Handicapping the bidding Monday and Tuesday (6/6-7) in Switzerland for the US TV rights to the 2014 and 2016 Olympic Games, the Wall Street Journal indicated Friday that the deal is NBCUniversal’s to lose. But that doesn’t mean that ESPN and Fox won’t be aggressive.
According to the WSJ story NBCU has already negotiated surcharges with some cable/satellite distributors if it secures rights to the Games beyond the 2012 London Summer Olympics, which it already has nailed down. That would give NBCU an edge in running financial projections for the ’14 and ’16 events.
The problem, as is well known, is that NBCU lost over $220 million on the 2010 Winter Olympics in Vancouver and is expecting to top that red ink next year in London. New owner Comcast doesn’t want NBCU to do another deal that loses money. Nonetheless, the International Olympic Committee (IOC) is hoping to get a top bid that matches the $2 billion that NBCU paid for the privilege of losing money.
While Sports Business Journal reported last week that CBS and Turner might jump back into the bidding after Dick Ebersol left NBCU, but the WSJ story says they have decided not to make a bid. At a financial conference in New York on Thursday (6/2) CBS Corp. CEO Les Moonves made it clear that he would not be making a trip to Switzerland.
So, what do ESPN/ABC and Fox Sports have to offer against an NBCU renewal? The WSJ says ESPN will be pitching the idea of airing more events live and pushing its appeal to young males. It can also offer coverage in off-years of competitions in Olympic sports to boost interest in the events. Fox, as the #1 network with 18-49 viewers will play up its big money demo.
But in the end it all comes down to money. Last time around NBCU bid $2 billion and Fox bid $1.3 billion. NBCU won.
RBR-TVBR observation: What will the US economy and ad marketplace look like in 2014 and 2016? Nobody at NBCU foresaw a deep recession hitting the 2010 Winter Games and what’s likely to be a still-tepid recovery for the 2012 Summer Games.