(ATR) With U.S. broadcast rights for the 2014 and 2016 Olympics finally headed for the auction block, NBC’s long reign under the rings faces an uncertain future.
The first and largest question ahead for NBC is whether new majority owner Comcast is willing to spend the $2 billion-plus the IOC says it wants in order to secure the rights to Sochi and Rio.
Soon after Comcast took control of NBC in January – holding 51 percent of the company while GE, the previous owner, now has a 49-percent stake – new NBC Universal CEO Steve Burke said he wasn’t sure the network would enter the bidding for the Games.
"We are here to make money," Burke said in a conference call with analysts when asked about whether NBC would chase the 2014 and 2016 Olympics. Burke, former Comcast COO, took over at NBC last year as the acquisition took shape.
However, industry insiders tell Around the Rings they believe NBC/Comcast wants to retain the Olympics, with one saying the Peacock Network is "the most likely carrier. NBC is the frontrunner and has the most invested in the Olympic relationship."
What Will it Cost?
The price tag, though, remains the sticking point.
NBC paid a record $2.2 billion to air the 2010 and 2012 Olympics. IOC President Jacques Rogge has said he expects the figure will go up in the forthcoming round, which by all indications should begin soon.
Richard Carrion, the IOC’s lead negotiator in the U.S., says the rights will be decided before the IOC Session in July.
The IOC postponed negotiations to wait until the economy improved, but in the meantime NBC lost a staggering $220 million in Vancouver and has already forked over $1.18 billion for the London rights fees before putting a single camera in place. Production costs are estimated at $170 million.
"It doesn’t take a math major to surmise that there’s going to be another multiple hundred million dollar loss in London," an insider says.
All interested networks will have to crunch the numbers to determine the value of future Olympics.
In 2011, all four major networks – NBC Universal, ABC/ESPN, CBS and Fox –expressed interest in bidding for the 2014 and 2016 Games.
Sean McManus, CBS Sports chairman, tells Around the Rings that his network has not been notified of any bidding process and is "not right now actively pursuing the Olympic rights."
"I think we would take a look at it," he says. "We obviously would bid only if it made sense, not just from a sports standpoint, but from a network standpoint for all of CBS."
Industry insiders say it is not unusual in TV negotiations for the networks to try to downplay their level of interest and for the IOC to pump up expectations.
But it has been unnaturally quiet, with few public pronouncements, save for Burke’s.
His unsentimental view about NBC’s continous Olympic coverage since 1988 (except for the 1992-98 Winter Olympics) is the strongest signal so far about the network’s intentions – ambivalent though it is.
Partially due to an abundance of caution over dealing with a new corporate parent, no other NBC executives will comment on the Olympic rights, an official with the network tells Around the Rings.
The Ebersol Factor
In the Comcast/NBC Universal merger, NBC’s Dick Ebersol rose to the top as chairman of the NBC Sports Group, which consists of NBC Sports, Golf Channel, VERSUS, 11 Comcast SportNets (regional sports networks) and their digital platforms.
Insiders say Comcast viewed Ebersol as one of NBC’s strongest assets, and, as everyone knows, Ebersol’s passion is the Olympics. "No one understands the Olympic dynamic as much as Dick," says an insider. "If he wanted to retire, he would have done it without taking on the new Comcast responsibilities."
Whether Comcast was counting on Ebersol only to steward the 2012 London Games, or if it wants him to oversee future Olympics, remains to be seen.
London Plans
Aside from announcing the leadership team for the NBC Sports Group, the entity has been mum about its plans for the 2012 Olympics as far as platforms and branding. VERSUS, the Comcast cable channel which has broadcast Olympic-type events, is expected to play a major role in future coverage, but it is not known if that will come at a cost to Universal Sports.
Insiders say 16 months is plenty of time to address the platforms.
As for content, expect a "Dick Ebersol signature production with the very high standards he always brings," an insider says.
Coming on March 10: The bidding process for 2014 and 2016, advantage NBC?
Written and reported by Karen Rosen.
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