NBC’s Steve Burke expects Olympics in Rio to be the ‘most profitable’ ever
The Olympic Games in Rio are 25 days away but NBCUniversal Chief Executive Steve Burke believes his company has already won the gold in ad sales.
After a press preview on Monday of NBC’s Olympics coverage, Burke told the Los Angeles Times that the company has hit its sales target for the Rio Games, which he said will end up being be “the most profitable Olympics in history.”
According to Seth Winter, executive vice president for ad sales for the NBC Sports Group, the ad revenue total for Rio is approaching $1.2 billion, with orders still being taken.
“We have never hit our budget in sales three weeks before the Olympics begin,” Burke said.
When asked how profitable he expects the Games to be, he said: “You’ll find out when we release our earnings, but we’re way ahead of where we were in London, and London was profitable. Sochi was profitable” in 2014.
NBC said the 2012 Summer Games in London brought $1 billion in sales.
The Games will air on NBC and across its parent company’s cable properties and Spanish-language network Telemundo for 17 days starting Aug. 5.
Winter said the Games in Rio are guaranteed to deliver advertisers a household rating in the “high teens.” Presumably that’s around the 17.5 household rating that the Summer Games delivered in 2012. A household rating point represents 1% of the nation’s TV households, currently equal to 1.164 million homes, according to Nielsen.
The guarantees are based on “live plus same day” viewing and do not include DVR playback or streaming. While NBC is selling advertising for its digital coverage, a majority of the sales are for commercials on prime-time telecasts over the broadcast network, Burke said.
NBC expects its prime-time rating for the Olympics to be higher than 2012 as all of the events will be live as opposed to tape delayed. But it’s the overall fragmentation of the television landscape due to the vast number of choices viewers have today that is making the Olympics more attractive to advertisers, Burke said.
NBC paid $4.32 billion to the International Olympic Committee in 2011 for the rights to four sets of Games — outbidding its nearest rival by almost $1 billion — and another $7.75 billion to extend the deal through 2032.
Burke believes that investment is paying off as programming that reaches the kind of massive audiences that the Olympics deliver becomes more scarce. NBC was able to command steep double digit increases over its 2012 rates.
“If you think between today and when London took place — television audiences are down 30%,” Burke said. “There is a good chance that Rio ratings will be around the same as London, maybe higher. For an advertiser that wants to change perceptions over a 17-day period, there is only one of these, so it becomes increasingly valuable.”
Burke and other NBCUniversal executives said there are no concerns about venues not being ready in time for the start of the Games. Only a handful of employees have declined to travel to Rio out of concerns over the Zika virus.
“We are having an experience in Rio that is probably as good as we’ll ever have,” said NBC Olympics President Gary Zenkel.
Twitter: @stevebattaglio
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