NBCU shells out $4.38 billion to keep Olympics (audio)

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New owner Comcast didn’t back down from spending the bucks necessary to continue the Olympics tradition at the Peacock Network. NBC Universal is paying $4.38 billion for two Winter and two Summer Olympic Games through 2020, fending off bids by Fox Sports and ESPN/ABC.


In announcing that NBC had again won the bidding, International Olympics Committee President Jacques Rogge (pictured) told reporters at the press conference in Switzerland (and many others participating via phone) that the NBCUniversal team has the Olympics “in their DNA.” He noted that NBC has great experience in broadcasting the Olympics. By 2020 NBC will have broadcast 17 Olympics, dating back to 1964.

Rogge:

There had been doubts about just how aggressive NBCU would be about defending its Olympics turf under new owner Comcast. The 2010 Winter Games in Vancouver, Canada lost over $220 million and the 2012 Summer Games in London are expected to top that red ink. Nonetheless, Comcast CEO Brian Roberts personally led the team which went to Switzerland and bid $2.001 billion for the US TV rights to the 2014 Winter Games will in Sochi, Russia and the 2016 Summer Games will in Rio de Janeiro, Brazil, plus $2.381 billion for the 2018 Winter Games and 2020 Summer Games in locations yet to be determined. Roberts did indicate that his company would be pleased to see a US city bid for one of those, but NBCU is confident of the financial viability in any case.

So, how will NBCU make the Olympics once again profitable?

“We’ve been very clear from the beginning that we want to be disciplined and responsible and try to find a way to have profitability, and we think we’ve achieved that,” Roberts said. “This will be a profitable relationship for NBCUniversal by having a decade, or eight more years, four more games, and we’ll have an opportunity to build up a lot of the assets at NBCUniversal. I think it has been a very fair and great process and we are confident that we will build value for our shareholders and have a profitable relationship.”

Roberts and other NBCU executives emphasized that the new Olympics deal is multi-platform, covering not only broadcast and cable TV, but every type of Internet and wireless platform that now exists or is developed in the coming years.

As he claimed victory in his first bidding for the Olympics rights, Roberts sounded like a proud poppa, albeit one who just committed to spending $4.38 billion.

Roberts:

Now it’s up to Mark Lazarus, the new Chairman of NBC Sports Group, to make the math work as he deploys live Olympic broadcasts and lots of replays and highlights across NBC and the various cable networks of NBCU (including those just merged in from Comcast) along with the Internet streams that have been growing in importance at the past couple of Olympics and various mobile platforms. He will need an army to do it, but he will have one to put to use.

“It is a great thrill to know that NBC’s unsurpassed Olympic heritage and unprecedented partnership with the IOC will continue through 2020. The Olympics are a significant part of NBC and the IOC again recognized NBCUniversal’s unmatched ability to promote, market, program and produce the Olympic Games. London, Sochi, Rio and the 2018 and 2020 Games will benefit from our ability to galvanize all the resources of the newly-formed NBC Sports Group to bring the Games to more homes and more platforms than ever,” Lazarus, who was in Switzerland, said in a statement put out by NBC Sports Group.

RBR-TVBR observation: Are two Olympics worth $2 billion plus? At least three big media companies think so. While NBCU lost money on the 2010 Games, that was in an unprecedented recession. So, after losing again in 2012 Comcast and NBCU executives are convinced that they can make money over the course of nearly a decade by holding onto the franchise through 2020. Now they just have to make the numbers work.