NBC holds on to Olympics through 2020 with $4.3-billion bid
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It is rare that the incumbent is the underdog, but that’s what NBC was when it came to holding on to the U.S. television rights for the Olympics.
With rivals Walt Disney Co., owner of ESPN and ABC, and News Corp., parent of Fox, expected to make aggressive bids for future games and the body language of NBC’s new owner, Comcast Corp., indicating a wariness of big-ticket sports events that bleed red ink, the peacock network seemed to be far from a sure thing to remain the home of the Olympic flame.
But when the smoke cleared in Lausanne, Switzerland, it was NBC that walked away with the rights to the Olympics through 2020. The price tag for the four games is $4.38 billion. The breakdown is as follows: The 2014 Winter Games in Sochi, Russia, will cost $775 million. The 2016 Summer Games in Rio de Janeiro will cost $1.2 billion. The 2018 Games will run $863 million, and the 2020 Games will cost $1.4 billion. The locales for the 2018 and 2020 games have not been determined yet.
Comcast Chief Executive Brian Roberts, who traveled to Lausanne with the NBC team for the presentation and bid, said, ‘I absolutely wanted to win for the team.’
Roberts said he expects the deal to be profitable.
‘We said all along we were going to take a disciplined approach where we would have a path to profitability,’ Roberts said during a conference call Tuesday. ‘By having a longer term, we were able to come out and achieve that goal.’
NBC lost $233 million on the 2010 Games, and it could face a similar scenario for the 2012 Summer Games in London.
NBC Sports Group Chairman Mark Lazarus, who took that position just a few weeks ago after the abrupt resignation of Dick Ebersol, who had been the leader of the network’s Olympics efforts for more than a decade, said that starting in 2014, every Olympic event would be live either on television or the Internet.
‘This deal encompasses every platform known today or to become known between now and when this deal comes up,’ Lazarus said.
Many industry observers expected Disney to walk away with the games. However, while NBC and Fox each made bids for both the next two and next four Olympics games, ESPN only bid for the 2014 and 2016 games and its bid was not as competitive, people close to the process said. The ESPN bid was for $1.4 billion, one person with knowledge of the matter said, and its presentation was shorter than pitches from NBC and Fox.
“We made a disciplined bid that would have brought tremendous value to the Olympics and would have been profitable for our company,’ ESPN said in a statement, adding that ‘to go any further would not have made good business sense for us.’
Fox’s bid for the four games was more aggressive. For 2014 and 2016, Fox offered $1.5 billion and for all the games between 2014 and 2020, the network bid $3.4 billion, a person familiar with the matter said. In a statement, Fox Sports Chairman David Hill congratulated Comcast and NBC.
-- Joe Flint