings, despite Games in the same time zones as the US.
ESPN and Fox are expected to argue, in their sealed bids. that their broader international bases equip them better for the job. And this is where the BBC starts to watch more closely, for ESPN and Murdoch’s Fox would be well placed, if they win, to outbid the BBC.
The British broadcast group paid $100 million for the London Games, a terrific bargain, according to the Telegraph, which compares this to a reported $120 million paid by Australia, with about one-third of the viewing audience the BBC will have and a time zone problem.
It had been part of a 2008 European-wide bid, by public broadcasters under the umbrella of the European Broadcasting Union, that was turned down by the IOC for the 2014 and 2016 Games. The IOC in 2008 said no to the bid, giving the understanding that the amount of the bid was too low. The EBU has since left public broadcasters to go it alone.
The New York Times suggests that NBC’s traditional stance of favouring prime time TV coverage over running live events may have hurt it. Only two events were streamed live in Vancouver.
Live streaming for all games: a major change for viewers, TV networks
This time around, ESPN and Fox are promising to provide live coverage for all events, across all platforms, but NBC reportedly is not.
The IOC, for its part, expects the bids to top NBC’s amount last time around, while the three companies will have in mind NBC’s loss, and the additional cost of covering so many sports live.
If the 2018 and 2020 Games are included, new technology elements are thrown into the mix, including the rapidly growing world of 3-D TV and the role of social media.